[Ip-health] Consumer Groups Challenge Unconscionable Pricing of Life Saving Drugs

[Mike Palmedo]

PRESCRIPTION POLICY CHOICES
NATIONAL LEGISLATIVE ASSOCIATION ON PRESCRIPTION DRUG
PRICES

For immediate release:
November 6, 2006

Contact:
Sharon Treat, 207-622-5597, nlarx@gwi.net
Sean Fiil-Flynn, 202-274-4157, sflynn@wcl.american.edu

Consumer Groups Challenge Unconscionable Pricing of
Life-Saving Drugs

Groups say PhRMA and biotech industry lawsuit
threatens public health and states rights; Seek
representation as "friend of the court" in
First-in-Nation case

WASHINGTON, D.C.-- On Monday November 6, Prescription
Policy Choices and the National Legislative
Association on Prescription Drug Prices (NLARx) will
move to file a "friend of the court" brief in support
of the District of Columbia law that sets reasonable
limits on unconscionably priced prescription drugs.
That law has been challenged in federal court by the
pharmaceutical industry trade organization PhRMA and
the Biotechnology Industry Organization (BIO).  The
Court of Appeals for the Federal Circuit in D.C. will
decide whether the consumer groups will be allowed to
participate in the case as amici ("friends of the
court") and will decide the merits of the case.

The D.C. law seeks to make prescription drugs more
affordable by setting a benchmark price - 30% above
the price of the same drugs in 4 industrialized "high
income" countries.   The law provides a legal remedy
to those affected by excessive prices, and gives the
drug makers an opportunity to justify pricing
decisions by showing that prices reflect legitimate
costs, such as R&D.

As the friend of the court brief explains, some of the
price differentials between the U.S. and other high
income countries are extreme and unrelated to the need
to recoup research and development costs.  Norvir, for
example, is an AIDS drug discovered in performance of
a multi-year multi-million dollar research grant from
the National Institutes of Health.  Before December
2003, the price of Norvir in the U.S. was about twice
as high as the price in Canada or any Western European
country, and then Abbot Laboratories increased the
U.S. price five fold - to $7,800 for the same supply
that can be purchased in Canada for $760.   Xalatan,
the world's #1 selling glaucoma treatment, was
discovered under a U.S. government multi-million
dollar grant and yet is sold in the U.S. for more than
six times the price in Denmark.   Some cancer
treatments are sold for over $100,000 even though the
most important stage of their research was paid with
U.S. government grants.

"Like the robber barons of an earlier age, PhRMA would
charge 'whatever the market will bear.'  The
courageous leaders of Washington D.C. are now testing
whether our legal system requires such a cruel
economic calculus, or whether the government can
restore a degree of fairness.  The well-being of
countless working people across the country is at
stake," stated Maine State Representative John
Brautigam, Chair of the Prescription Policy Choices
board.

The D.C. law under challenge was sponsored by NLARx
Vice Chair David Catania, a Council Member at Large
and Chair of the District's Health Committee. "The
District of Columbia is to be commended for leading
the way nationally in putting reasonable limits on the
unconscionable pricing of medicines," said Maine State
Senator Arthur Mayo III, Chair of the Board of NLARx.


"Legislators across the country are closely following
this lawsuit, which could restrict the ability of
states to insure that their citizens can afford
life-saving medicines.  The huge cost increases for
important medications, such as cancer treatments, have
put the health of working families at risk," stated
Senator Mayo.

"We are calling on the appeals court to restore to the
states their longstanding authority to protect the
health and safety of their citizens by banning price
gouging of the necessities of life," said Sharon
Treat, NLARx Executive Director.  "NLARx is seeking to
participate as an amicus in this case so that we can
address what we view as a misapplication of patent law
to traditional state public health initiatives and
measures to prevent unconscionable pricing of
prescription drugs."

Recent prescription drug price increases have exceeded
400% for some cancer and other critical medications.
Some cancer drugs now cost as much as $100,000 per
year, affordable only by those who are wealthy or with
extraordinarily generous health insurance.  Yet the
ability of states to address this situation will be
eliminated if the initial ruling in the D.C. case is
allowed to stand.

"The scope of the arguments of PhRMA and the biotech
industry, and the district court's ruling, is
breathtaking. On their face, they would ban every
application of a price gouging statute to every
product that contains a patented component or is
patented in its entirety, including patented gasoline
formulations, medications, vaccines, medical devices
and a huge array of other products. All consumers in
the U.S. would be seriously affected if this expansive
new doctrine is allowed to stand," said Sean
Fiil-Flynn, counsel for NLARx and Prescription Policy
Choices.  Mr. Fiil-Flynn, Associate Director of the
Program on Information Justice and Intellectual
Property at American University's Washington College
of Law, is an expert on patent law and prescription
drug issues.

"This case is not really about patent law; it is about
fair prices for prescription drugs.  When the Medicare
Part D drug benefit was passed, the Congressional
leadership prohibited Medicare from negotiating lower
prices.  All that the District of Columbia wants is to
negotiate for lower drug prices." observed West
Virginia Law Professor Kevin Outterson, a member of
the Prescription Policy Choices board.

Because of the wide range of state and consumer
interests potentially affected by the holding, sixteen
national and community-based organizations have joined
with NLARx and Prescription Policy Choices to defend
the D.C. fair pricing law.  They include organizations
working to decrease the costs of prescription drugs,
elderly individuals struggling to afford the medicines
needed to maintain their health, people with
debilitating diseases, members of unions and other
workplace organizations, low-income, unemployed or
otherwise vulnerable members of society without access
to health care and other major classes of drug
consumers, and organizations concerned with public
interest intellectual property policy.

The National Legislative Association on Prescription
Drug Prices is a nonpartisan, nonprofit organization
of state legislators from across the country who
advocate for lowering prescription drug costs and
increasing access to affordable medicines.
Prescription Policy Choices is a nonprofit
organization which provides educational and research
materials and advocacy to state legislators,
academics, policymakers, and the general public to
assist them in addressing the issues of reducing
prescription drug prices and increasing access to
affordable prescription drugs in the United States.
Legislators from the District of Columbia and all of
the New England states plus Pennsylvania, New York,
West Virginia, Oklahoma, Texas, Alaska, Arizona, and
Hawaii are members of NLARx.

The complete list of consumer groups seeking to
participate as amici in the D.C. lawsuit includes:
National Legislative Association On Prescription Drug
Prices, Prescription Policy Choices, Action Alliance
Of Senior Citizens Of Greater Philadelphia, AFSCME DC
37 Health & Security Plan, Alliance For Retired
Americans, American Federation of State, County And
Municipal Employees, Breast Cancer Action, Council on
Aging Services for Seniors, Greenlining Institute,
Health Care For All, Metro New York Health Care For
All, Mon Valley Unemployed Committee, Patients Not
Patents, Prescription Access Litigation Project,
Public Patent Foundation, Senior Action Network,
United Senior Action Of Indiana and Wisconsin Citizen
Action.

Resources:

Kevin Outterson,
Prescription Policy Choices, www.policychoices.org
Professor of Law, West Virginia University,
304.293.8282

Sean Flynn,
Program on Information Justice and Intellectual
Property, 202.274.4157

Sharon Treat,
Executive Director, National Legislative Association
on Prescription Drug Prices,
207-622-597, www.nlarx.org