Judge Rules D.C. Drug Price Law Unconstitutional
U.S. District Judge Richard Leon on Dec. 22, 2005, ruled that a Washington, D.C., law aimed at regulating prescription drug costs by making "excessive" prices illegal is unconstitutional, the Washington Post reports (Weiss, Washington Post, 12/23/05).
The legislation, sponsored by D.C. Council member David Catania, would allow residents to file suit against a drug company if a judge determines the drug's cost to be excessive, which is defined in the law as more than 30% of the drug's price in Germany, Australia, Canada or the United Kingdom. Companies found to charge excessive prices could be fined or forced to lower their prices. Mayor Anthony Williams signed the measure into law on Oct. 3, 2005, after the council approved it in September (California Healthline, 12/14/05).
The Pharmaceutical Research and Manufacturers of America and the Biotechnology Industry Organization in October 2005 filed a legal challenge to the law.
Leon ruled in favor of PhRMA and BIO, stating that the law violated constitutional protections of interstate commerce and was in opposition to the will of Congress. Leon's opinion stated that the law was in conflict with federal patent law "carefully crafted" by Congress to encourage the development of new prescription drugs.
Catania said he would appeal the decision and added that he might consider modifying the law (Washington Post, 12/23/05).
Billy Tauzin, president and CEO of PhRMA, said, "Today's decision ... protects both patients and the quality health care we enjoy in this country."
Jim Greenwood, president and CEO of BIO, said the law would have slowed the development of new drugs, which "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" (McElhatton, Washington Times, 12/23/05).