This just in from Breast Cancer Action, a member of Prescription Access Litigation’s coalition of 130+ consumer advocacy organizations. The pricing of cancer drugs is one of the most troubling trends in the world of prescription drugs. This press release points out that the price today of these drugs is what’s important, not some arbitrary notion of “effective cost,” which seems more like an actuarial notion than a principle that should guide patients’ and doctors’ choices regarding medications.
FOR IMMEDIATE RELEASE
Mary DeLucco
mdelucco@bcaction.org
415-243-9301, ext. 16
Breast Cancer Action Says Two New Drug Pricing Studies Miss the Mark
San Francisco, CA (June 26, 2007) — Breast Cancer Action (BCA) today expressed grave concerns about two new studies that purport to justify the exorbitantly high price of breast cancer drugs.
One of the studies looked at Herceptin –a drug that costs upwards of $40,000 a year. The other study looked at Aromasin – an aromatase inhibitor that costs more than $3000 per year in the United States.
Both studies measured “cost effectiveness” in terms of the number of years each drug prolonged life, combined with the quality of life. This “cost effectiveness” measure was used to estimate the cost of the drugs over a patient’s lifetime. Based on this equation, researchers said the “effective” cost of the drugs was much less than the actual purchase price.
But BCA says that the “effective” cost is a meaningless concept to individual breast cancer patients, and points out that both studies were funded and — in the case of the Herceptin study partially staffed — by the companies that make the drugs.
“The bottom line is that Herceptin still costs at least $40,000 a year in the United States,” says BCA Executive Director Barbara A. Brenner. “The cost of these cancer drugs will not be reduced to reflect the ‘effective cost’ detailed in these studies. The ‘projected lifetime costs’ are meaningless to patients who have to pay for these drugs today.”
Brenner also points out that studies like these will prove most useful for pharmaceutical companies by encouraging insurance firms to pay the very high prices the drug companies are charging.
The fact that these drugs cost thousands of dollars is more evidence of the need for the United States to work toward a universal health care system that would allow the government to negotiate with pharmaceutical companies for lower drug prices.
Breast Cancer Action (www. bcaction.org) is a national grassroots education and advocacy organization that carries the voices of people affected by breast cancer to inspire and compel the changes necessary to end the breast cancer epidemic.
Since 1998, BCA has refused to accept funds from corporations that may create a real or apparent conflict of interest for BCA. Corporations covered by this policy include pharmaceutical companies.
Federal Judge Allows Zyprexa Class Action to Go Forward
Says Courts are “in the Strongest Position” to Protect Public from Fraudulent Drug Marketing
BROOKLYN, NY – A U.S. District Court judge today issued a decision allowing to go forward a class action lawsuit that alleged that Eli Lilly & Co. (NYSE: LLY) fraudulently marketed the atypical antipsychotic drug, Zyprexa, for uses not approved by the FDA. Judge Jack B. Weinstein, of the U.S. District Court, Eastern District of NY, denied Eli Lilly’s motion for summary judgment, as well as a summary judgment motion filed by the plaintiffs.
The 14-page order highlighted the importance of the Courts in protecting the public in the arena of prescription drugs. The Judge stated:
“Under the present organization of the pharmaceutical industry, the official federal Food and Drug Administration (FDA), and the plaintiffs’ bar, the courts are arguably in the strongest position to effectively enforce appropriate standards protecting the public from fraudulent merchandising of drugs.” (Opinion, pp. 3-4)
The lawsuit, brought by the New York-based Sergeants Benevolent Association Health and Welfare Fund and others, alleged that Eli Lilly illegally marketed Zyprexa for “off-label” purposes (i.e. for uses not approved by the FDA), as well as withholding information about Zyprexa’s safety and efficacy. Doctors may prescribe prescription drugs for “off-label” uses but drug companies are prohibited from marketing or promoting drugs for such uses. A 2006 study in the Archives of Internal Medicine found that more than 1 in 7 prescriptions for commonly-used drugs were for off-label uses that lacked scientific support. A study released in January 2007 by the federal Agency for Healthcare Quality and Research found that there was little scientific evidence to support the off-label use of Zyprexa and other atypical antipsychotics.
