Gold9472
01-30-2006, 08:14 PM
Pharmaceutical industry protects flanks as U.S. states close in
http://www.iht.com/articles/2006/01/30/business/drug.php
By Stephanie Saul The New York Times
MONDAY, JANUARY 30, 2006
CHARLESTON, West Virginia Call it the Tin Cup scandal.
The pairings at a charity golf tournament last August created a flap when a drug industry lobbyist was teamed with Scott Brown, the drug czar who had been recently appointed by West Virginia's governor to rein in the state's pharmaceutical costs.
"It raised eyebrows," recalled Dan Foster, a state senator and medical doctor who also played in the Tin Cup Challenge, a fund-raiser for the Special Olympics. Brown, he said, "was riding in the same cart with the chief pharmaceutical lobbyist."
Brown said later that he did not know he would be teamed with Philip Reale, the pharmaceutical industry lobbyist, until just before they teed off. But industry critics saw the episode as simply another example of the drug industry, which has more than two dozen lobbyists registered in West Virginia, flaunting its clout.
In the end, it was more a tempest in a Tin Cup than a West Virginia version of the Jack Abramoff lobbying affair. Yet it illustrates how the pharmaceutical industry, long known as the richest lobbying force in Washington and for its success so far in staving off federal drug price controls, also protects its flanks - all 50 of them. Even with a bright line dividing red and blue states, controlling drug costs is a subject with nearly universal popular appeal, which is a reason the industry must watch states closely.
Five years after Maine adopted the first state drug price regulations, which force drug makers to provide discounts to the uninsured, legislators in all 50 states have been active on the pharmaceutical front.
Around that country last year, state legislatures considered more than 600 proposals involving pharmaceuticals, and 43 states passed bills, according to the National Conference of State Legislatures.
Many drug industry issues are on legislative agendas again this year.
And on Friday in New York, a group of lawmakers from New York, West Virginia, eight other states and the District of Columbia plan to meet to discuss their plans for pursuing drug price controls.
Some of those 600 proposals around the country last year were pro-industry, including efforts to protect manufacturers from product liability claims and expand access to brand-name drugs. But the states also tread on territory that, in other eras, had been considered federal turf, like measures to regulate the drug industry through cost-cutting, place limits on advertising and require that the results of clinical trial be disclosed.
The drug industry has been successful in defeating many of the toughest state measures. Its best-publicized victory came after it spent $80 million to help defeat California's Proposition 79, which was modeled after Maine's plan. Instead, drug money helped pass the industry's own smaller discount program.
Despite the industry's successes, several states have passed laws that represent a barely perceptible shift toward state regulation resembling rate-setting for a public utility, in which the needs of users are balanced against the supplier's right to a fair return.
It is a trend that triggers fear and loathing among drug makers. W.J. "Billy" Tauzin, the former Republican Louisiana congressman who runs the industry trade group, the Pharmaceutical Research and Manufacturers of America, lambastes price control every chance he gets. In the industry's view, such control stifles the kind of innovation needed to develop life-saving drugs.
"We're going to continue to aggressively try to defeat what we consider bad legislation," said Ken Johnson, senior vice president of the trade group, which is known as PhRMA, pronounced FARM-ah. "Clearly price controls would kill research and development and ultimately be damaging to patients."
Some local lawmakers, like a District of Columbia councilman, David Catania, describe laws to control pharmaceutical costs as part of a grass-roots movement that will spread and eventually force national price controls. Catania is one of those who will take part in the multistate meeting this week in New York of a new group that calls itself the National Legislative Association on Prescription Drug Pricing.
"What we're doing is chipping away at the privilege that the pharmaceutical industry has, day by day," Catania said. He complains that District of Columbia residents, despite neighborhoods of poverty where he said health conditions mirrored those found in Haiti, pay the fourth or fifth highest drugs costs in the country.
PhRMA recently sued to block a price control law adopted by the District of Columbia council. A federal judge ruled last month in the drug organization's favor.
PhRMA will not disclose how much it is spending to influence state legislation, and Johnson denies that the industry employs an army of lobbyists. But given signs of the group's expansion, it is likely that its state advocacy budget has expanded since 2003, when The New York Times disclosed it was $48.7 million.
PhRMA has recently opened two new regional offices, in Indianapolis and Baton Rouge, Louisiana, adding to a number of existing offices and a field office in Washington, separate from its national headquarters. Johnson likens the field offices to World War II listening posts.
