After watching the city’s spending on drugs for Medicaid recipients and municipal employees rise 256 percent during his seven-year tenure, Washington, D.C., City Council member David Catania came up with a plan for high-concept health care legislation. His law? That the city can invoke eminent domain over drug patents, then make the drugs available as cheaper generics.
It’s not as far-fetched as it sounds. For decades, the United States has used eminent domain to issue compulsory licenses in the defense industry. Patent holders get “just compensation” —such as the 1 percent royalty Hughes Aircraft made on its satellite technology after the courts ruled that 15 percent, or $3.3 billion, was excessive. The same could happen in health care. During the 2001 anthrax scare, Health and Human Services Secretary Tommy Thompson threatened to ignore Bayer’s Cipro patent to get hold of a cheaper generic; Bayer ended up boosting production and cutting the price.
Under pressure from businesses, Catania was undaunted. He rewrote the measure, minus the eminent domain language, and instead drew on the city’s powers to protect consumers. On a first vote, the council unanimously supported the new bill, which would allow residents to sue a drug company for “excessive prices,” when compared with those in Canada and elsewhere. If he can win this one in a final vote this summer—a big if, we know, since many great artists enjoy little success during their lifetimes—and a judge rules a drug is too pricey, the court could issue a compulsory license, authorizing the city to turn to another manufacturer.
Plus, Catania’s idea isn’t just high-concept; it’s virtual, since, he claims, the district would never have to enforce it. Drug companies would preemptively negotiate with the city to stay out of the courts, explains Catania. “They’ll do anything they possibly can to avoid discussing how they price their drugs,” he says. His constituents, meanwhile, would celebrate the bargains.
