As Pacific Rim Trade Deal Nears End Game, Will Big Pharma Get Provisions to Limit Generic Access & Keep Brand-Name Prices High?

Negotiations for the Trans-Pacific Partnership (TPP) have been ongoing for several years and the Obama Administration is seeking to wrap up the 12-country deal by the end of 2013. While the agreed-to text of the TPP is secret, leaked negotiating offers and past experience with similar treaties with Australia and Korea, as well as recent cases under NAFTA, raise major concerns. Big Pharma is clear about what it wants: no compromise on intellectual property provisions, which aim to delay less expensive generic versions of brand name drugs. Recent reports in Inside US Trade indicate that compromise language may be offered by New Zealand and other countries when talks resume in Mexico in early October. It is impossible to evaluate the merits of such a proposal or its likelihood of success since both the negotiations and proposed text are secret.
While we would expect the pharmaceutical industry to support these anti-consumer policies, it is unfortunate that the US Trade Representative has consistently come down on the side of Big Pharma -- even though this stance is inconsistent with Administration budget provisions, the financial sustainability of the Affordable Care Act, continued funding of AIDS/HIV drugs, and would make it harder to implement recommendations such as those in a recent federal report urging Medicaid-style rebates in the Medicare Part B program (hospital-administered medications).
As reported by Act Up Paris and the InfoJustice Blog, over the past few years, provisions in trade agreements have been used to justify seizing legitimate shipments of generic medicines routing through the European Union, under the pretext of protecting "intellectual property" even though these medicines were neither counterfeit nor under patents in the source or destination countries.
Instead of encouraging U.S. states and Congress to pursue cost-effective prescription drug purchasing, as most other industrialized nations do (for example this UK program), the TPP and other trade deals will likely lock in already higher U.S. prices, and will seek to force other countries to raise prices. Read more analysis of the US government's TPP positions in this blog post by Knowledge Ecology International.
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More information:
Maine Citizen Trade Policy Commission's 2012 assessment of trade impacts including pharmaceutical policy
NLARx Executive Director Sharon Treat's analysis of the leaked US pharmaceutical pricing text and implications for state medicaid programs
Read the resolution adopted by NLARx in 2011 on trade and pharmaceutical policy, still relevant to the TPP negotiations.

For more information:

Sharon Anglin Treat, Executive Director
207-622-5597
streat@reducedrugprices.org

Federal GAO Report Concludes FDA, States Need Authority & Resources to Adequately Regulate, Inspect Compounding Pharmacies

Reporting on the July 2013 GAO report on regulation of compounding pharmacies has focused mostly on its conclusion that FDA's authority needs to be clarified strengthened to protect patient safety. This interview by Pharmalot shines a light on FDA's difficulties, including being required to obtain a warrant in order to inspect facilities. Unless Congress acts a lot more quickly than we have come to expect, though, it is unlikely that these changes will be made anytime soon, leaving the states to pick up the slack. The same GAO report makes clear, though, that state governments are not well equipped to fill in the gap.

The report states: "Some states may lack the fiscal or staff resources to provide the necessary oversight of drug compounding. A number of officials from state boards of pharmacy ... were concerned about resources in other states. They explained that, until recently, they depended on the states where the pharmacies were located to license and regulate those pharmacies. However, many state budgets have been cut and it is uncertain whether all states have the resources or qualified staff to inspect and otherwise appropriately oversee their licensed pharmacies. The effect of limited state resources may reach across state lines, and it may not be correct to assume that a pharmacy licensed by another state is being regulated adequately."

Pharmacy inspection practices differ significantly from one state to another and few states have the resources to inspect pharmacies in other states. The GAO report reviewed practices in only four states, finding that they have generally relied on the home states of the nonresident pharmacies to inspect pharmacies in other states shipping into their jurisdictions. The report included information from state officials and officials from national pharmacy organizations that the frequency of pharmacy inspections and the qualifications of the pharmacy inspectors vary widely among states. Pharmacy boards have opposed state legislation expanding regulation in some states, including Maine, where the board has a less-than-stellar record regulating traditional pharmacies, according to a recent report by the Center for Public Interest Reporting.