"If you have just one office in Washington, D.C., you're so insulated from what's happening in the heartland of America," according to Johnson, who says the regional offices help the industry understand issues at the state and local level.
"We have ongoing efforts in all 50 states," Johnson said, adding that, at times, some states require extra attention.
Among them, Johnson said, has been West Virginia.
In West Virginia alone, nine lobbyists have registered on behalf of PhRMA, while individual pharmaceutical companies employ 24 lobbyists in the state, according to state records. Johnson said that four of the registered PhRMA lobbyists are local people under retainer and the others are PhRMA employees who visit the state only occasionally.
In many other ways, West Virginia, where mountain vistas display a hinterland unmarred by development, seems stuck in a simpler time.
But those same lawmakers have decreed that the state, where a relatively old, poor and sick population means high health-care spending, will be on the vanguard in at least one area: controlling prescription drug costs. It is the reason the pharmaceutical industry lobby is pushing so hard here.
The House of Delegates speaker, Robert Kiss, who sponsored the 2004 legislation that set up a state Pharmaceutical Cost Management Council, said that a "revolution" was necessary to control rising pharmaceutical costs to state residents.
Joe Manchin, the governor, appointed Brown, a pharmacist, last year to the post of pharmaceutical advocate, which functions essentially as an executive director for the council.
Brown, who resigned in November, said the criticism he got for that round of golf had no effect on his decision to leave only 10 months after taking the job. He said he was simply more comfortable at a pharmacist's bench than in the political arena.
But Brown was also criticized for the council's slow pace under his leadership.
The 11-member council, made up of the heads of six state departments and five appointed public members, must accomplish whatever it will before the sunset provision that will put it out of business in 2008.
And some members of the council have complained that the pharmaceutical industry - in contrast to its splashy advertising campaign in California and its tough litigation strategy in Washington - is trying to kill cost regulation in West Virginia via slow death.
"They've been successful in slowing down the process," said Foster, who does not serve on the panel but frequently attends its meetings.
On a recent Friday afternoon, as the council discussed the soporific details of federal drug pricing and briefly considered a proposal that import cheaper drugs from Canada, the room was lined with industry lobbyists.
Some were home-grown, others had flown in from out of town, but all were intent on the discussion's every nuance.
http://www.iht.com/articles/2006/01/30/business/drug.php
By Stephanie Saul The New York Times
MONDAY, JANUARY 30, 2006
CHARLESTON, West Virginia Call it the Tin Cup scandal.
The pairings at a charity golf tournament last August created a flap when a drug industry lobbyist was teamed with Scott Brown, the drug czar who had been recently appointed by West Virginia's governor to rein in the state's pharmaceutical costs.
"It raised eyebrows," recalled Dan Foster, a state senator and medical doctor who also played in the Tin Cup Challenge, a fund-raiser for the Special Olympics. Brown, he said, "was riding in the same cart with the chief pharmaceutical lobbyist."
Brown said later that he did not know he would be teamed with Philip Reale, the pharmaceutical industry lobbyist, until just before they teed off. But industry critics saw the episode as simply another example of the drug industry, which has more than two dozen lobbyists registered in West Virginia, flaunting its clout.
In the end, it was more a tempest in a Tin Cup than a West Virginia version of the Jack Abramoff lobbying affair. Yet it illustrates how the pharmaceutical industry, long known as the richest lobbying force in Washington and for its success so far in staving off federal drug price controls, also protects its flanks - all 50 of them. Even with a bright line dividing red and blue states, controlling drug costs is a subject with nearly universal popular appeal, which is a reason the industry must watch states closely.
Five years after Maine adopted the first state drug price regulations, which force drug makers to provide discounts to the uninsured, legislators in all 50 states have been active on the pharmaceutical front.
Around that country last year, state legislatures considered more than 600 proposals involving pharmaceuticals, and 43 states passed bills, according to the National Conference of State Legislatures.
Many drug industry issues are on legislative agendas again this year.
And on Friday in New York, a group of lawmakers from New York, West Virginia, eight other states and the District of Columbia plan to meet to discuss their plans for pursuing drug price controls.
Some of those 600 proposals around the country last year were pro-industry, including efforts to protect manufacturers from product liability claims and expand access to brand-name drugs. But the states also tread on territory that, in other eras, had been considered federal turf, like measures to regulate the drug industry through cost-cutting, place limits on advertising and require that the results of clinical trial be disclosed.
