Tag Archives: pharmaceutical

Pharma Transparency Bill Wains in California as Price-Gouging Discussion Gains Momentum Nationally

On August 17, California lawmakers killed a drug price transparency bill, putting to rest a policy that would have major implications on the pharmaceutical industry in the United States’ most populous state. The bill, which was first introduced by State Senator Ed Hernandez (D-West Covina) in February 2016, sought to require drug makers to report and explain any price pharmaceutical increase of ten percent within any given twelve-month period, as well as justify any drug price of at least $10,000 within thirty days of moving to that amount and require insurers to disclose how much money they spent on drugs. While the bill received far-reaching support from healthcare providers, insurers, patient advocacy groups, labor groups, and business groups alike, it was met with fervent opposition by pharmaceutical companies.

According to the Los Angeles Times and lobbying activity filings, Hernandez’s legislation was one of the most lobbied bills of current the session, with at least seventy groups spending  money to advocate for or against it. “It’s probably amongst one of the more heavily lobbied bills — similar to tobacco and the most controversial bills,” the measure’s author, Senator Hernandez, told The Times.  However, by August 17, after four amendments, Hernandez pulled the plug on it entirely, stating that the amendments made it difficult to accomplish the bill’s intention, which would have “shed[] light on the reasons precipitating skyrocketing drug prices.”

The demise of this legislation is another huge win for Big Pharma lobbyist PhRMA, which in October 2015 won a summary judgment ruling in the United States District Court for the District of Columbia, blocking certain hospitals from receiving discounts for pricey orphan drugs. It also comes at a time when pharmaceutical companies, biotech firms, and orphan-drug makers have come under high scrutiny for price gouging, including the 5,455% price increase of HIV and Malaria-treatment medication, Daraprim, from $13.50 to $750 per pill in September 2015. Earlier this month, the uptick of the price of the allergic reaction-treating EpiPen Auto-injector medical device – from $57 to $600 between 2007 and 2016 – as its maker anticipates the arrival of a generic competitor, though, its non-generic, brand name competitor Auvi-Q was recalled in 2015 over dosage concerns.

A proponent for changes to Big Pharma since the 1990s, United States Senate Bernie Sanders (I – VT) made “out of control” prescription drug pricing a key issue during his 2016 presidential campaign. After winning the Democratic nomination, Presidential hopeful Hillary Clinton has carried the torch, speaking out on drastic price increases, sending stocks for EpiPen-maker, Mylan, tumbling.

With little being done by the United States Congress on the issue of drug price transparency, fourteen state legislatures have introduced measures to reign in prices. As of 2016, only Vermont has been successful in passing a bill, while others stall or fail outright, as is the case in California.

The pricing war in California now marches to the ballot in November. Citizens will vote on an initiative that would prohibit state agencies, like Medical (the state’s version of Medicaid) and Medicare from being charged any more for drugs than the United States Department of Veterans’ Affairs.

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Pharmaceutical Company Preemptively Files Free Speech Suit Against The FDA

By: Nawa Arsala

Free speech is fundamental to the fabric of the United States. Americans fight for it zealously, regardless of the context, from political contributions to cartoon drawing contests. This battle has extended to the pharmaceutical industry. In an unconventional move, a small, Dublin-based pharmaceutical company, Amarin, filed suit against the Food & Drug Administration arguing that it has a constitutional right to share certain information about its product with doctors for unapproved uses.

The FDA approved Amarin’s drug Vascepa in 2012. It is a prescription form of fish oil that is used along with a low-fat and low-cholesterol diet, to lower high levels of triglycerides (fats) in adults, which is linked to heart disease. After the drug’s approval, Amarin requested permission to give doctors information regarding a study that showed Vascepa can reduce the triglyceride levels in less-severely affected patients, not just high-risk patients. The FDA ultimately rejected their request. Amarin’s issue is that many doctors already prescribe Vascepa to patients who do not have abnormally high triglyceride levels. The discretion of the physician to prescribe for an off-label use is perfectly legal and has been deemed the practice of medicine, which the FDA does not have jurisdiction to regulate. Manufacturers on the other hand, cannot promote for off-label uses.

Amarin wants to send doctors clinical trial data they described as “supportive but not conclusive research” that their drug could reduce the risk of heart disease in patients with less severe conditions than were initially approved for. The FDA denied Amarin’s request to share this information with doctors, and Amarin filed their suit. The FDA found that the “hypothesis that a triglyceride-lowering drug significantly reduces the risk for cardiovascular events among” individuals with less severe symptoms, failed to be proven in clinical trials. Nonetheless, Amarin feels its First Amendment right is being infringed upon by not being able to share this use with doctors. Amarin has not been accused of wrong-doing by the FDA yet, but they are possibly the first pharmaceutical company to sue the FDA preemptively. This could be because dietary supplement forms of fish oil are legally permitted to make the same statement without such rigorous regulation by the FDA. However, there seems to be increased regulation of dietary supplements as well after several injuries have been reported using weight loss supplements.

