A federal appeals court has thrown out a District law that empowered citizens to sue drug companies over high-priced medications, concluding the statute was well-intentioned but clearly out of the city’s jurisdiction.
The 2005 law, advocated by D.C. Council Member David Catania, made it illegal for a drug manufacturer to sell medications “for an excessive price,” defined as 30 percent more than the same drug’s cost in the United Kingdom, Germany, Canada or Australia. It further provided citizens and the government the right to sue and collect damages.
Soon after the law’s passage, both the Biotechnology Industry Organization and the Pharmaceutical Research and Manufacturers of America sued, claiming theDistrict was unlawfully controlling prices and tinkering with patent law, a right held solely by Congress.
The three-member panel of the U.S. Court of Appeals for the Federal Circuit agreed, ruling the law “is a clear attempt to restrain those excessive prices, in effect diminishing the reward to patentees in order to provide greater benefit to District drug consumers.”
“This may be a worthy undertaking on the part of the District government, but it is contrary to the goals established by Congress in the patent laws,” the panel concluded. “The District has thus seen fit to change federal patent policy within its borders.”
A District Court injunction prevented the law from ever taking effect. In a statement, PhRMA called the decision a “victory for patients,” one that has “preserved crucial incentives for continued discovery and creation of new medicines.”
Catania could not be reached for comment late Thursday.
