Drug Firms Seek Antitrust Law Exemption for Price-Curb Talks

In a move aimed at heading off the possibility of mandatory price controls, drug industry representatives said Tuesday that they will seek an exemption from federal antitrust laws so officials from various drug firms can meet to discuss voluntary price restraints.

The Pharmaceutical Manufacturers Assn., in a report given to the White House by industry leaders Monday, said that it would ask the Justice Department to grant what is known as a “business review letter” that would exempt companies from prosecution under the antitrust laws so that they can negotiate price restraints and enforcement mechanisms.

“It would allow them to have a conversation,” said Jeffrey Trewhitt, a spokesman for the PMA, which represents the country’s major drug manufacturers. “It (would) allow them to take recommendations and proposals, when it comes to price restraints, and sit down and talk about them. Right now, they can’t do that. They are not supposed to be talking about this with each other.”

The Clinton Administration has been extremely critical of the prescription drug industry, charging that excessively high drug prices are a major factor in escalating health care costs.

The industry has countered that drug prices must compensate for the money companies invest in the research and development of new compounds. It also maintains that drugs actually help hold down overall health care costs--by helping to shorten hospital stays, avoid surgeries and postpone nursing home confinements.

The PMA also proposed an alternative to the antitrust exemption--that the Administration seek individual companies’ pledges to restrain price increases.

“Ten leading manufacturers representing over 40% of the total market already have independently and voluntarily made public commitments to restrain their price increases to the consumer price index,” the PMA said in a statement. “The PMA board has urged the Administration to seek such commitments from other companies.”

The PMA opposes mandatory price controls, saying that its proposals “would make price controls unnecessary.”