The plaintiffs in this case alleged that Lilly’s marketing allowed it to charge a higher price than the drug would have been able to command. Lilly sold $4.4 billion worth of Zyprexa in the U.S. in 2006. According to a MarketWatch article, “While U.S. sales of Zyprexa rose 19% in the fourth quarter 2006, Lilly attributed this jump largely to higher prices.” (“Lilly CEO: 2007 Zyprexa sales seen flat,” Val Brickates Kennedy, MarketWatch, Mar 14, 2007)
The Court further said in its opinion:
“Allowing this and like suits to proceed may or may not increase the cost of pharmaceuticals and the efficacy of medical treatment in this country. It does, however, furnish backstop protection against under-regulated potentially dangerous activity by a market where caveat emptor largely rules.” (Opinion, p. 12)
“This ruling underscores the important role that Courts play in protecting patients from illegal drug company tactics,” said Alex Sugerman-Brozan, director of Prescription Access Litigation, a national coalition of which the Sergeants Benevolent Association Health and Welfare Fund is a member. “Unfortunately, the FDA has been trying to slam the courthouse doors in the public’s face by arguing that consumers’ legal claims are ‘preempted’ by the FDA’s authority.”
“We are very excited about this success and are grateful to all those who worked diligently defending the interests of our members,” said Ed Mullins, President of the Sergeants Benevolent Association. “We will continue to pursue any action of wrongdoing that impacts on a NYPD Sergeant or their family.”
The case is part of In re Zyprexa Products Liability Litigation, 04-MD-01596, E.D.N.Y. The Judge’s ruling can be found here.
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About the Sergeants Benevolent Association
The Sergeants Benevolent Association (www.sbanyc.org) is comprised of approximately 10,000 active and retired sergeants of the New York City Police Department. An independent union, it acts as the collective bargaining unit for those officers during contract negotiations with the City of New York, and manages a variety of other projects – including health and welfare programs, political outreach efforts and community service initiatives – for the benefit of its members and their families. The breadth of the association’s activities is wide, but above all else, the SBA is an advocate for New York’s police sergeants, the officers who stand at the Frontline of our nation’s largest metropolitan police department.
About Prescription Access Litigation
Prescription Access Litigation (PAL) (www.prescriptionaccess.org) is a nationwide coalition of over 130 state, local, and national senior, labor and consumer health advocacy groups in 35 states and the District of Columbia fighting to make prescription drugs affordable. The organizations in the PAL coalition have a combined membership of over 13 million people. PAL works to end illegal drug industry practices that increase the price of prescription drugs beyond the reach of the American consumer, using class action litigation and public education. Since 2001, PAL members have filed 28 sets of lawsuits targeting such practices. News about PAL’s cases and public education efforts is published regularly on the PAL Blog at www.prescriptionaccess.org/blog
Back in February, PAL and Public Citizen filed an objection to a $63.8 Million class action settlement in Illinois state court in a case alleging that GlaxoSmithKline, the maker of Paxil, knew the drug was dangerous and ineffective when taken by children under the age of 18, but failed to inform parents and guardians of children who were prescribed it.
As a result of our objection, the parties agreed to make a number of important changes to the settlement. We felt these changes were beneficial and addressed most of our concerns, and so we withdrew our objection.
Now we are working to get the word out about this settlement, and to encourage parents and guardians who paid for any of the cost of Paxil prescribed to a child under 18 to submit a claim to receive a payment from this settlement.
If you (or anyone you know) has ever purchased Paxil or Paxil CR for a child or ward, you are entitled to recover 100% of your documented out-of-pocket expenses. Even if you didn’t keep receipts or other documentation of your Paxil purchases, you can still recover the amount you spent, up to $100. If you do have receipts or other documentation, you may be able to recover the entire amount that you spent.
