On Thursday, the Association for Accessible Medicines, the leading U.S. generic drug industry group, announced its legal action seeking to prevent Illinois from enforcing a recently enacted state law that limits price increases for specific generic drugs. The lawsuit, filed in federal court in Chicago on Monday, argues that the law, which became effective this month, unlawfully regulates sales outside of Illinois by applying to drugs destined for the state, thus violating the Commerce Clause of the U.S. Constitution.
The Association for Accessible Medicines is pursuing an injunction to prohibit Illinois Attorney General Kwame Raoul from enforcing the law. Raoul’s office has not yet responded to requests for comment.
Generic drugs make up 91% of pharmaceuticals sold in the United States and account for 18% of the country’s total drug spending, according to AAM. Unlike branded drugs, generic versions lack patent protection, allowing multiple manufacturers to produce them through a streamlined FDA approval process.
Although generic drug prices typically decrease significantly after patent expiration, recent years have seen some generic drugs experiencing price hikes, leading to allegations of price fixing by several states.
Illinois’ law focuses on restricting price increases for essential generic drugs sold to wholesalers. It prohibits hikes of 30% or more within a year, 50% or more over three years, or 75% or more over five years, unless justified by increased costs. The covered drugs include those listed on the World Health Organization’s essential medicines list, such as morphine, amoxicillin, diazepam, and others designated by Illinois. The legislation applies to both generic drugs and biosimilar drugs, a newer class of off-patent drugs with streamlined FDA approval.
The Association for Accessible Medicines argues that most of its members, including Amneal Pharmaceuticals, Teva Pharmaceuticals, and Sandoz, operate outside of Illinois and sell their drugs to wholesale distributors beyond the state. This implies that the law could potentially regulate sales occurring entirely outside Illinois, depending on the drug’s destination.
The industry group notes that some members plan to increase prices for essential drugs this year beyond what the law permits. It does not, however, provide specific examples. A similar law in Minnesota faced a legal setback in December when a federal judge blocked its enforcement.