- The Washington Times - Sunday, October 30, 2005

The D.C. government is facing a federal lawsuit for the second time this month over a new law that ties the cost of patented drugs to prices in other countries.

The Biotechnology Industry Organization, based in the District, filed a lawsuit against the city last week in U.S. District Court, arguing that the legislation will “import a system of price controls” that will limit drug research and development.

Pharmaceutical Research and Manufacturers of America (PhRMA) filed a similar legal challenge two weeks earlier in the same D.C. court.

The trade groups want to block the Prescription Drug Excessive Pricing Act of 2005, which permits civil sanctions against drug companies if patented drugs are sold at more than 30 percent above the prices in Australia, Canada, Germany or the United Kingdom.

Officials say the legislation is the first of its kind in the country.

Sponsored by D.C. Council member David A. Catania, at-large independent, the legislation won unanimous council support in September. It was approved by Mayor Anthony A. Williams, a Democrat, earlier this month and is set to take effect early next year.

The Biotechnology Organization said in its Oct. 27 complaint that the law will have national implications that would reduce investment in drug research.

“This is not the balance that Congress established, and this is not the D.C. Council’s decision to make,” the complaint says.

Mr. Catania called his legislation a “consumer-protection system” that will help make prescription drugs more affordable to D.C. residents.

“This is a landmark piece of legislation, the first of its kind in the country,” he said. “We are not setting or fixing a price. We have established a consumer-protection system that allows consumers to challenge these exorbitant prices.”

When he announced council’s approval of the legislation in September, Mr. Catania said it had the support of the Metropolitan Washington Labor Council, local churches and other influential groups.

Mr. Catania said the law will “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.”

Under the law, the D.C. government or any person in the District affected by excessive drug prices can sue a pharmaceutical company if the wholesale price is more than 30 percent higher than the price of the same drug in the four foreign markets.

Mr. Catania said the drug manufacturer would have to defend the price. If the drug’s cost is deemed excessive, sales would be halted at that price and a judge could issue a civil penalty against the manufacturer.

Attorneys for PhRMA said in a legal filing that the law would result in a “limitless parade of lawsuits” that would stifle development.

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