You are a class member and eligible to submit a claim for payment if:
• You live in the United States
• You purchased Paxil or Paxil CR for someone under the age of 18
To receive compensation, you MUST submit a claim. If you do not submit a claim form by the deadline, August 31, 2007, you will forever lose your chance to receive a payment from this settlement.
To get full information about the settlement, including how to submit a claim, and a downloadable claim form, visit paxilpediatricsettlement.com Make sure to follow the claim form instructions carefully and attach copies of your receipts or records.
You can also call 1-866-494-8404 for more information.
PAL wants to ensure that all eligible class members are notified of the settlement. Please help us do so by adding a link on your own website or blog to this entry and to the settlement website, http://www.paxilpediatricsettlement.com/. Please also forward this information to relevant email lists, online forums, advocacy groups, support groups, and medical providers.
A major victory occurred today in the massive Average Wholesale Price lawsuit in the U.S. District Court for the District of Massachusetts. PAL’s press release on this is below. To learn more about this case, go here.
Federal Court Rules Against Three Drug Companies in Average Wholesale Price Case
Judge finds Astra Zeneca, Bristol-Myers Squibb and Warrick acted “Unfairly and Deceptively”
BOSTON, MA – Today, Prescription Access Litigation (PAL) and Hagens Berman Sobol Shapiro LLP announced a landmark victory in a prescription drug lawsuit brought by members of PAL and others. Judge Patti Saris, of the U.S. District Court for the District of Massachusetts, found that AstraZeneca (NYSE: AZN), Warrick (a subsidiary of Schering-Plough (NYSE: SGP)) and Bristol-Myers Squibb (NYSE: BMY) violated the Massachusetts consumer protection act, Chapter 93A, by reporting false “Average Wholesale Prices” for a number of prescription drugs, including physician-administered drugs for cancer.
The “Average Wholesale Price,” or AWP, is a benchmark figure reported by drug manufacturers to commercial publications that publish compendia and electronic databases of prescription drug prices. Health plans, government health programs such as Medicaid and other “third party payors” use these AWP figures to determine how much to pay doctors and pharmacies for drugs which are given to their members and insureds.
The lawsuit is part of a much larger case, In re Pharmaceutical Industry Average Wholesale Price Litigation. Dozens of defendants, including the largest drug companies in the U.S., are alleged to have reported inflated and inaccurate AWPs for drugs covered by Medicare Part B, in order to increase sales of their drugs. Until 2003, Medicare reimbursed doctors for these drugs using a formula based on the AWP. However, the amount it cost doctors to purchase these drugs was much lower than the amount Medicare reimbursed them. Doctors profited from the difference, known as the “spread.” The defendants in this suit are alleged to have “marketed the spread” by artificially inflating the AWP so as to increase the amount the doctor would keep as profits by purchasing that company’s drug as opposed to a competitor’s.
Medicare Part B pays 80% of the cost of drugs that are administered in a doctor’s office as well as a small number of self-administered drugs, such as asthma drugs used with a nebulizer. The remaining 20% is paid by individual Medicare recipients or by supplemental insurance, known as “Medigap” plans. Today’s ruling benefits health plans and consumers in Massachusetts who paid part or all of that 20%, as well as health plans that paid for these drugs for patients not enrolled in Medicare.
“Today’s decision rights a great wrong that was done by these three companies against some of our society’s sickest and most vulnerable patients,” said Alex Sugerman-Brozan, director of Prescription Access Litigation. “What could be more outrageous than taking advantage of cancer patients in the name of profits?” One of PAL’s coalition members, Pipefitters Local 537 Trust Fund, is a plaintiff in the case.
The Court found that the three defendants caused the publication of false and inflated Average Wholesale Prices for seven drugs:
• Astra Zeneca: Zoladex
• Bristol Myers Squibb: Taxol, Vepesid, Cytoxan, Blenoxane and Rubex
• Warrick: albuterol sulfate
“Prescription drugs are one of the fastest growing cost drivers in health care,” said John McDonough, Executive Director of Health Care For All, a Massachusetts advocacy group which is a member of the PAL coalition and a plaintiff in another part of the AWP case, “This decision puts drug companies on notice that they can’t get away with burdening the health care system by illegally and artificially increasing those costs.”
