Michigan joins wave of states trying to limit drugmakers' ability to raise prices

Saying they are tired of waiting for Congress to act, state legislators are pushing Michigan to join a wave of other states that are putting pricing restraints on drugmakers.

Legislators there have introduced a bill that, among other provisions, would require drug manufacturers to justify price hikes of more than 10% in one year or 30% over five years and allow for penalties of up to $100,000 a day for companies that refuse.

Claiming no one else is taking steps to help residents who have to choose between paying their bills or buying their meds, legislators say they decided to act themselves.

"We aren’t waiting for someone else to take the lead on protecting the people of our state—we’re on the front lines, doing it ourselves," state Rep. Tom Cochran said in a statement.   

They pointed out that other states have also taken steps. Maryland, in fact, this spring passed a law that would allow the attorney general to take steps if a generic drug’s price spikes by 50% in one year or if its price increases while there are three or fewer companies making the med.

While Big Pharma has been able to defeat similar efforts in some other states, the industry is now faced with fighting a legal battle to try to stop the Maryland legislation. The generic industry’s lobby group last month filed a suit (PDF) seeking an injunction against the bill, saying it would interfere with interstate commerce.

The moves in Maryland and Michigan mirror efforts in other states. In New York Gov. Andrew Cuomo wants to create a board to control drug costs by determining a "fair price," another effort that has drawn heavy resistance from pharma.

A state senator recently introduced a measure to control prices on certain drugs, eliciting an industry effort to lobby against it. In Ohio, proponents of a drug pricing measure have recently filed a complaint about the use of so-called dark money, or confidential contributions, to finance efforts to defeat their proposal.