Generic drugmakers seek to thwart a Connecticut law that would cap rising prices

STAT News – Monday, October 27, 2025
By Ed Silverman

A trade group representing generic drugmakers is seeking an injunction to thwart a provision of a new Connecticut law that places a price cap on lower-cost copycat medicines, arguing the effort is “unconstitutional overreach.”

The law, which goes into effect in January, prohibits drugmakers from raising the prices of their medicines above the inflation rate. However, medicines sold by brand-name manufacturers are exempt until two years after those products lose patent protection, which means the focus is squarely on generic companies.

“We’ve seen drug prices, in general, as one of the very fastest-growing elements of state spending,” said Matt Lessler (D), the state Senate co-chair of the human services committee, who co-sponsored the legislation. “It seems clear that drug prices are growing across the board and putting pressure on the economy and health care affordability.”

“The generics go off patent but we’re still seeing costs going up, not going down. So it’s an effort to try to move the needle the other way,” he added. The exemption for brand-name drugmakers was granted because Connecticut Gov. Ned Lamont (D) was concerned about the impact on research and development, Lessler explained.

The Association for Affordable Medicines, however, sees it differently. Earlier this month, the trade group filed a lawsuit arguing that the law attempts to regulate businesses and transactions entirely outside the state and assert control over interstate commerce, a role reserved for Congress.

The trade group also maintained the law violates due process protections. How so? The law exposes generic drug companies to significant liability without creating clear standards and purportedly fails to provide fair notice of which business practices would trigger an enforcement action.

The law “targets generic and biosimilar drug manufacturers, the very companies that drive affordability. If enforced, the law would most likely reduce generic competition and limit generic alternatives. Since generic drugs reduce prescription drug costs, the law’s effect undermines its stated purpose,” the AAM said in a statement after seeking the injunction.

Earlier this month, the Healthcare Distribution Alliance, a trade group representing prescription drug wholesalers, filed its own lawsuit and made several of the same arguments. The law unconstitutionally imposes “draconian penalties” on wholesale distributors if generic drug products are sold in Connecticut above the price at which the wholesaler purchased the drug from the manufacturer, the suit stated.

The Connecticut law actually contains various initiatives to address the rising cost of prescription drugs, including negotiating bulk prices resulting in lower costs, exploring the idea of the state making its own GLP-1 drugs for weight loss, and seeking federal approval to import prescription drugs from Canada.

Connecticut is one of numerous states attempting to push back on rising prescription drug costs and pursuing various measures in hopes of balancing their budgets. Although Washington has taken various steps to address the issue, several states argue those efforts have not sufficiently solved the problem.

State lawmakers and officials, for instance, have praised the Inflation Reduction Act, the federal law that allows Medicare to negotiate drug prices. But they believe it does not go far enough, since only a few drugs are affected. And recent proposals by the Trump administration, such as one to create a government website for consumer purchases, remain nascent and lack many details.

And so several states have been stepping into the breach. Some have created affordability boards in hopes of placing limits on spending. Colorado, for instance, generated widespread interest after it recently placed a payment ceiling on an Amgen drug. Connecticut, however, was the first state to place an inflationary cap, according to Lessler.

Whether the trade group will succeed in preventing Connecticut officials from proceeding remains to be seen, of course. But in its statement, the trade group noted that it had successfully challenged similar laws in other states and pointed to a decision last June in which a U.S. appeals court upheld a preliminary injunction against a Minnesota law.

That law, which was enacted in 2020, resembles other so-called transparency laws that were pursued in some other states over the past decade. The law seeks to identify the factors driving prescription drug costs higher and correlate these to certain expenses, revenue, and profits reported by pharmaceutical manufacturers.

A total of 21 states have passed transparency laws in hopes of creating accountability around pricing and developing policy solutions. These laws vary in design, but a recent analysis published in The Milbank Quarterly found that “these laws may have contributed toward informing policymaking based on newly available public information but do not appear to have affected drug prices.”

The trade group, though, argued it violated the constitution and branded it a form of price control. “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-control regime,” AAM said in its statement.

Access this article at its original source.