The D.C. Council unanimously passed a measure yesterday that would make it illegal in the city to charge "excessive prices" for prescription drugs and, in some cases, allow the District government to make its own arrangements to have drugs produced more cheaply.
The measure is strongly opposed by the pharmaceutical industry, and a spokesman for Mayor Anthony A. Williams (D) said the mayor has some legal concerns that have to be addressed before he can support it. The bill will return to the council for a second vote in July.
The council also voted yesterday to close a loophole that has allowed landlords to bypass a law granting tenants first right to buy their buildings. That bill, which received final passage, would prevent a landlord from getting around the law by selling less than 100 percent interest in a building. Williams intends to sign it, spokesman Vince Morris said.
The council also voted unanimously, on final passage, to extend rent control for five more years.
The sponsor of the drug bill, David A. Catania (I-At Large), said the legislation merely allows the city to exercise its broad powers to regulate trade in the District. He said the purpose is not to get the city into the drugmaking business but to encourage drug companies to "right-size their pricing policies."
Under the bill, drug prices in the District would be compared to prices in Europe, Canada, Australia and other countries to determine whether drug companies were charging District residents excessively. A resident who felt gouged could bring a lawsuit. In addition to imposing damages, a judge who found a company in violation of the provision could authorize the District to license a specific drug to an alternative manufacturer.
Catania said the effort is similar to what the federal government did during the 2001 anthrax crisis, when it pressured the manufacturer of the drug Cipro to reduce its prices.
Drug industry officials said that drug prices reflect the value of the research that made the drugs possible and that the legislation would undercut researchers' work.
"We are very disappointed the city council is taking the first steps in undermining the intellectual property rights that are critical incentives for future research and innovation to develop new prescription medicines," Ken Johnson, senior vice president of the Pharmaceutical Research and Manufacturers of America, said in a written statement. "We hope that on further consideration, the council will understand the policy and legal ramifications with this proposal and instead look to other ways to improve the access and affordability of medicines for District residents."
Legal advisers to the mayor believe that the bill, as passed, is too broad and could trample on federal patent laws, Morris said.
The rising cost of brand-name drugs is propelling the bill. U.S. spending on prescription medicines has more than quadrupled since 1990, according to the Kaiser Family Foundation, and annual double-digit increases are likely through 2013.
Catania said he would try to accommodate industry amendments before the bill comes up for a final vote.
Supporters of tenant rights hailed final passage of the bill to close the loophole used by landlords to avoid selling buildings to tenants. Twelve council members voted in favor of the bill, sponsored by Jim Graham (D-Ward 1) and Phil Mendelson (D-At Large). Sharon Ambrose (D-Ward 6) voted "present."
After years of debate and a month of negotiations that ended yesterday morning, the council passed a revised bill to outlaw the legal maneuver that has prevented thousands of renters in hundreds of buildings from taking advantage of the city's tenant-right-to-purchase law.
Shaun Pharr, senior vice president of government affairs for the Apartment and Office Building Association of Metropolitan Washington, said his organization continues to oppose the bill because it "injects ambiguity instead of clarity" into the sale of a building.
The bill eliminates the definition of a sale as the transfer of 100 percent interest in a building. Under the old definition, landlords would sell 95 percent of a building to avoid triggering the tenant-purchase option. The bill imposes a deadline on tenants, giving them 45 days to express interest in matching a sales offer. After that, the sale would go through as proposed. Graham said the bill's passage would stimulate homeownership in the city.
"There is going to be a great increase in the number of buildings offered to tenants, rather than having their rights extinguished in a secretive process," Graham said.
Hundreds of renters and tenant activists held a morning rally outside the John A. Wilson Building in support of the measure and then packed the council chamber.