The compounding controversy is not going away. Compounded drug recalls due to safety concerns continue. Anthem has joined Harvard Pilgrim in restricting payment for some compounded drugs, adding the insurance industry to those pressuring for reform. Still, it doesn't look like the states will be coming to the rescue, given the experience in Legislatures this past year.

According to a report of the National Conference of State Legislatures (NCSL), as of June 24, 2013, 25 bills or resolutions concerning compounding pharmacies were introduced in 16 states, but measures were enacted and signed into law in only 6 states: Maryland, Virginia, Georgia, Tennessee, Texas, and Utah. Maine enacted legislation which was vetoed.

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For more information:

Sharon Anglin Treat, Executive Director
207-622-5597
streat@reducedrugprices.org

PhRMA, Pharmacists Sue Maine Over Importation, California Helps Out Biotech Drugmakers

Maine's importation law: The Maine Legislature enacted legislation in late June that allows personal importation of prescription drugs from several English-speaking countries with high safety and oversight standards. On September 10, PhRMA and allies including the Maine Pharmacy Association, the Retail Association of Maine, the Maine Society of Health System Pharmacists, and several individual pharmacists filed suit in federal District Court challenging the law. Here is the 23-page complaint. Listen to the MPBN news report and read this Bangor Daily News article for more. If the law is overturned, there will be repercussions for the state budget. The state employees' health plan offered CanaRx as an option before the program was stopped in 2012 by then-Attorney General William Schneider. The city of Portland and Hardwood Products of Guilford also offered employees the mail-order importation option. Ending the program cost the State nearly $3 million in savings under the Maine state employees' health plan and another $200,000 in savings for the city of Portland. The legislation had bipartisan support, with bills to restore the program introduced by both Democrats and Republicans.

California acts to boost Biotech profits, but will patients and consumers benefit?
California Governor Jerry Brown is deciding whether to sign a bill regulating quasi-generic versions of specialty biologic drugs known as biosimilars. The California Assembly and Senate have enacted different versions of legislation intended to boost biotech drug profits by reducing access to generic, or "biosimilar" versions of their drugs. As reported by Ed Silverman in Forbes, the controversial legislation limiting generic substitution has been rejected in 10 other states. Provisions in the California legislation have raised cost and access concerns among health payers like the California Public Employee Retirement System, according to Healthcare Payer News.

For more information:

Sharon Anglin Treat, Executive Director
207-622-5597
streat@reducedrugprices.org

States Again Look at Importing Drugs

Maine legislators have enacted significant legislation authorizing the importation of prescription drugs from several English-speaking countries.  The legislation goes into effect 90 days after the end of the legislative session, which is anticipated to conclude by October 10. The legislation was championed by a bipartisan group of legislators on behalf of both private and public employers that had operated mail-order importation programs until halted last summer by the previous Attorney General. With strong support from legislators on both the right and left, and the pro-local business flavor attached to this legislation, despite expressing reservations through his staff, Governor LePage allowed the bill to become law without his signature. This Pharmalot post provides some context and additional information about the Maine legislation. Learn more about drug importation, including online imports, at RxRights.org.
Link to the law

Meanwhile, the pharmaceutical industry is doing its best to ramp up fear of counterfeit imported drugs through industry-funded "consumer" groups, as in this MPBN radio report. In another sneaky move out of public view, the industry is trying to prevent online importation by controlling the internet domain name ".pharmacy".

Link to the Newsletter

For more information:

Sharon Anglin Treat, Executive Director

207-622-5597

streat@reducedrugprices.org  

Learn more about Importation

Pharmaceutical Prices and Patents Impacted by Trade Policy

The federal government is currently negotiating two trade deals that could have great significance for drug pricing. Negotiations for the Trans-Pacific Partnership (TPP) have been ongoing for several years and the Obama Administration is seeking to wrap up the 11-country deal by the end of 2013. While the agreed-to text of the TPP is secret, leaked negotiating offers and past experience with similar treaties with Australia and Korea, as well as recent cases under NAFTA, raise big concerns.

