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.
Link to Story
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.

Link to Story

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.

 

Link to Newsletter

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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Psychotropic Drugs and Children

Interest remains high on the issue of over-prescribing psychotropic drugs to kids. The National Conference of State Legislatures recently released the useful Child Welfare Legislation Update: Oversight and Management of Psychotropic Medications for Children and Youth in Foster Care (January 2013), which reports on the status of state guidelines through 2012 and provides links to useful resources.

Those interested in this issue may want to review the reports commissioned by the District of Columbia collecting and analyzing data of payments to doctors in the District. A study released in July,
"Impacts of Pharmaceutical Marketing on Healthcare Services in the District of Columbia,Focus on Use of Antipsychotics in Children" showed that drug companies making antipsychotic drugs gave a disproportionate amount of gifts and payments to District psychiatrists who treat Medicaid patients. Close ties between the drug companies and psychiatrists might have led to inappropriate prescribing for Medicaid patients, and particularly for children, according to D.C. Council Member David Catania, a longtime NLARx board member, who held a hearing on the issue in November. The District recently released its 2013 report on drug marketing costs which found $83.7 million on spending for payments to doctors overall.

In 2013, at least three states have pending legislation relating to prescribing these drugs to children:

• Texas, where HB 473 requiring pre-approval to prescribe psychotropic drugs to young children has been voted favorably out of committee; watch the committee hearing here (at the 28 minute mark) and read the Grits for Breakfast Blog here, quoting testimony that "About 49,000 prescriptions for antipsychotic and neuroleptic drugs are currently given to children under five years old through the Texas Medicaid program, many of whom are in foster care..."
• New Mexico, where Senate Joint Memorial 44 seeks investigation of the "deleterious effects of overmedication of children in the state."
• Maine, where LD 716 directs the Department of Health and Human Services to adopt a program regarding prescription medications for children that consists of a prescription medication protocol, monitoring and prior authorization for reimbursement under the state Medicaid program.

Pharmacy Benefit Managers Scrutinized

Every year, more states regulate PBMs. Even Maine, which repealed a sweeping PBM law in a party-line vote in 2011, continues to address concerns that PBMs can be unfair and coercive, see LD 44, recently reported out of committee unanimously in amended form. Other states enacting or considering PBM legislation, in addition to the Maryland specialty drug bill discussed above, include Oklahoma, Oregon, North Dakota, California, and New York. The New York bill is particularly of interest because it establishes a fiduciary duty on the part of the PBM, which was a central component of the repealed Maine law. Though challenged by the PBM industry in the courts, the fiduciary responsibility established in Maine law was upheld by the federal courts with the US Supreme Court refusing review.

Out-of-Control Specialty and Oral Cancer Drugs Get Legislators' Attention

Here's a report everyone should read: "Clear Evidence Of US Specialty Drug Price Collusion Ignored For Years," a study of specialty drug prices and PBMs. State legislators have focussed on specialty drug issues in several ways. Maryland House bill 736

requires the State Board of Pharmacy to specify the prescription drugs that may be considered specialty drugs by a PBM, which would be prohibited from requiring a specialty drug to be dispensed by mail order and must instead allow any licensed pharmacy or pharmacist to fill a prescription for a specialty drug if the pharmacy or pharmacist meets specified requirements.

More typical are bills to require insurance coverage of oral cancer drugs. Legislatures in 19 states and the District of Columbia enacted such "parity" laws in 2012, and this trend has continued in 2013. Massachusetts recently enacted this legislation, SB 2363, signed into law by Governor Patrick over the objections of business groups concerned about treatment costs of as much as $115,000 per patient per year. LD 627, still in committee in Maine, is typical of bills being introduced across the country.

States Address Compounding Pharmacies

The National Conference of State Legislatures has put together a handy summary of state action on compounding pharmacies in 2013, as well as a compendium of existing laws and other resources on the issue. According to NCSL, as of March 10, 2013 there have been 16 bills related to the regulation of compounding pharmaceuticals proposed in 11 states.

Virginia's legislation and Utah's legislation has passed through committee and been sent to their respective Governors. House Bill 3161 and senate bill 183 are similar and pending in South Carolina; you can research S. Carolina bill status here. Bills are also pending in California, and the Massachusetts House and Senate. Three bills are pending in Minnesota, and House and Senate bills are in committee in New Jersey. The New Hampshire bill has been reported positively out of committee in amended form, and the Oklahoma bill has passed the House and been sent to the Senate. Maine's legislation will be printed next week. Mississippi's legislation died in committee and Hawaii's legislation may also not be enacted according to this database.

Compounding pharmacies, unfortunately, continue to be in the news; last week the FDA warned of another recall, this time of Avastin compounded by a Georgia pharmacy, reported here.

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.

For more information:

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

www.reducedrugprices.org

Featured Book: Pharmageddon

In the December issue of Health Affairs, the leading US policy journal, Don Light reviews the new book by David Healy, Pharmageddon.