Although government programs (including Medicare Part B and Medicaid) are abandoning AWP, virtually all private health plans and insurers still use it. Today’s Court decision and a settlement in another lawsuit will help push these third party payors towards other benchmarks. In October 2006, a separate case brought by two PAL coalition members against First Databank, the main publisher of AWPs, was settled. In that settlement, First Databank agreed to roll back the AWP spreads on hundreds of drugs, and to stop publishing AWP data within two years of the settlement becoming final.
“This Court decision is yet another nail in the coffin of Average Wholesale Price,” said Sugerman-Brozan. “The day is long overdue for our health care system to pay for drugs based on real and accurate data, rather than on fictitious figures made up by drug companies that are more concerned about profits than patients.”
This summer, trials begin in another phase of this massive AWP litigation, with a trial set to begin in July against Bristol Myers Squibb on behalf of a nationwide class of individual Medicare beneficiaries. Steve Berman, lead attorney in the case and managing partner of Hagens Berman Sobol Shapiro LLP, said “We are looking forward to continuing the prosecution of this case against the remaining defendants who perpetrated similar if not identical wrongs against patients and insurers nationwide. We view this ruling as a big win that should serve notice to all defendants that they will be called to account for their wrongdoing.”
About PAL
Prescription Access Litigation (PAL) (www.prescriptionaccess.org) is a nationwide coalition of over 130 state, local, and national senior, labor and consumer health advocacy groups in 35 states and the District of Columbia fighting to make prescription drugs affordable. The organizations in the PAL coalition have a combined membership of over 13 million people. PAL works to end illegal drug industry practices that increase the price of prescription drugs beyond the reach of the American consumer, using class action litigation and public education. Since 2001, PAL members have filed 28 sets of lawsuits targeting such practices. News about PAL’s cases and public education efforts is published regularly on the PAL Blog at www.prescriptionaccess.org/blog
About Hagens Berman Sobol Shapiro LLP
The law firm of Hagens Berman Sobol Shapiro LLP is based in Seattle with offices in Chicago, Cambridge, Los Angeles, Phoenix and San Francisco. Since the firm’s founding in 1993, it has developed a nationally recognized practice in class-action and complex litigation. Among recent successes, HBSS has negotiated a pending $300 million settlement as lead counsel in the DRAM memory antitrust litigation; a $340 million recovery on behalf of Enron employees which is awaiting distribution; a $150 million settlement involving charges of illegally inflated charges for the drug Lupron, and served as co-counsel on the Visa/Mastercard litigation which resulted in a $3 billion settlement, the largest anti-trust settlement to date. HBSS also served as counsel in a $850 million settlement in the Washington Public Power Supply litigation and represented Washington and 12 other states in lawsuits against the tobacco industry that resulted in the largest settlement in the history of litigation. For a complete listing of HBSS cases, visit www.hbsslaw.com.
The House Subcommittee on Health passed legislation renewing the Prescription Drug User Fee Act (PDUFA) and other provisions with few amendments after staff meetings resolved concerns including language eliminating the FDA’s preemption authority. The bill now goes to the House Committee on Energy and Commerce for a markup June 21.
That language would have said:
“Nothing in this act or the amendments made by this act may be construed as having any legal effect on any cause of action for damages under the law of any state (including statutes, regulations, and common law.”
It would have clarified that the FDA’s approval of a drug does not preempt a lawsuit brought under state law alleging that a drug company injured a patient who took a drug, or failed to warn them about risks of the drug. This would reverse the FDA’s attempt to establish that its authority preempts such claims, which we addressed earlier this week in this blog (“‘The Hill’ gets it (partially) wrong on FDA & Preemption”). Henry Greenspan addressed this further in an excellent post over at TortDeform.com (“Preempting Preemption: Will Congress have the will to state its will?”)