The drug industry has been successful in defeating many of the toughest state measures. Its best-publicized victory came after it spent $80 million to help defeat California's Proposition 79, which was modeled after Maine's plan. Instead, drug money helped pass the industry's own smaller discount program.
Despite the industry's successes, several states have passed laws that represent a barely perceptible shift toward state regulation resembling rate-setting for a public utility, in which the needs of users are balanced against the supplier's right to a fair return.
It is a trend that triggers fear and loathing among drug makers. W.J. "Billy" Tauzin, the former Republican Louisiana congressman who runs the industry trade group, the Pharmaceutical Research and Manufacturers of America, lambastes price control every chance he gets. In the industry's view, such control stifles the kind of innovation needed to develop life-saving drugs.
"We're going to continue to aggressively try to defeat what we consider bad legislation," said Ken Johnson, senior vice president of the trade group, which is known as PhRMA, pronounced FARM-ah. "Clearly price controls would kill research and development and ultimately be damaging to patients."
Some local lawmakers, like a District of Columbia councilman, David Catania, describe laws to control pharmaceutical costs as part of a grass-roots movement that will spread and eventually force national price controls. Catania is one of those who will take part in the multistate meeting this week in New York of a new group that calls itself the National Legislative Association on Prescription Drug Pricing.
"What we're doing is chipping away at the privilege that the pharmaceutical industry has, day by day," Catania said. He complains that District of Columbia residents, despite neighborhoods of poverty where he said health conditions mirrored those found in Haiti, pay the fourth or fifth highest drugs costs in the country.
PhRMA recently sued to block a price control law adopted by the District of Columbia council. A federal judge ruled last month in the drug organization's favor.
PhRMA will not disclose how much it is spending to influence state legislation, and Johnson denies that the industry employs an army of lobbyists. But given signs of the group's expansion, it is likely that its state advocacy budget has expanded since 2003, when The New York Times disclosed it was $48.7 million.
PhRMA has recently opened two new regional offices, in Indianapolis and Baton Rouge, Louisiana, adding to a number of existing offices and a field office in Washington, separate from its national headquarters. Johnson likens the field offices to World War II listening posts.
"If you have just one office in Washington, D.C., you're so insulated from what's happening in the heartland of America," according to Johnson, who says the regional offices help the industry understand issues at the state and local level.
"We have ongoing efforts in all 50 states," Johnson said, adding that, at times, some states require extra attention.
Among them, Johnson said, has been West Virginia.
In West Virginia alone, nine lobbyists have registered on behalf of PhRMA, while individual pharmaceutical companies employ 24 lobbyists in the state, according to state records. Johnson said that four of the registered PhRMA lobbyists are local people under retainer and the others are PhRMA employees who visit the state only occasionally.
In many other ways, West Virginia, where mountain vistas display a hinterland unmarred by development, seems stuck in a simpler time.
But those same lawmakers have decreed that the state, where a relatively old, poor and sick population means high health-care spending, will be on the vanguard in at least one area: controlling prescription drug costs. It is the reason the pharmaceutical industry lobby is pushing so hard here.
The House of Delegates speaker, Robert Kiss, who sponsored the 2004 legislation that set up a state Pharmaceutical Cost Management Council, said that a "revolution" was necessary to control rising pharmaceutical costs to state residents.
Joe Manchin, the governor, appointed Brown, a pharmacist, last year to the post of pharmaceutical advocate, which functions essentially as an executive director for the council.
Brown, who resigned in November, said the criticism he got for that round of golf had no effect on his decision to leave only 10 months after taking the job. He said he was simply more comfortable at a pharmacist's bench than in the political arena.
But Brown was also criticized for the council's slow pace under his leadership.
The 11-member council, made up of the heads of six state departments and five appointed public members, must accomplish whatever it will before the sunset provision that will put it out of business in 2008.
And some members of the council have complained that the pharmaceutical industry - in contrast to its splashy advertising campaign in California and its tough litigation strategy in Washington - is trying to kill cost regulation in West Virginia via slow death.
"They've been successful in slowing down the process," said Foster, who does not serve on the panel but frequently attends its meetings.
On a recent Friday afternoon, as the council discussed the soporific details of federal drug pricing and briefly considered a proposal that import cheaper drugs from Canada, the room was lined with industry lobbyists.
Some were home-grown, others had flown in from out of town, but all were intent on the discussion's every nuance.