Association For Accessible Medicines v. Frosh

887 F.3d 664 (4th Cir. 2018)

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Nature of the Case

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Facts

Maryland's legislature passed 'An Act concerning Public Health - Essential Off-Patent or Generic Drugs - Price Gouging - Prohibition.' The Act prohibits 'a manufacturer or wholesale distributor' from 'engaging in price gouging in the sale of an essential off-patent or generic drug.' The Act defines 'price gouging' as 'an unconscionable increase in the price of a prescription drug.' An 'unconscionable increase' is further defined as an increase that 'is excessive and not justified by the cost of producing the drug or the cost of appropriate expansion of access to the drug to promote public health' and 'results in consumers . . . having no meaningful choice about whether to purchase the drug at an excessive price' due to the drug's 'importance . . . to their health' and 'insufficient competition in the market.' A manufacturer or wholesale distributor in violation of the Act may face a number of legal consequences, including a civil penalty of $10,000 per violation or an action to enjoin the sale of the medication at the increased price. P is a voluntary organization of prescription drug manufacturers and wholesale distributors in the pharmaceutical industry. P's member-manufacturers sell their products to wholesale pharmaceutical distributors, none of which are based in Maryland. The vast majority of these sales occur outside Maryland's borders. P filed this action claiming that the Act violates the dormant commerce clause and is unconstitutionally vague. D filed a motion to dismiss which the district court granted as to the dormant commerce clause claim but denied as to the vagueness claim. P appealed.