PhRMA stands behind role in Healthcare negotiations

The following Publisher’s note is the opinion of Daniel Hines and RxforfAmericanHealth.blogspot.com, and does not reflect the viewpoint of Kaiser: The interview is reprinted here as a public service to offer insights into the workings of a powerful lobby within The Beltway. Gone are the days that legislation was shaped by citizen involvement, public hearings, and testimony from concerned citizens with specialized knowledge, not special interests: Yesterday we blogged about how PhRMA’s role in the behind-closed-door Healthcare Reform ‘negotiations’ and its supposed savings for Seniors in The Doughnut Hole really were a Magic Lantern Show. The following interview and PhRMA’s comments about not being able to identify the true extent of the savings provide, we believe, validity to our observations.

The complete, unedited interview/story follows:

PhRMA Chief Says Support For Health Law 'Was Right Decision'—The KHN Interview

By Bara Vaida

JUL 13, 2011

One year after John Castellani took control of PhRMA, the former manufacturing executive has steered the drugmakers' lobbying group to be ready for battle with the White House.

Gone are the days where the Pharmaceutical Research and Manufacturers of America, is making deals with a Democratic White House and spending $101 million on advertising to promote the new health law. That was the successful strategy of PhRMA’s previous leader, former Rep. Billy Tauzin, R-La. to ward off new regulations for the industry in the law. Now PhRMA has signaled that it will fight any attempt by congressional Democrats or the White House in the current deficit reduction talks to save money by cutting drug spending in government programs.

In a hastily scheduled press conference this week, Castellani made it clear that PhRMA opposes a Democratic proposal that would require drugmakers to pay rebates to the Medicare program for beneficiaries who qualify for both Medicare and Medicaid, known as the "dual eligibles." He said it would "do serious harm to the industry, serious harm to (pharmaceutical) jobs and we oppose it. … We opposed it in the context of the discussions around the [health law] and we oppose it now." And if the proposal succeeds, Castellani said there "would be the risk" that drug companies would begin to move their operations to countries outside the U.S.

Still, Castellani says the industry doesn’t regret supporting the health law because he says it "was the right decision under the political context at the time," although his group would like to see some changes in the law.

Castellani recently spoke with Kaiser Health News' Bara Vaida. Here is an edited excerpt:

Q. PhRMA made a $80 billion to $100 billion deal with the Obama administration during the health reform debate to stave off more regulations, angering many of your Republican allies in Congress. Are you sorry the industry made that deal?

A. No. No. It was the right decision under the political context at the time. You had a Democratic president and a Democratic Congress and sweeping legislation that affected our industry. The decisions that were made were appropriate given the political circumstances.

Q. How much was the final deal? $80 billion or $100 billion? What number is right?

A. I can't comment given the nature of how [the Medicare rebate] affects individual companies.

Q. You have said you would like to see the Independent Payment Advisory Board (IPAB) in the health law repealed. What are you doing specifically to lobby on that?

A. IPAB is fundamentally flawed. It has to be repealed in its existing form or mitigated. What we have been doing is talking to other groups that are affected by it and talking to members of Congress. There is a substantial bipartisan effort to repeal [IPAB] that is almost unrelated to what we are doing about it.

Q. The president targeted the drug industry in his recent deficit reduction plan, how do you feel about that?

A. The president proposed to shorten the period of data exclusivity for biologics. It was disappointing and a bit surprising. He talked in the State of the Union speech about owning the future and investing in technology, and (his efforts on biologics) is discouraging what he wanted to encourage.

Q. What about the deficit reduction plan proposed by Rep. Paul Ryan, R-Wis. Would you support or oppose that? Do you see any dangers to the drug industry?

A. We don't know enough about it. We do think we need to have a debate about how do you fundamentally change Medicare so that it can be affordable (for the future). All ideas ought to be on the table.

Q. What are you doing to manage the drug industry's reputation with the public? People feel drug companies charge too much for their products.

