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Dc council legislation blocks pharmaceutical price gounging { September 21 2005 }

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Council Approves Bill on Suing Drug Companies Over Costs
Emergency Katrina Legislation Also Passed

By Eric M. Weiss
Washington Post Staff Writer
Wednesday, September 21, 2005; B01

The D.C. Council approved legislation yesterday that would make it illegal for pharmaceutical companies to sell prescription drugs at an "excessive price" in the District, but its sponsor expects the industry to try to block it.

The bill, passed unanimously, could give consumers and the D.C. government a legal advantage when suing pharmaceutical companies over prescription drug prices, sponsors said. It puts the burden of proof on pharmaceutical companies to prove that their prices are not excessive.

The legislation defines excessive as being 30 percent over the comparative price in Germany, Canada, Australia or the United Kingdom. The bill would allow civil penalties against the drugmaker.

Council member David A. Catania (I-At Large), author of the bill, said the legislation eventually would result in lower drug costs for D.C. residents, but only after what he expects to be a lengthy legal challenge. Mayor Anthony A. Williams (D) will sign the bill, said spokeswoman Sharon Gang.

The Pharmaceutical Research and Manufacturers of America said the bill would stifle supply, smother innovation and harm the District's business climate.

"The D.C. city council's price control bill is bad medicine for every District resident who relies on prescription drugs," industry spokesman Ken Johnson said in a statement. "If local governments unilaterally cap medicine prices based on artificially low foreign prices, companies may be forced to make difficult decisions about the scope and type of research and development investments, keeping new medicines in the laboratory longer and out of the neighborhood pharmacy."

Johnson did not rule out legal challenges or an effort to stop the bill during the congressional review period for all District-passed legislation.

"We think this bill will have a bad impact on patients and others and we are focusing on making that point every chance we get," he wrote in an e-mail reply to questions.

One independent expert said the bill could prompt drug companies not to sell their products in the city.

The president of a D.C.-based nonpartisan organization that studies health policy said pharmaceutical companies could refuse to sell drugs to D.C. businesses, especially because many customers could cross into Virginia and Maryland for their prescriptions.

"The probable effect of this would be that there would be no pharmacies left in D.C.," said Paul Ginsburg, president of the Center for Studying Health System Change.

Catania anticipates a hard battle. "The pharmaceutical industry, just like the tobacco industry, rather than obey the law, will file lawsuits and litigation because it's cheaper to litigate than to obey the law," he said.

He said he will coordinate strategy with Williams but did not rule out the city's filing suit in its capacity as a large purchaser of prescription drugs and as a regulator.

Soaring drug prices have prompted nationwide concern, but Catania, chairman of the council's health panel, said the District's bill is the first of its kind. He said he has fielded inquiries from legislators in other states, such as Maine, who are interested in introducing similar bills.

The council also approved emergency legislation to waive residency, identification and other requirements for social services that the District is providing to Hurricane Katrina evacuees.

Catania, who introduced the bill with Williams, said it was needed because many of the evacuees who were flown to the city and housed at the D.C. Armory came with only the clothes on their backs and do not have legal identification, pay stubs, Social Security cards and other documents ordinarily needed to obtain services such as food stamps and temporary assistance for needy families. The waivers would be retroactive to the date of the hurricane.

The measure passed unanimously, but some council members said they would like longtime city residents to receive the same swift and comprehensive government response that Katrina victims received.

"We did what was necessary for those who came to the District from the Gulf Coast, but we did not use the same techniques and commitment for those who have been here for years," said council member Vincent C. Gray (D-Ward 7). "Let's continue to reach out to those in the District of Columbia who are in similar conditions for different reasons."

Council member Adrian M. Fenty (D-Ward 4) said conditions at D.C. Village, the city-run shelter for homeless families, are "10, 20, 30 times worse than the conditions at the armory. It's an embarrassment that we haven't worked this hard for the benefit of our own citizens."

The council agreed to an amendment offered by Vincent B. Orange Sr. (D-Ward 5) that would require Williams to compile the number of city residents on social service waiting lists and estimate the cost of immediately providing services.

Staff writer Susan Levine contributed to this report.

2005 The Washington Post Company

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