## Facts

- The District of Columbia enacted the Prescription Drug Excessive Pricing Act of 2005 (PDEPA), making it unlawful for a manufacturer to sell a patented prescription drug in the District at an “excessive price.”
- The Act defined “excessive price” by comparison to prices charged in specified foreign countries and certain U.S. government programs.
- The PDEPA authorized District enforcement, including civil penalties and injunctive relief against manufacturers.
- Pharmaceutical Research and Manufacturers of America and the Biotechnology Industry Organization, representing member drug manufacturers and patent holders, filed pre-enforcement suits seeking declaratory and injunctive relief.
- The actions were consolidated, and plaintiffs moved for a preliminary injunction to prevent the PDEPA from taking effect.

## Issues

1. Whether the PDEPA, by targeting prices of patented prescription drugs, is likely preempted by federal patent law under conflict (obstacle) preemption.
2. Whether plaintiffs satisfied the requirements for preliminary injunctive relief, including irreparable harm, balance of harms, and the public interest.

## Decision

- The court granted a preliminary injunction barring enforcement of the PDEPA.
- The court held plaintiffs showed a substantial likelihood of success that the PDEPA is preempted because it conflicts with the objectives of the federal patent system.
- The court found enforcement would cause irreparable harm, including non-recoverable disruptions to pricing, distribution, and compliance.
- The court concluded the balance of harms favored plaintiffs because delaying a likely preempted law was less harmful than immediate enforcement.
- The court determined the public interest favored protecting the supremacy and uniform operation of federal patent law.

## Legal Principles

- Federal patent law preempts state or local measures that stand as an obstacle to Congress’s objectives in granting time-limited exclusive rights intended to yield economic rewards that encourage innovation.
- A jurisdiction may regulate the sale of patented products only if it does not intrude on the core federal patent bargain by selectively diminishing patent-derived returns.
- A pricing law aimed specifically at patented products, and designed to reduce the patent-enabled price premium, can constitute obstacle preemption even if price regulation is generally within local police powers.
- Preliminary injunctive relief requires likelihood of success on the merits and equitable factors supporting immediate relief, including irreparable harm and alignment with the public interest.

## Conclusion

The court preliminarily enjoined enforcement of the District’s patented-drug pricing statute because plaintiffs were likely to prove it was preempted by federal patent law as an obstacle to Congress’s scheme for incentivizing invention through patent-based economic rewards.


Pharmaceutical Rsch. & Mfrs. of Am. v. District of Columbia, 406 F. Supp. 2d 56 (D.D.C. 2005)