In October 2005, the District of Columbia (DC) enacted the “Prescription Drug Excessive Pricing Act of 2005.” [Text]. As its name implies, the legislation prevents excessive pricing of patented drugs.
(a) A prima facie case of excessive pricing shall be established where the wholesale price of a patented prescription drug in the District is over 30 percent higher than the comparable price in any high income country in which the product is protected by patents or other exclusive marketing rights.
(b) [If a prima facie case is made, a defense is to show that the] given prescription drug is not excessively priced given demonstrated costs of invention, development and production of the prescription drug, global sales and profits to date, consideration of any government funded research that supported the development of the drug, and the impact of price on access to the prescription drug by residents and the government of the District of Columbia.
BIO and PhRMA immediately filed suit charging that the law was an unconstitutional violation of the Dormant Commerce Clause and the Foreign Commerce Clause, and asserted that the legislation was preempted under the Federal Patent Act. [Complaint].
The DC District Court quickly invalidated the legislation as both preempted and unconstitutional. [Opinion].
Now, the case is up on appeal at the Federal Circuit (05cv02015).
- In a dramatic press release, WilmerHale calls the law “sweeping and draconian” …
- STUDENT NOTE TOPIC: This case provides for an interesting note topic focusing on which appellate courts should have jurisdiction over constitutional and other challenges to the patent laws. (CAFC vs. Regional Circuits).