Plan to Curb Drug Prices Is Rejected;Justice Calls Link To Inflation Illegal
The Justice Department yesterday rejected as anti-competitive a plan drawn up earlier this year by the pharmaceutical industry in an effort to curb drug prices.</br></br>The plan, devised by the Pharmaceutical Manufacturers Association and submitted to the department in March for review, would have limited average price increases on drugs to no more than the annual change in the consumer price index.</br></br>However, Anne K. Bingaman, assistant attorney general in charge of the antitrust division, said the plan is a type that has been specifically held illegal by the Supreme Court.</br></br>"Agreements among competitors, including agreements setting maximum prices, that interfere with the ability of each firm in a market to determine its own prices have long been illegal under the antitrust laws," Bingaman said in a prepared statement.</br></br>The pharmaceutical group noted yesterday that the price limits would have been voluntary and that drug price increases have moderated considerably since March. It said 17 companies, representing two-thirds of the U.S. prescription drug market, had pledged individually to keep price increases "at or below the rate of inflation."