In a private letter to physicians who are paid to speak on behalf of its company, Amarin writes, “if we receive a judgement in our favor, we will move rapidly to deliver to you additional Company-approved training and updated promotional speaker materials related to the court’s interpretation of free speech related to the ANCHOR results.” In reality, free speech is not as romantic as the founding fathers would have hoped, especially in closely regulated markets such as the pharmaceutical industry. Courts consider several factors in determine if the government is infringing on First Amendment rights including, whether a substantial governmental interest being asserted, whether the regulation directly advances that interest and whether it is not more extensive than necessary.

Amarin may look to a fairly recent case in which a pharmaceutical sales representative’s conviction was overturned because the information he shared was not false or misleading. As a matter of fact, Amarin’s attorney ascertains precisely that, that the clinical trial data is truthful and not misleading. The U.S. Department of Justice and State attorney generals have increasingly used the Federal False Claims Act as an enforcement mechanism against health care fraud. The government believes that by promoting off-label uses, the manufacturers caused pharmacies to falsely claim Medicaid payment for drugs in ways unapproved by the FDA. Amarin is at risk for violating the FCA if they proceed in sharing the data directly to the doctors.

Drugs have and continue to save countless lives. The FDA has the duty, through a rigorous preapproval process, to ensure drugs are safe and effective before they are on the market. However, it is the stance of Amarin, that since off-label usage is already so commonplace by physicians and legal, providing more information, rather than less, is safest for the patient to promote overall health and more informed decision-making by physicians.

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Rising Pharmaceutical Costs Hit the Generic Market

In 1984, the 98th Congress passed the Drug Competition and Patent Term Restoration Act, better known as the Hatch-Waxman Amendment, creating a statutory scheme wherein generic drug manufacturers will be able to put their products into the market using the pioneer (or branded) drug’s scientific safety and efficacy data. In return, the pioneer manufacturer is awarded five-years of market exclusivity before the generic may enter the market. Congress intended to allow the pioneers to recoup their capital spent on research and development as well as turn a profit, but then have prices decrease dramatically as generics enter the market. It worked as intended! The generic drug industry has been booming since its inception.

However, in recent years, drug prices have been increasing and increasing quickly. In 2013, Tetracycline, an extremely common generic antibiotic that most all of us have likely taken throughout our lives, cost only five cents per pill. In 2014, the very same antibiotic cost $8.59 per pill. This increase constitutes a 17,714 percent jump in just one year! The drastic jump in prices stands in the face of Congress’s intention with the Hatch-Waxman Amendment, but can the increase be explained by the market?

In the cases of Tetracycline, the price jump resulted from a drug shortage. Generic companies lacked the necessary raw materials to produce the drug in significant quantities. The shortage of Tetracycline continued for nearly two years. However, the Food and Drug Administration (FDA) announced that the producers now have adequate materials to produce the drug. There were also manufacturing issues associated with the shortage that have also been fixed.

The larger issue may be the market itself. When an all-star branded drug is on the market, the generic manufacturers line up to enter the market. When four or five generics enter the market, the prices drop significantly. However, without several generics of a single drug on the market, prices do not drop as dramatically. Supplies can drop for any number of reasons. Companies may simply leave the market. An FDA-inspection may lead to a temporary shutdown of a plant. Regardless, less competition means higher prices and, for the consumer, tough choices when it comes to medical care. For example, only three companies currently produce digoxin, a cheap and easy to make cardiac drug that has been around since at least 1785. At the beginning of the year, a month of digoxin cost approximately $50 (one consumer reported $1.15 for a three-month supply), but now customers are seeing prices nearing $1000 per month. Notably, the World Health Organization lists digoxin as an “essential medicine.”

Some voices, however, have expressed concerns about nefarious business practices. In 2013, the Supreme Court ruled that the Government and private parties may sue pioneer companies who pay competitors to stay off the market. The practice has caught the attention of the Federal Trade Commission (FTC) and state officials. An antitrust investigation of Lannett by the state of Connecticut found that the manufacturer had not violated any law or regulation. However, many of these price adjustments happen naturally, leaving the FTC without any options to combat the problem.

The problem has caught the attention of Congress, who requested explanation for drug price increases fourteen drug manufacturers (constituting ten of the nearly 12,000 generic drugs on the market). However, without any legal mechanism to act against the companies, Congress may have few options to deal with the issue. Sen. Bernie Sanders and Rep. Elijah Cummings have proposed a bill to require generic manufacturers to rebate Medicaid if drug costs increase faster than inflation. The CEO of Generic Pharmaceutical Association believes the legislation to be “misguided.” Whether the bill passes or not, it appears to do little to help consumers attain better access to their needed medication. Until action is taken or anticompetitive practices can be definitely proven, more and more patients will have to decide whether they can afford their medication this month.

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