The FDA and industry had taken great pains to characterize this provision as a change in the law, rather than what it was, a restatement and reestablishment of long-standing practice regarding the FDA and preemption: that state law claims are NOT preempted by the FDA’s approval of a drug (except in Michigan, which has the most draconian law in the country on this subject, denying even the most grievously injured patients the right to sue drug makers).
With the House version of the bill going before the full Energy and Commerce Committee now mirroring the Senate bill in saying nothing on this, the issue seems to be a dead letter.
I predict that before the ink is dry on this bill we will see drug companies arguing in such lawsuits that the Subcommittee’s removal of this language somehow demonstrates Congress’s intent to have the FDA preempt all state law claims on personal injury and failure to warn. Legislative intent, like beauty, is so often in the eye of the beholder. Can we say that a Subcommittee’s removal of a proposed particular clarifying provision means that the entire Congress intended that its passage of a bill express the exact OPPOSITE? (I.e. “since the bill didn’t say that the FDA doesn’t have preemptive authority, then the FDA does have such authority”) That seems like one heck of a stretch, but stay tuned — it will soon be appearing in a Motion to Dismiss near you.
“The Hill” today ran an article on June 15, titled “Trial lawyers’ win on suit provision threatens FDA bill.” The article discusses a provision added to several discussion drafts of an unidentified FDA bill (presumably Prescription Drug User Fee Act [PDUFA] reauthorization) before the House Energy & Commerce Committee. The provision would state:
“Nothing in this act or the amendments made by this act may be construed as having any legal effect on any cause of action for damages under the law of any state (including statutes, regulations, and common law)”
The overall thrust of the Hill article is that this is a change in the law and in current practice. In fact, whether state court lawsuits alleging that prescription drugs or medical devices are dangerous and defective are preempted by the Food Drug and Cosmetics Act (FDCA) is an issue on which courts are currently very divided. The pendulum has swung a bit towards preemption in the wake of the FDA’s issuing a preamble to its new rule on drug labelling in 2006. (see page 38 for the Preamble).
In a nutshell, the FDA declared its opinion that such state court lawsuits are preempted. The FDA has been making such arguments for several years, more or less since the Bush administration took office, mostly by intervening and filing briefs in individual state court lawsuits. This marked a change in FDA policy, and was apparently initiated by former FDA general counsel Daniel Troy, now a partner at Sidley Austin, a law firm that represents drug and device companies.
Public Citizen release an excellent analysis of why the FDA’s Preamble is wrong, both as a matter of law and as a matter of policy.
The Hill’s article momentarily appears to admit that this is not a change in the law, but a clarification:
“Democrats are not trying to roll back federal preemption, the committee spokeswoman said. “We are not attempting to change the status quo on preemption,” she said. Instead, the Democrats want to forestall the expansion of federal preemption into new areas of drug and device law.
But by attributing this to Democrats only, the article refuses to analyze whether in fact federal preemption is a recent change in how courts address these cases, or whether it is the norm which “the Democrats” and “trial lawyers” are now trying to change. It is true that there has been a greater trend towards courts finding preemption — but there has also been a countertrend of courts refusing to find such cases preempted. (e.g. Kelly v. Wyeth, and Perry v. Novartis)
And then the article goes on to say:
“The pharmaceutical and device makers contend that the change in the law could grant state courts the authority to override FDA decisions about the safety and efficacy of their products or about warnings on the products’ labels.” [emphasis added]
By characterizing this as a “change in the law,” rather than saying, for example “pharmaceutical and device makers contend that this is a change in the law,” the article seems to accept the premise that it is in fact a change in the law.
But, the semantics of the article aside, the ‘trend’ towards federal preemption comes amidst justifiable skepticism about whether the FDA is adequately protecting unsafe drugs. This concern has been renewed in recent weeks as the heart attack risks of the diabetes drug Avandia have come to light.
Some of the worst risks and dangers of prescription drugs only come to light years after the drug has been approved. The FDA has shown itself unwilling to do enough to take dangerous drugs off the market. Recall that Vioxx was withdrawn voluntarily by Merck, not because of any FDA order. With the FDA proving itself unwilling to even force drug companies to complete the post-approval studies that they often promise to do, can we rely on the FDA to police drugs once they are on the market?
