- The Washington Times - Thursday, December 22, 2005

A federal judge yesterday struck down a new D.C. law that tied the cost of patented prescription drugs sold in the District to wholesale prices in foreign countries.

The Prescription Drug Excessive Pricing Act of 2005 sought to permit civil sanctions against drug companies if patented drugs were sold for more than 30 percent above prices in Australia, Canada, Germany or the United Kingdom.

U.S. District Judge Richard J. Leon yesterday ruled in favor of two trade groups that sued the District in October to block the law.

“Punishing the holders of pharmaceutical patents in this manner flies directly in the face of a system of rewards calculated by Congress to insure the continued strength of an industry vital to our national interests,” Judge Leon said in a 28-page opinion.

Judge Leon called the law a “well-intentioned” but “thinly veiled effort” to force drug makers to limit prices.

The Pharmaceutical Research and Manufacturers Association (PhRMA) and the Biotechnology Industry Organization sued the District over the legislation in October.

The legislation was approved unanimously by the D.C. Council and Mayor Anthony A. Williams, a Democrat.

Council member David A. Catania, the at-large independent who sponsored the bill, could not be reached for comment yesterday.

It was not clear whether the District plans to appeal Judge Leon’s decision.

Pharmaceutical industry officials praised the ruling.

“Today’s decision … protects both patients and the quality health care we enjoy in this country,” said Billy Tauzin, president and chief executive officer of PhRMA.

“This nation leads the world in the development of new medicines because of the market-based system in place that rewards innovation and drives future discovery,” Mr. Tauzin said.

Jim Greenwood, president and chief executive of the Biotechnology Industry Organization, said the law would have slowed development of new drugs.

“These delays would have had a profound impact on the biotech industry, where most companies are still in the research stage and heavily dependent on investment capital,” he said.

Mr. Catania has said the legislation would “contribute to more people having access to essential prescriptions, employers being better able to afford coverage for their employees and the District providing health services to underserved populations.”

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