- The Washington Times - Wednesday, December 29, 2004

A federal judge has blocked part of a new D.C. law that proponents say would cut the cost of prescription medications by forcing firms that negotiate drug prices for health plans to disclose financial information about their business practices.

U.S. District Court Judge Ricardo M. Urbina made the ruling in a decision on Dec. 21 and issued a temporary injunction to block enforcement of a key provision in the city’s new AccessRx law.

The provision would have required pharmacy benefits managers, who negotiate drug prices for health plans, to disclose information about their marketing costs and funds they receive from drug makers.

The Pharmaceutical Care Management Association sued the District on June 29 to block a Title II of the District’s AccessRx law, saying its “onerous disclosure requirements” would reveal trade secrets without compensation and mean higher drug prices for city residents.

“It’s like playing poker with all your cards on the table,” Stephanie Kanwit, special counsel for the group, said yesterday.

She said pharmaceutical benefits managers can’t negotiate lower drug prices from pharmaceutical manufacturers, “when you have a law that requires you to reveal all sorts of information about pricing.”

Other parts of the AccessRx law were not challenged by the lobbying group and remain intact, including a program to provide prescription benefits to low-income seniors with an income that is less than 200 percent of the poverty level and to residents with a household income of not more than 350 percent of the federal poverty level.

Federal poverty level is $9,393 for a person and $18,810 for a household of four persons, according to U.S. Census Bureau statistics.

Judge Urbina wrote in his ruling that Title II of the District’s AccessRx law requires pharmacy benefit managers to disclose “a host of different financial information and terms of contracts between themselves and pharmaceutical manufacturers.”

He wrote that the Pharmaceutical Care Management Association has demonstrated that it will suffer “irreparable injury if the injunction is not granted” to block the disclosure requirements.

However, the D.C. Office of Attorney General disagreed, defending the new law in court papers as “the legislature’s reasonable action taken in the public interest.”

“It should go without saying that the public interest is served by allowing the District to protect its citizens from the spiraling costs of health care,” argued Richard S. Love, chief of the equity section of the Attorney General’s Office.

Judge Urbina said the decision could be overturned when the lawsuit is resolved.

The AccessRx law was sponsored by D.C. Council member David A. Catania, at-large independent.

Mr. Catania, who was unavailable for comment yesterday, has said the disclosure provision would have cut the cost of prescriptions by demanding more accountability from pharmacy benefit managers.

In July, Mr. Catania called the association’s lawsuit a tactic to “protect their ability to price gouge.”

“Like the tobacco industry before them, the use of lawsuits will not be able to protect them from being held accountable for anti-consumer actions,” Mr. Catania said.

The AARP has filed legal papers in the support of the District.

“Greater … transparency will result in a more efficient market causing drug to decline,” the AARP attorneys argued in a legal filing earlier this month.

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