DC drug price controls unconstitutional: court

A US District Court judge has struck down a state law passed last year which would have enabled the District of Columbia to seek a compulsory license so that the city of Washington's Department of Health could give a patent to a generics maker, if the price of a drug sold to the city was deemed excessive (Marketletter May 16, 2005).

Ruling on a suit brought against the Prescription Drug Compulsory Manufacture License Act of 2005 by the Pharmaceutical Research and Manufacturers of America and the Biotechnology Industry Organization, Judge Richard Leon said the law directly conflicted with incentives provided to drugmakers under federal patent law to develop innovative new products, and that it went against the will of Congress.

The law, which the DC Council passed unanimously last September, defined "excessive" prices as those 30% higher than in developed nations such as Australia, Canada, Germany and the UK. It would have required companies to prove the price was not excessive, citing R&D costs, profit margins, etc.