It is this very question that has led to the numerous bills in Congress to strengthen the FDA’s ongoing oversight of drugs, such as by separating the functions and divisions within FDA that approve new drugs and that police drugs already on the market. But in the absence of adequate ongoing oversight by the FDA, lawsuits play a vital role — in bringing the dangerousness of drugs to light, in forcing manufacturers to revise the labelling of their drugs or even take them off the market, and in compensating people who’ve been injured by dangerous drugs. The FDA’s and the pharmaceutical industry’s arguments that the FDA preempts these cases amounts to a “do-nothing” system — the FDA won’t do anything, and the Courts can’t do anything.
Whenever the climate in Congress and the Administration shifts towards a refusal to regulate corporate behavior, states begin to step in to fill the gap and protect public health and safety. Preemption is being pushed by big business and its allies in Congress and the Administration to undermine these efforts, not just in prescription drugs and medical devices, but in food safety, banking and financial services, privacy and countless other arenas.
The case alleged that from 2002 to 2005, First Databank conspired with leading prescription drug wholesale provider, McKesson Corp., to arbitrarily increase by 5 percent the markups between what pharmacies pay wholesalers for prescription drugs (based on “Wholesale Acquisition Cost” or WAC) and what health plans and insurers reimburse pharmacies for those prescription drugs (based on “Average Wholesale Price,” or AWP). The suit alleges that McKesson used this “5% scheme” to provide a benefit to their large pharmaceutical retail chain clients, who would then earn an extra amount with each prescription, and that First Databank went along with the scheme to ease the burden of establishing accurate spreads and to curry favor with McKesson so that McKesson would use First Databank as the source of drug prices for its customers.
In October 2006, a settlement with First Databank was announced. Under the settlement, First Databank agreed to “roll back” the 5% increase on hundreds of drugs. The plaintiffs’ expert in the case estimated that this rollback would save $4 billion in drug spending in the first year. First Databank also agreed to stop publishing its “Average Wholesale Price” benchmark data within 2 years of the settlement becoming final. McKesson was not a party to the settlement, and the case against it is proceeding
As the Wall Street Journal reported earlier this week, the Judge recently gave tentative approval to an amended settlement and scheduled a date for the “Fairness Hearing” at which the Judge will evaluate the whether the settlement is “fair, reasonable and adequate” and whether it should be finally approved.
The Wall Street Journal article stated:
A federal judge has given preliminary approval to a proposed settlement that could roll back prices on thousands of prescription drugs in a case that could have implications for pharmacy operators.
The matter in U.S. District Court in Boston centers around lists of so-called average wholesale prices for brand-name drugs published by Hearst Corp. unit First Databank.
U.S. District Judge Patti B. Saris this week gave preliminary approval to the recently amended agreement between plaintiffs and First Databank, and scheduled a fairness hearing on a final settlement for Nov. 14.
The settlement could save consumers and insurers billions of dollars in drug costs while providing no monetary damages. First Databank would cut average wholesale prices for thousands of drugs by about 4% and eventually stop publishing the benchmark list.
Progress in the litigation “allows a key risk to the outlook for pharmacy operators to move along,” Morgan Stanley analyst David Veal wrote Friday.
Several retiree and worker funds alleged in the lawsuit against First Databank and major drug distributor McKesson Corp. that the two companies worked together to inflate the markup on numerous prescription drugs.
First Databank, denying wrongdoing, agreed to a settlement that requires it to pay no damages. McKesson denies wrongdoing and has been fighting the lawsuit; the plaintiffs and McKesson recently requested and received postponement of a court mediation conference.
