Washington Prescription Drug Price Law Violates Federal Patent Law

Armen Hareyan's picture

Prescription Drug Price Law

A federal appeals court on Wednesday ruled that a Washington, D.C.,law that allows the district to control prescription drug pricesviolates federal patent law, the Washington Post reports (Leonnig, Washington Post, 8/3).

Thelegislation, sponsored by D.C. Council member David Catania, wasdesigned to allow residents to file suit against a drug company if ajudge determines the drug's cost to be excessive, which is defined inthe law as more than 30% of the drug's price in Germany, Australia,Canada or the United Kingdom. Companies found to charge excessiveprices could be fined or forced to lower their prices. Former MayorAnthony Williams signed the measure into law in October 2005, after thecouncil approved it in September 2005. The Pharmaceutical Research and Manufacturers of America and the Biotechnology Industry Organizationfiled a legal challenge to the law. U.S. District Judge Richard Leon inDecember 2005 ruled that the law is unconstitutional, stating that thelaw violated protections of interstate commerce and was in oppositionto the will of Congress (Kaiser Daily Health Policy Report, 1/3/06).

InWednesday's decision, the judges wrote, "In the district's judgment,patents enable pharmaceutical companies to wield too much market power,charging prices that are 'excessive' for patented drugs," continuing,"The act is a clear attempt to restrain those excessive prices, ineffect diminishing the reward to patentees in order to provide greaterbenefit to district drug consumers." They wrote, "This may be a worthyundertaking on the part of the district government, but it is contraryto the goals established by Congress in the patent laws."


According to the Post,city officials said they do not think the ruling immediately will causea drug price increase in the district but added that drug makers nowwill have more freedom to charge higher-than-average prices.


Catania on Thursday said the ruling is "extreme in its scope," addingthat he will consult with the D.C. attorney general about possibleappeals.

Ken Johnson, senior vice president of PhRMA, said,"By ruling that federal patent law pre-empts the District of Columbia'sprice control law for patented prescription medicines, the court haspreserved crucial incentives for continued discovery and creation ofnew medicines" (Washington Post, 8/3).


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