The TPP as well as the Trans-Atlantic partnership, which begins negotiations next month, will likely contain provisions that would empower foreign pharmaceutical corporations to directly attack our domestic patent and drug-pricing laws in foreign tribunals. Already under NAFTA, which does not contain the new rules proposed for TPP, drug firm Eli Lilly has launched such a case against Canada, demanding $100 million for the government's enforcement of its own patent standards - see Fact sheet on NAFTA patent case. In Australia, where a trade agreement similar to what is proposed in the TPP has regulated drug pricing for several years, a recent report shows price hikes as a result. Read more on Australia's experience and the public health community's concerns about the TPP here. Closer to home, the Maine Citizen Trade Policy Commission's 2012 assessment of trade impacts focussed on the potential that the TPP would increase drug prices generally and limit the operation of state Medicaid and other programs that negotiate or set reference prices. See also NLARx Executive Director Sharon Treat's analysis of the leaked text and its implications for state medicaid programs.

What can state legislators do? Get involved! Call your members of Congress and ask if they have reviewed the TPP text and understand the implications. Likely, they have not as the text is kept under wraps and only recently has at least one member - Congressman Alan Grayson - been able to read it. Here is a resolution adopted by NLARx in 2011 on trade and pharmaceutical policy; it remains relevant and could be a model for resolutions in state legislatures.

 

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State Legislators Have Mixed Results Regulating Compounding Pharmacies

 

Although according to the National Conference of State Legislatures (NCSL) 23 bills regulating compounding pharmacies have been introduced in 15 states, few of these bills have been enacted and signed into law. Maryland, Virginia and Georgia are three states that have chaptered laws beefing up standards and oversight. Many of these bills languish or died in committee; in Maine, the governor vetoed legislation unanimously supported in committee. Maybe these bills will get another look when the insurance industry starts putting pressure on legislators and governors; Harvard Pilgrim is making it harder to get reimbursed for compounded drugs.

Fortunately state action is not limited to passing new laws. Read this article in Politico, which discusses the aggressive activity of the Iowa pharmacy board reaching outside that state to inspect compounding pharmacies across the country. New Jersey's attorney general recently hired pharmaceutical experts to help in its investigation of the compounding industry, according to the Star Ledger.

The NCSL database is a useful, though somewhat out of date summary of state action (last updated April 15).

As NCSL points out, some of the issues addressed in the state bills include clarifying which compounded drug orders meet the state-regulated standard and which cross into a manufacturing regulatory category; updating definitions for compounding, wholesale, specialty and hospital-based pharmacies, and clear language about "sterile" and "non-sterile" compounding; inspection of facilities; enforcement responsibilities; funding; and transparency of records.

Link to this Newsletter

Generic Drugs & the Courts

Pay-to-Delay will Get Day in Court While Generic Manufacturers Shielded  The Supreme Court has a mixed record when it comes to pharmaceutical policy, and this year's opinions continue the trend.  On the one had, the Court has ruled in favor of consumers in FTC v. Actavis. For years, NLARx and its legislative members have been weighing in opposing pay-to-delay schemes. We have signed amicus briefs, written letters, and passed resolutions.  Finally, a Supreme Court decision will allow the Federal Trade Commission to challenge these deals in court on a case-be-case basis. While we would have preferred a flat-out decision that these deals aren't legal as against the pubic interest, the decision is a step in the right direction. Consumers, state governments and other purchasers or payors are expected to save. Read more here. Meanwhile in Europe, drugmakers are fined for these anti-competitive deals.    Note that these pay-to-delay deals are only one strategy drug manufacturers use to keep brand name drugs at the top of preferred drug lists and generics out of the hands of consumers. Other strategies contributing to the high cost of medicine include "evergreening" - patent extensions for minor changes in drug formulas; read more here.   While the Supreme Court's Actavis decision may benefit consumers seeking to purchase less expensive generic drugs, apparently its "buyer beware" when it comes to safety. Of particular concern to state legislators is the Supreme Court's decision in Mutual Pharmaceutical Co. v. Bartlett that FDA approval of a generic prescription drug preempts a state-law damages claim premised on the drug's design defect. Read more in Public Citizen's Consumer Law & Policy Blog and in Forbes.

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