States around the country are clamping down on pharmaceutical companies, forcing them to disclose and justify price increases, but the drug manufacturers are fighting back, challenging the state laws as a violation of their constitutional rights. Even more states are, for the first time, trying to regulate middlemen who play a crucial role by managing drug benefits for employers and insurers, while taking payments from drug companies in return for giving preferential treatment to their drugs. Twenty-four states have passed 37 bills this year to curb rising prescription drug costs. Maryland tried a particularly bold approach. After reports of huge increases in the prices of certain generic drugs, Maryland banned price gouging," defined as an unconscionable increase in the price of any "essential off-patent or generic drug." A drug company that flouts the law could be fined $10,000 and be required to pay refunds to consumers. [A] lobby for generic drug companies ... filed suit to block the law, and the United States Court of Appeals for the Fourth Circuit, in Richmond, Va., struck down the law, saying it interfered with interstate commerce in violation of the Constitution. In a lengthy dissent, Judge James A. Wynn Jr. said that Maryland should be able to protect the health and welfare of its citizens. The court, he said, was accepting the drug companies' view that they were "constitutionally entitled to impose conscience-shocking price increases" on consumers.
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