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