Prescription Access Litigation’s parent organization, Community Catalyst, today announced “Consumer Voices for Coverage,” a major new initiative to support state health care advocacy in certain states. The program was launched today with a Call for Proposals, and will award grants of up to $750,000 over a three-year period. To learn more, visit voicesforcoverage.org
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Robert Wood Johnson Foundation & Community Catalyst Announce $12M Effort to Support Consumer Advocacy for Health Care Coverage
Jun 15, 2007 – Boston, Mass.
The Robert Wood Johnson Foundation and Community Catalyst announced the launch of a $12 million effort to strengthen state consumer health advocacy networks in selected states across the U.S. The national program, Consumer Voices for Coverage, will assist in building a single, integrated health care advocacy network in selected states. The call for proposals was released today.
The new program seeks to strengthen state consumer health advocacy networks through an infusion of new resources, policy support and technical assistance over a three-year period. The Consumer Voices for Coverage program will use a competitive application process and will award grants of up to $750,000 over a three-year period. These new funds will help build effective health care consumer advocacy and infrastructure as critical forces in the health care reform policy-making process.
“For ten years, Community Catalyst has worked to build stronger state health advocacy organizations and achieve improvements in health care policy,” said Susan T. Sherry, deputy director at Community Catalyst and director of Consumer Voices for Coverage. “We have seen the results of state consumer health advocacy in preserving and expanding coverage. This investment by the Robert Wood Johnson Foundation is both timely and strategic—it will bring state-based consumer advocates to a new level of effectiveness and national influence.”
The program builds on the findings of a report issued last fall by Community Catalyst with funding from the W.K. Kellogg Foundation.
“Community Catalyst’s report, Consumer Health Advocacy: A View From 16 States, highlighted the importance of consumer advocacy and identified the specific capacities required to build stronger advocacy,” said Risa Lavizzo-Mourey, M.D., M.B.A., president and CEO of the Robert Wood Johnson Foundation. “Health care coverage is a top priority for the Robert Wood Johnson Foundation, and we are committed to supporting the consumer voice for health care reform in this country. There is no better organization to lead this empowerment effort, and we are proud to be a partner with Community Catalyst as it enters its second decade of service to the health care community.”
“There is a new wave of reform coming from state health care advocates and policy-makers—Massachusetts, California, Vermont are all moving on sweeping coverage changes,” Sherry added. “Now is the time to strengthen the consumer voice.”
For details on the program and to view the call for proposals, visit www.voicesforcoverage.org.
About Community Catalyst
Community Catalyst is a national nonprofit advocacy organization working to build the consumer and community leadership that is required to transform the American health system, with the belief that this transformation will happen when consumers are fully engaged and have an organized voice. Community Catalyst has provided leadership and support to state and local consumer organizations, policy-makers, and foundations working to change the health care system so it serves everyone—especially vulnerable members of society since 1997. For more information, visit www.communitycatalyst.org.
About the Robert Wood Johnson Foundation
The Robert Wood Johnson Foundation focuses on the pressing health and health care issues facing our country. As the nation’s largest philanthropy devoted exclusively to improving the health and health care of all Americans, the Foundation works with a diverse group of organizations and individuals to identify solutions and achieve comprehensive, meaningful and timely change. For more than 35 years the Foundation has brought experience, commitment, and a rigorous, balanced approach to the problems that affect the health and health care of those it serves. When it comes to helping Americans lead healthier lives and get the care they need, the Foundation expects to make a difference in your lifetime.
The Attorneys General of 34 states and DC announced on Tuesday a $5.5 million settlement with Warner Chilcott. The settlement addresses the AGs’ claims that Warner paid Barr laboratories $20 Million to not bring a generic version of the contraceptive Ovcon to the market. Such settlements are called “reverse payment settlements” because they involve a brand-name drug company that is suing to block a generic from coming to market paying off the generic drug company defendant.
Some notable features of the settlement include:
Warner is prohibited from entering into any agreement that would limit the research, development, manufacture, or sale of a generic alternative to one of its drugs.
Warner Chilcott must provide the states notice of agreements it enter into with generic manufacturers. The Medicare Modernization Act instituted a requirement that drug companies provide copies of such agreements to the Federal Trade Commission, which the FTC uses to issue annual reports regarding such settlements. This settlement appears to extend this requirement to the AGs of these 34 states and DC.
