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WASHINGTON – This week the Association for Accessible Medicines (AAM), the trade association representing America’s manufacturers of generic and biosimilar medicines, filed a lawsuit against Illinois Attorney General Kwame Raoul, requesting that a Federal district court in Illinois enjoin the Attorney General from enforcing the price-control provisions of House Bill 3957.
The Illinois law, an unconstitutional overreach signed into law in July 2023 and taking effect this month, grants Illinois sweeping powers to regulate the national pharmaceutical market, violating the United States Constitution and posing harm to vulnerable patient communities. The suit was filed in the United States District Court for the Northern District of Illinois.
The Illinois law claims the goal of lowering drug costs, but it conspicuously does not apply to patented drugs sold by brand-name pharmaceutical companies — which account for three-quarters of total prescription drug spending. Targeting generic drugs makes no sense because generic drugs are responsible for reducing prescription drug costs. If the legislation were to be enforced, it would most likely lead to fewer generic alternatives and less competition.
Generic drug manufacturers already face significant competitive and regulatory hurdles to bringing their life-saving and cost-reducing medicines to patients. The Illinois law’s penalties will only add to those burdens, potentially forcing generics out of the market, harming Illinois patients, and benefiting no one—except potentially brand-name pharmaceutical companies.
AAM has successfully sued multiple other states that have adopted similar laws, and in each case, federal courts have blocked the unconstitutional state laws from taking effect. Most recently, in December of last year, the Federal district court in Minnesota granted AAM’s request to preliminarily enjoin a substantially similar price-control law enacted by Minnesota.
How HB 3957 Is Illegal:
HB 3957 IS UNCONSTITUTIONAL
Violates the Commerce Clause of the Constitution: The overreaching law claims that Illinois has the power to regulate interstate commerce, including businesses and transactions entirely outside the state of Illinois. Under our Constitution, Attorney General Raoul does not have the right to control how businesses operate in other states.
Violates the Constitution’s Due Process Protections: The new law would allow the Attorney General to sue over transactions with no connection to Illinois at all. Illinois is one of 50 states, and it cannot threaten to enforce price regulations for the entire country. The Illinois law is also vague. It provides generic manufacturers no guidance to allow them to determine in advance whether they will be exposed to the law’s crippling financial liability.
Generic drugs are a true success story. Generic medicines account for 90% of all prescriptions, but they only account for 17.5% of drug spending. Year over year, generic drug prices fall, while brand name drug prices rise. The overall price of generics fell by more than 5% in each of the last several years. In contrast, a recent study by the federal government found, “Drug spending is heavily driven by a relatively small number of high-cost products.” Spending on brand-name drugs has continued to rise –and so has the cost per brand-name prescription.
Generics saved Illinois $15.3 billion, including state programs and your tax dollars, in 2022 alone.
AAM is committed to working with patients, healthcare professionals, advocacy groups, stakeholders, and policymakers to develop smart, balanced policies that expand access to lifesaving medicines. We cannot allow misguided or bad policy to hinder the progress we are making on behalf of our nation’s patients. More competition from generics is proven to lower costs and increase access for all Americans. It’s time to stop the price controls in HB 3957 and work together to pass a law that will help patients today and into the future.
