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The U.S. Supreme Court rejected Maryland’s bid to revive a law aimed at preventing price gouging by pharmaceutical companies, dealing a setback to the power of states to rein in prescription drug costs.

Last year, Maryland became the first state in the country to give its attorney general the power to take legal action against drug companies that dramatically increase the price of off-patent or generic drugs.

The complicated law applied to generic or off-patent drug makers that manufacture a medicine at least three other firms also make. If those conditions applied, companies could not impose a significant price increase without justifying it to the attorney general, who could ask a judge to order that the price increase not take effect. Violating the law carried a $10,000 fine.

The Association for Accessible Medicines, a trade group representing generic drug manufacturers such as Teva Pharmaceutical Industries Ltd and Mylan NV, sued its Attorney General Brian E. Frosh and Dennis R. Schrader, who was the state’s acting health secretary, to block the measure.

The case worked it way to the U.S. Court of Appeals for the Fourth Circuit, which said in a 2-to-1 ruling that the 2017 law is unconstitutional because it violates the commerce clause of the U.S. Constitution.

“Although we sympathize with the consumers affected by the prescription drug manufacturers’ conduct and with Maryland’s efforts to curtail prescription drug price gouging, we are constrained to apply the dormant commerce clause to the Act,” Judge Stephanie D. Thacker wrote for the majority opinion. “We hold that the Act is unconstitutional under the dormant commerce clause because it directly regulates transactions that take place outside Maryland.”

Maryland argued that the 4th Circuit’s decision not only prevents Maryland and other states from reining in abusive prescription-drug prices that harm consumers and public health but that the ruling could call into question other state regulatory efforts. At issue was whether the measure violated Supreme Court precedents that constrain states from enacting laws that burden out-of-state competitors.

The U.S. Supreme Court just declined to take up Maryland’s appeal of the 2018 federal appeals court ruling, without comment, letting a lower court ruling against the law stand.

So far, California as had better results with S.B. 17. The California law requires all drug price hikes over 16% over a two-year span to be subject to transparency requirements, which would discourage double-digit price increases and better negotiations between drug companies and purchasers.

Last August, the U.S. District Court, Eastern District of California dismissed a lawsuit brought by the Pharmaceutical Research and Manufacturers of America (PhRMA) to halt S.B. 17.

PhRMA filed this lawsuit alleging the law as unconstitutional and seeking a permanent injunction preventing its implementation. The U.S. District Court dismissed the suit as PhRMA did not produce enough facts to substantiate their claims or standing.