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As a practicing psychiatrist and leading authority on pharmaceutical policy, Healy has published several books on how the dependency of researchers, regulators, and physicians on pharmaceutical funding has distorted diagnosis, drug development and treatment. (See for example The Antidepressant Era. Harvard University Press, 1997)

Light considers Healy's book as "the most powerful and deeply thought of a new crop of books on pharmaceuticals and medicine." For example, Healy describes how pharmaceutical companies co-opted randomized clinical trials that promised to make drug development more scientific. His account of how Abbott transformed the rare condition of manic depression (MD) into "bipolar disorder" that is alleged to affect 5,000 times more people per million is worth the price of admission. He gives specific examples of how companies have hidden harmful side effects from view. He shows how the FDA's decision to make many more drugs "by prescription only" has distorted the physician's role and turned most physicians into marketing agents. Good researchers and clinicians end up doing bad things to patients. READ MORE

More on Compounding Pharmacies

Obviously there is a lot going on in response to the 39 deaths and over 600 cases of meningitis and other injuries caused by contaminated compounded drugs sold by a Massachusetts pharmacy. The FDA has acknowledged its regulations are inadequate and a recent report issued by Massachusetts Congressman Ed Markey outlines initial concerns with both state and federal oversight. The FDA recently held a daylong meeting with state regulators to discuss the role of states and the federal government going forward. 

At the state level, the Council of State Governments (CSG) plans a webinar for this Thursday, January 3 titled "The Meningitis Outbreak and the Regulation of Compounding Companies: Federal and State Roles." The National Conference of State Legislators (NCSL) has compiled a database of state laws and regulations, as well as an initial report on actions under way in some states. The International Academy of Compounding Pharmacists (IACP) has its own recommendations for state regulatory action.

There is no question that state legislators, as well as pharmacy boards and public health agencies will be looking hard at compounding pharmacy regulations and the role of their states in assuring patient safety, and we will be reporting on their actions in the weeks and months ahead.

Outrage of the Year:

Questcor Finds Profits, at $28,000 a Vial
NY Times, December 30, 2012
Read the article

Thanks to Andy Pollack of the NY Times for continuing to shine a light on some of the most outrageous practices of the pharmaceutical industry, aided and abetted by backwards R&D incentives, patient-harming patent policies and industry gaming of marketing rules.

The sad thing is, instead of a major effort to change these incentives and policies, we see the federal courts enshrining and protecting commercial free speech to such an extent that it threatens public health and safety by weakening rules preventing off-label marketing, and we see our international trade negotiators extending the reach of flawed intellectual property and drug pricing policies so that in the future, Big Pharma won't even have to go to the courts to keep a lock on outrageously high prices - they will just take their case to an international arbitration panel as is being done right now by Lilly in a case brought under NAFTA.  State legislators do what they can but are often knocked back by legal decisions that limit their policy actions.

Indeed, the current strategy of the industry, abetted by corporate-funded policy outfits such as ALEC and the Heartland Institute, is to go after states with the temerity to regulate, say, personal and prescriber privacy in datamining, by seeking huge payouts in attorneys fees, with those judgments then used to personally attack legislators and AGs who champion such initiatives. That's what happened in Vermont and Maine this past election season, and these actions send a clear and chilling message to state policymakers: watch out, or Big Pharma will take you down. While neither Vermont AG Bill Sorrell nor Maine Representative Sharon Treat lost their elections in this case, surely legislators will be increasingly reluctant to address emerging public policy issues with this recent history as guidance.  Big Pharma already has a huge role in funding election campaigns, and all that campaign cash clearly has an effect both in Washington and at the state level in limiting the zeal with which legislators tackle issues the industry would rather remain unaddressed.

From the Director:

Best wishes to everyone for good things in the New Year, 2013. We are looking forward to newly elected state legislatures in most of the country starting this week. While many issues stay the same from year to year, we also expect action, or at least legislation to be introduced, in some new prescription drug policy areas. I recently surveyed legislators to find out their priorities, and while I am still receiving feedback, it looks like regulation of compounding pharmacies is first on many legislators' to-do lists. Send your feedback to info@reducedrugprices.org

Another issue legislators will definitely continue to tackle is opiate addiction prevent strategies, including the emerging issue of the release of patent restrictions on Oxycontin and Opana, such that new, cheaper, generic versions will not be required to also incorporate the ant-diversion technology the brand manufacturers implemented.

Expect legislators to continue to address concerns about over-prescribing of psychiatric drugs to children, and the sometimes related problem of conflicts of interest caused when medical doctors, some in positions of authority implementing state pharmaceutical policy, are also on industry payrolls.

Other hot-button issues are likely to include how the prescription drug provisions are implemented in the Affordable Care Act, as determined by essential benefits and mental health parity decisions, and the intersection of electronic medical records with privacy concerns. At least one state will be addressing legislation to allow state employees and private sector businesses to purchase prescription drugs from Canada and other countries.

Prescription drug prices and overall pharmaceutical costs continue to motivate many state legislators to take action. In one day right before Christmas, 20 legislators signed a national letter we circulated calling on President Obama and Congress to achieve fiscal cliff savings by negotiating drug prices, not cutting health care. Read the letter.

Legislators seem to be fighting a losing battle in their efforts to reduce drug prices and tackle some of the most important pharmaceutical policy issues directly impacting the health and safety of their constituents. For our editorial on this, read our Outrage of the Year commentary in our newsletter.

In any event, over the next year you can count on us to provide you with the latest information on what state legislators are working on in the 2013 legislative session related to pharmaceutical policy. For the most up-to-date news, be sure to follow us on Twitter (@nlarx) and Facebook.  We also regularly post news stories and links to reports and testimony on our website you can also sign up for our newsletter.