Wednesday, October 19, 2005

A pharmaceutical trade group is suing the D.C. government, saying the city’s price-control law on prescription drugs will cut supplies, inhibit development and result in a “limitless parade of lawsuits.”

The Pharmaceutical Research and Manufacturers of America (PhRMA) filed a challenge last week in U.S. District Court to block the District from implementing the law.

The law aims to cut prescription-drug costs by making it illegal to sell patented drugs at excessive prices, said D.C. Council member David A. Catania, at-large independent, health committee chairman and sponsor of the price-control legislation.

The council approved the legislation last month, and Mayor Anthony A. Williams signed it into law Oct. 3.

Mr. Catania said the law permits residents “affected by excessive prices” to sue a drug company if the wholesale price of a patented drug is 30 percent higher than the same drug’s price in Germany, Canada, Australia or the United Kingdom.

PhRMA attorney David W. Ogden yesterday called the law “legislation by litigation.” He predicted it would flood D.C. courts with lawsuits and hamper pharmaceutical companies’ efforts to develop new drugs.

“It sounds good, but the effect is to take money … and transfer it to trial lawyers,” Mr. Ogden told The Washington Times.

Mr. Catania said the District is not setting or fixing prices by enacting the law.

“We have established a consumer protection system that allows consumers to challenge excessive prices,” he said.

Mr. Catania said manufacturers will have to defend the high prices of drugs. If the price is ruled excessive, sales at the elevated cost could be halted and manufacturers could be ordered to pay civil penalties.

He said the law will “contribute to more people having access to essential prescriptions.”

In court documents, PhRMA attorneys called the legislation a “sweeping local law” that imposes “severe price controls” on pharmaceuticals.

“The D.C. government’s claimed interest in lowering prices for only its citizens at best simply shifts the burdens of funding pharmaceutical research to other states, and at worst diminishes the amount of funding available,” PhRMA attorneys said in court documents. “Neither result serves the public’s long term interests.”

In addition, PhRMA attorneys said, the D.C. law conflicts with federal patent and commerce provisions by allowing local judges to rule on cases based on drug prices in foreign countries.

The trade group said in court papers that the D.C. law ties prescription-drug prices to those in other countries where “government-managed and/or government-provided healthcare artificially depress prices.”

Mr. Catania said he was not surprised by PhRMA’s legal challenge.

“The pharmaceutical industry, like the tobacco industry, has made a conscious decision that litigation is cheaper than following the law,” he said.

PhRMA officials bristled at the comparison.

“It’s absurd to compare [tobacco] to an industry dedicated to saving lives and improving health care,” PhRMA spokeswoman Wanda Moebius said.

She said PhRMA has been working with local hospitals and clinics to provide thousands of low-income and elderly residents with access to cheaper medication.

Last week, a U.S. District Court judge refused to grant a temporary restraining order sought by PhRMA to block publication of the law in the D.C. Register.

The trade group still is seeking a preliminary injunction to bar enforcement of the law. A judge is expected to hold hearings on the case next month.

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