A sue on the soaring costs of prescription drugs

The main trade group representing the country's largest drug manufacturers is suing the District over a bill recently passed by the D.C. Council to rein in the soaring costs of prescription drugs.

Calling it "bad medicine" for consumers, the D.C.-based Pharmaceutical Research and Manufacturers of America (Phrma) has filed a lawsuit in U.S. District Court for the District of Columbia, seeking declaratory and injunctive relief.

"By imposing price controls on patented prescription drugs, the D.C. [legislation] directly undermines the system Congress established to promote invention and the public health," says the lawsuit. "This sweeping legislation targets only on-patent drugs and attempts to deny the very benefit that Congress conferred; it punishes patent holders for recouping research and development costs and realizing the incentives that Congress has deemed necessary to promote future discoveries to public health."

The D.C. Council on Sept. 20 voted 13-0 in favor of the bill, called the Prescription Drugs Excessive Pricing Act, which makes it illegal to sell patented medicines for an "excessive price." D.C. Council member David Catania, I-at large, who is chairman of the council's health committee, authored the legislation.

"This is a simple consumer protection issue," Catania said when the bill was approved. "As the cost of prescriptions goes up, drug companies' profits soar. All the while, consumers are forced to consider whether they can afford life-preserving medicines." Under the bill, the District government or any person affected by excessive prices may initiate legal action against a drug company if the wholesale price of a patented prescription drug in D.C. is 30 percent higher than the same drug's price in Australia, Canada, Germany or the United Kingdom. In court, the manufacturer must prove that its drug is not excessively priced. Otherwise, sales at the elevated cost may be halted or other civil penalties imposed on the drug maker.

The lawsuit counters: "These countries use systems of reference pricing, socialized medicine, and/or price controls to limit the returns that pharmaceutical manufacturers may earn; in doing so, they undercut the financial incentives, made possible by a patent's grant of exclusivity, that drive future research and discovery."

For these and other reasons, the pharmaceutical trade group seeks, in its suit, "a permanent injunction against the publication and enforcement of the [bill], a declaration that the [bill] is unconstitutional and invalid, and other appropriate relief." Listed as defendants in the suit are D.C. Mayor Tony Williams, the city's attorney general, Bob Spagnoletti, and Arnold Finlayson, administrator of the D.C. Office of Documents and Administrative Issuances.

Ken Johnson, a senior vice president at the pharmaceutical association, says the new D.C. bill "would have a chilling effect on the research and development of new treatments and even possibly increase the amount of time patients must wait for medicines to be discovered and used. This is why Phrma has no choice but to ask the courts to prevent the implementation of this damaging, unconstitutional legislation." He adds, "This is unfortunate, but it is a step that must be taken to protect patients and quality health care."

Catania and other D.C. Council members say the drug industry's argument does not hold up. Catania said last month: "Drug companies are lining their pockets as the cost of medicine increases beyond the means of our residents. Once implemented, this 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."

The D.C. Council gave its initial approval to the bill in early July. Catania has changed the legislation several times since introducing it in February. At first, he wanted to use the city's power of eminent domain to crack down on high medication costs, but that strategy did not pan out. Catania has said all along that he expects the drug industry to file lawsuits. He's even told Washington Business Journal that he "welcomes them."

Says Phrma's Johnson: "We look forward to the court moving expeditiously to set a schedule for hearing the underlying legal and constitutional questions raised by our lawsuit. We are confident that once the court fully hears the constitutional problems raised by the District's government-mandated price controls legislation, it will agree that the District [bill] is not only bad for patients, it is also unconstitutional."

Source: RefillPill.com Editors' Choice