Drug Price Ceilings Overturned
An appeals court ruling today struck down Washington, D.C.’s price ceilings for prescription drugs. In Biotechnology Industry Organization v. District of Columbia, the Court of Appeals for the Federal Circuit upheld a federal district court ruling that held that D.C.’s municipal price-control ordinance was preempted by federal patent laws.
The D.C. Council had voted to ban “excessive prices,” a vague term for which they provided no specific statutory definition. The Council did, however, include a provision declaring that a drug price is presumptively excessive when it is “30% higher than the comparable price” charged in Australia, Germany, the United Kingdom, or Canada.
It also authorized lawsuits against pharmaceutical manufacturers by any organization claiming to act “in the public interest;” “any person” claiming to be affected by excessive drug prices; any organization that represents such persons;” and “the District of Columbia” itself.
In such lawsuits, lawyers for the prevailing parties would receive “attorneys’ fees,” while the plaintiffs would receive “treble damages,” and the D.C. Government would receive monetary “fines.”
The Washington Legal Foundation provides background on the case here. A law firm that handled the legal challenge to the ordinance describes the ruling here.