Posted At United Press International

BY : Astara March

New and potentially groundbreaking legislation has been approved by the Washington, D.C., City Council that would prohibit drug companies from selling prescription medications to the municipal government or in the city's pharmacies at prices more than 30 percent higher than the average in Australia, Great Britain, Germany and Canada.

According to the rules, which the council passed unanimously Sept. 20 and which await the signature of Mayor Anthony Williams, companies that violate the price restrictions will have to take their case to court and explain their reasoning to a judge.

The measure, known as the Prescription Drugs Excessive Pricing Act, is the first of its kind in the country, although the California Legislature currently is considering several similar measures.

Council member David Catania, who introduced the legislation, said he fully expects the pharmaceutical industry to fight its implementation.

"Pharmaceutical companies are following the lead of the tobacco industry, that finds it cheaper to litigate than to live within the law," Catania told United Press International. "I expect them to do everything they can to derail this legislation."

Catania said the act was a consumer-protection mechanism, not a potential pricing schedule. Under the new rules the D.C. government would not establish prices for the pharmaceutical industry. Rather, it would only insist the city's consumers not pay significantly more for their medications than people in other high-income countries.

Catania said the legislation was necessary because the district's collective bill for medications in 2004 totaled more than $200 million, and the annual double-digit increases in drug prices -- which are projected to continue until 2011 -- soon will make it impossible for the city to pay for pharmaceuticals for its Medicaid patients, mental-health patients, HIV patients, retirees and employees.

Some critics worry the legislation could prompt drug companies to pull their products from the city's pharmacies, but Catania said the potential public-relations backlash would render that possibility slim and, if it did occur, he said the city had legal remedies to prevent it.

He said it is far more likely that, once enacted, the measure would encourage Maryland and Virginia lawmakers to adopt similar legislation -- the same with other jurisdictions around the country.

Wanda Moebius, a spokeswoman for the Pharmaceutical Research and Manufacturers of America, said the four countries used by the D.C. Council for price comparisons operate socialized healthcare systems and artificially limit the prices at which medicines can be sold. Because the United States is a market economy, there is no way to equate drug prices.

"The comparison countries are not paying their fair share of the research and development costs and Americans are," Moebius told UPI. "It's true and it's unfair. The pharmaceutical industry works every day to save lives. It's not like the tobacco industry at all. Drug companies spend more on research and development than any other industry sector in the world. PhRMA companies alone invested $38.8 billion in research in 2004."

In a statement released Sept. 20, Ken Johnson, PhRMA's senior vice president, said pharmaceutical companies operate hundreds of assistance programs that can provide free or discounted medicines to consumers.

"More than 850,000 (people) nationally and 7,200 in (the district) have been matched to assistance programs in the past year," Johnson said. "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."