A new law to combat the rising cost of generic drugs is now in effect across Connecticut. But the legislation, which is being challenged by a national organization representing drug distribution companies, faces an uncertain future.
State Sen. Matt Lesser (D-Middletown) said the goal of the new policy is to send a signal to the generic drug market.
“Which is to lower prices,” Lesser said. “And if generic manufacturers are instead raising prices beyond inflation, we're going to levy a penalty.”
Rising prescription costs are a nationwide trend, according to KFF. And in Connecticut, state data from 2022 to 2023 show medications from retail pharmacies accounted for its highest health care spending increase.
The state’s new law, which took effect Jan. 1, allows Connecticut to fine drug manufacturers who raise the cost of generic medication past the annual rate of inflation. (The policy doesn’t apply if the price of a drug goes up due to supply constraints.) The bill was one of several policies the state legislature passed last session to tackle drug affordability.
But the policy is now being challenged in federal court. The Healthcare Distribution Alliance (HDA) filed a complaint on behalf of its members in Connecticut, demanding the courts not allow the policy to go forward.
After the lower courts didn't stop the law from taking effect before 2026, HDA appealed for an expedited review by the appellate court. The case is still under review.
In a statement, HDA said its members are concerned that Connecticut’s law could threaten distributors’ role in the drug supply chain.
“This law would encourage a patchwork of inconsistent pricing regimes nationwide and impose an excessive burden on interstate commerce,” a spokesperson said in an email Monday. They said the law “violates due process by imposing massive financial penalties on pharmaceutical distributors for third-party conduct that is beyond their control.”
Lesser acknowledged the law is a bit of an experiment, and while it may not lower the cost of generic drugs, he’s optimistic it will stop the costs from going up.
“Hopefully it will work. It may not work,” Lesser said. “But it's an example of some of the things we're going to be trying to see what we can do to bend the cost curve and make the state a little bit more affordable for the residents.”
