Association for Accessible Medicines v. Frosh

887 F.3d 664 (2018)

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Association for Accessible Medicines v. Frosh

United States Court of Appeals for the Fourth Circuit
887 F.3d 664 (2018)

  • Written by Liz Nakamura, JD

Facts

Maryland (defendant) statute HB 631 prevented generic prescription-drug manufacturers and distributors from engaging in price gouging. HB 631 specifically banned unconscionable price increases, defined as price increases shockingly disproportionate to the cost of producing or distributing the drug. The Association for Accessible Medicines (AAM) (plaintiff) was an organization for drug manufacturers and pharmaceutical wholesale distributors. Only one AAM manufacturer was based in Maryland; none of the AAM wholesale distributors were based in Maryland. Most generic prescription-drug sales involving AAM members occurred entirely outside of Maryland. AAM sued Maryland, arguing that HB 631 violated the extraterritoriality principle of the Dormant Commerce Clause because it functionally regulated the price of generic prescription drugs manufactured and distributed outside of Maryland. The district court upheld HB 631, holding that HB 631’s price-regulating terms were only triggered if a generic prescription drug was made available for sale in Maryland. AAM appealed, arguing HB 631 was not limited to drug sales that occurred in Maryland and, therefore, Maryland was impermissibly regulating extraterritorial commercial conduct.

Rule of Law

Issue

Holding and Reasoning (Thacker, J.)

Dissent (Wynn, J.)

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