While this settlement is a positive development, dealing with such collusive settlements case-by-case and drug-by-drug is inadequate. Congress must step in to ban these settlements, which undermine the system for hastening generic drugs to market that was created by the Hatch-Waxman Act. PAL and 20 other organizations recently urged the House Energy and Commerce Committee to report out a bill that would do just that, HR 1902, the “Protecting Consumer Access to Generic Drugs Act of 2007.”
Reverse payment settlements are just one of the obstacles to Americans being able to purchase cheaper and equally effective generic drugs. Others include:
So-called “Authorized Generics,” in which a brand-name drug company introduces a “fake generic” just as the first true generic comes onto the market. These fake generics undermine the first true generic’s 180 day “exclusivity” period, in which it gets to be the only generic on the market. This 180 days is built into the law so that generic companies are able to recoup the expenses they incur to bring a generic to market — expenses which are substantial, given the arsenal of tactics that brand-name drugmakers bring out to block access to cheaper generics.
Frivolous “citizen petitions” that brand-name drug makers file with the FDA, seeking only to delay the FDA’s approval of a generic drug’s application.
Bogus and duplicative patents filed by brand-name drug makers with the Patent & Trademark Office (PTO). Drug makers use such additional patents to extend their patent monopoly, and thus keep generics off the market longer.
Frivolous patent infringement lawsuits, in which brand-name drug companies sue generic drug makers even though they know they will not prevail. Brand-name drug companies get an automatic 30-month extension on their patent if they file such lawsuits, regardless of whether their patent is valid. An extra 30 months can be worth billions, so the incentive to file such lawsuits is nearly impossible to resist. There is perhaps no greater return on investment (ROI) in the pharmaceutical marketplace — a few million spent on a patent lawsuit can translate into billions in additional sales.
A backlog of over 800 generic drug applications at the FDA. The FDA’s Office of Generic Drugs needs adequate funds to hire enough reviewers to process these applications and eliminate the backlog.
Each of these obstacles cries for legislative and regulatory changes. But, given the Senate’s unwillingness to include in the reauthorization of the Prescription Drug User Fee Act (PDUFA) any significant challenge to Big Pharma’s stranglehold over the FDA, such changes don’t seem forthcoming any time soon.
One of last year’s Bitter Pill Awards honorees, Lunesta, has the dubious distinction of having the most recalled and most remembered drug ads on TV, according to IAG Research.
The ubiquitous “Luna Moth” ads have become the archetype of current drug ads, lulling the critical faculties of viewers into a slumber, and making even the deepest sleeper wonder if they should Ask Their Doctor about Lunesta.
Lunesta’s sales growth has been hampered by Ambien going generic (reports of sleep-eating, sleep-walking, and sleep-driving notwithstanding) and by competition from the latest entry into the prescription sleep drug market, Rozerem. So what does the forward-thinking company do in the face of lagging sales? Why, raise the price, of course! Yes, Ed Silverman at Pharmalot reports that Sepracor has raised the price of Lunesta 9%, on top of an earlier 9% price hike in November.
DTC television advertising that identifies a product by name should clearly state the health conditions for which the medicine is approved and the major risks associated with the medicine being advertised.
Sepracor continues to run so-called “reminder ads” for Lunesta, those brief spots which say the name of the drug but nothing else about it. Such ads are designed to increase name recognition, much in the same way that lawn signs and bumper stickers do for electoral candidates. Since they don’t say anything about what the drug is used for, under FDA regulations, they aren’t required to list the major side effects and other information we see in full drug ads.
What has PhRMA done about such violations, which they have been repeatedly informed of? N o one knows, since their report on the first year of the Guiding Principles and “comments” they received from consumers named no names and was widely considered to be a whitewash.
(Speaking of Ambien’s now-famous side effects: As is the case so often on matters of importance, perhaps the most thoughtful commentary on sleep drugs and their risks is, of course, from the Simpsons:)
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