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Gougers can likely look to Martin Shkreli for ruining the game of price gouging customers by going nuts and hiking the price of a desperately needed pill some 5,555 percent. The Internet won't soon forget Shkreli's uncontrollable need to display his contempt for formal hearings, which put him in the running for the "most hated person on the Internet" contest.
Well, several states have reacted to that whole scandal and have proposed laws to counter future Shkrelis. But none have gotten as far as Vermont, which is just on the cusp of passing such a law. It looks like a very lucrative way of doing business is about to get a whole lot harder.
Vermont's bill has already passed through both houses and now only requires a sign-off by the state's governor, Peter Shumlin, according to the Ars Technica. Shumlin is expected to sign the bill as early as this coming June.
The bill, like so many others that are in the developing stages around the country, would force pharmaceutical companies to justify sudden and dramatic price hikes for their drugs without a clear justification as to why. And if the only reason appears to be "because I want to," such companies risk the threat of penalties.
The bill was, of course, intended to address the problem of eye-watering drug prices in the state. The bill's language would require regulators to keep track of drugs that made large price increases: 50 percent or more in the last five years, or 15 percent or more over a year. The makers of those drugs might be called to justify the new pricing. And if regulators don't like what they hear, it's a $10,000 fine.
But the problem is that the law seems to be rather scant on how it is to be enforced against manufacturers. Additionally, even if it is enforced, criminal sanctions would probably be more of an incentive to comply in good faith. The $10,000 fine seems like a slap on the wrist and the language of the bill simply encourages pharma makers to start increasing their prices at the rate of 14.9 percent yearly.