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Belmont Health Law Journal

Abstract

This note acknowledges that the high cost of drugs, both generic and patented, is an important issue for patients and policy makers alike. This note focuses solely on generic drugs, as the rights of drug patent holders are protected by the Copyright Clause of the United States Constitution, which this note does not seek to address. Additionally, although the cost of drugs can be heavily impacted by Congress and federal regulatory agencies such as the Department of Health and Human Services and the Food and Drug Administration, this note will only look at the measures being taken by legislatures at the state level.

Part I of this note will explain how generic drugs are brought to market, how manufacturers were able to charge so much for these generic or off-patent drugs without challenges from competitors, as well as what the consequences of price spikes are for patients, hospitals and insurers. Part I will also delve into the history of price gouging laws and examine the results from past economic regulations. Part II of this note will analyze the benefits and drawbacks of the relevant state laws and legislation regulating generic drug price increases. Part III of this note argues that state laws that cap prices on generic drugs should not be enacted, as they may result in shortages of necessary drugs; however, laws requiring greater transparency for drug price increases should be enacted to allow patients and providers the opportunity to find alternatives and to signal competitors that there may be an opportunity to enter the market.

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