BALTIMORE _ A federal appeals court ruled Friday that a Maryland law passed last year to stop drug companies from sharply increasing the price of generic medicines is unconstitutional.
A split three-judge panel of the 4th Circuit Court of Appeals found that the law regulates trade that happens beyond Maryland's borders, which is prohibited by the so-called dormant commerce clause. Judge Stephanie D. Thacker wrote an opinion ordering a lower-level federal judge to bar the law from going into effect.
The ruling is a blow for Maryland Attorney General Brian Frosh, who championed the measure and helped get it through the General Assembly in 2017. The law was the first of its kind in the nation.
The Association for Accessible Medicines, a drug industry trade group, sued the state over the law. Chip Davis Jr., the group's president, said the ruling would be good for patients.
"As AAM has always maintained, this law, and any others modeled from it, would harm patients because the law would reduce generic drug competition and choice, thus resulting in an overall increase in drug costs due to increased reliance upon more-costly branded medications," Davis said in a statement.
Frosh's office could not immediately be reached for comment.
The law required health officials share with the attorney general's office price information about generic drugs _ that is, those not subject to a patent. If the state's lawyers could show that prices were being raised too steeply, they could step in and seek to order prices down or have fines issued.
Judge James A. Wynn dissented from the majority opinion. He wrote that the ruling would stop "Maryland from protecting its citizens against unconscionable pricing practices by out-of-state generic drug manufacturers."
