US drug industry body the Pharmaceutical Research and Manufacturers of America is suing the state government of Washington DC over its legislation aimed at reducing prescription drug prices.
The PhRMA alleges that the legislation - which would make it illegal for drug companies to charge excessive‚ prices for drugs - will cripple hold back the development of new drugs, create shortages and leave the sector open to “a limitless parade of lawsuits‚” according to a report in the Washington Post.
Washington’s new regulations, signed into law on October 4, suggest that an excessive price for a drug would be one 30% or more above the level charged in Germany, Canada, Australia or the UK. Those companies found guilty of over-pricing will be exposed to civil penalties, unless they can justify the pricing strategy in court.
The comparison with European pricing is invalid, according to the PhRMA, because in these countries’ national health system factors mean that medicines are often set at artificially low prices.
In its suit, the PhRMA maintains that the legislation would effectively set up government control of drug pricing, and would violate laws governing patents protection and interstate commerce. Not so, say the legislators, who claim the law does not set prices - merely defining a threshold for overpricing - and defines the terms and conditions of sale of patented products.
The architect of the new legislation, District Council Member David Catana, claims that people in Washington DC pay on average 68% more than their counterparts overseas for new prescription drugs.
A US District Court judge rejected a PhRMA request last week for a temporary restraining order to block publication of the law. A hearing in the case is scheduled for November 18.
- Meanwhile, the PhRMA has been accused of sponsoring a novel designed to scare Americans into opposing the trade in imported medicines from countries such as Canada, according to a report in the Globe and Mail newspaper. The novel, due for publication in December and called ‘The Karasik Conspiracy’ concerns a plot by Balkan terrorists to poison prescription drugs bought over the Internet.
The PhRMA denied it had commissioned the work, saying that funding for the book had been organised by a ‘rogue’ employee, and that any involvement has been halted.