A. Obviously we need to be trusted by public policymakers and by patients and by clinicians, and that is something that we are committed to doing. The problem is the delivery system by which people get medicines. [The system] is designed to disproportionately show the cost of medicine, so even though we are only about 10 percent of total health care costs, we are 40 percent of out-of-pocket expenses. That makes people think that we are the most expensive part of the health care, when in fact we may have the most value and be much less expensive than acute care. The other problem is that we haven't done a good enough a job of explaining the scientific process in how difficult and potentially rewarding it is and we need to help people understand where we fit in the economy and the kinds of jobs we produce and the kinds of value-added we provide.

Q. What about PhRMA's political reputation? Some Republicans remain angry over your support for health reform?

A. People try to portray us as Democrat or Republican. We are not. We are pro PhRMA. Lawmakers that recognize the value of PhRMA to their states and the economy and the costs of medicine are the people we support. The grumbling will always be there. There will always be someone who will find a reason why we should be doing something differently than we are going to do.

Q. You've acknowledged the industry spent about $25 million in the 2010 election cycle to get candidates elected. How much will you spend in the 2012 cycle?

A. We will support the candidates that support the industry, and I don't know who that is yet. It's too early. Really. I am not playing hide the peanut. I will tell you when I know (how much) it is.

Q. You say 75 percent of all prescriptions filled are generics rather than brand-name, what does that mean for PhRMA and the industry's business model?

A. Generics are an important part of the medicine life cycle. We produced all of them. They are our children. But if you are going to continue to innovate, you have to continue to support returns for the inordinate investment it takes to find new medicines. It is $1 billion to $1.3 billion over 10 to 12 years to develop a new medicine, so you have to have the mix of patent protections if you are going to have the rewards for that innovation. If you don't want to pay for the innovation, then you have to say to American patients, we have invented everything that we can invent. But we don't believe that. There are still discoveries out there. The problem with what the president proposed and when people say we ought to go to all generics, is generic companies don't spend money on research and development. We do.

Q. What about comparative effectiveness. PhRMA on its blog says it is a good thing, but the industry fights it.

A. Here is one of the issues that is difficult to deal with. The discovery process is an iterative one. Let's take some of the work done on HIV/AIDS. When (researchers) started out, you were talking about extending life for six months, then a year, then 18 months and then over years it turned HIV into a chronic disease. Clinicians learned, and the results got better over time. Comparative effectiveness can be good if it looks at the spectrum of the options available over a long enough period of time to know what the real value is.

Kaiser Health News reporter Mary Agnes Carey contributed to this article.

Time for critics of importation to look closer to home

Our most recent posting, actually a reposting, of an earlier criticism of Dr. Marv Shepherd, who, in his role as Director of the Center for Pharmacoeconomic Studies and Chairman of the Pharmacy Administration Division at the University of Texas-Austin College of Pharmacy, warned about the dangers of prescription medicines sold via internet mail-order pharmacies, suggesting that anyone making such an order, risked getting unsafe and/or counterfeit medicines, prompted a response from one reader who suggested that we lacked the courage of our convictions because while the Doctor 'signed' his papers, we published anonymously.

The writer failed to notice that sections of our blog site clearly identified us as the publisher of the site, so we expanded our identification. Interestingly, the critic had signed his/her response, 'Anonymous'.

But to move on. Let's see how concerned Dr. Shepherd and others who make misleading charges in an attempt to discourage individual importation of safe, affordable medications from licensed registered pharmacies are about the safety standards of the pharmaceutical industry itself.

This news release from the Missouri Attorney General indicates how two leading manufacturers risked the safety of Americans by their failure to report negative effects of two medicines they produced.

It is especially interesting to note that the attorneys general of 36 states were involved in the 'settlement' with Merck and Schering-Plough, but look where the drugs come from--Singapore, where the companies had a joint venture, named somewhat uncreatively MSP-Singapore.

So here is our standing invitation to Dr. Shepherd to show that he is truly concerned about prescription drug safety and holding pharma accountable for honest, open communications.

Using the University's PR budget, we urge him to do a study on bad medicines foisted upon the American public. Identify the companies, the medicines, and the potential health impact of the deception of pharma. Then, issue a news release about the need to make sure that pharma doesn't endanger the health and well-being of Americans.

The release follows. It is evident that the health threat to U.S. citizens from the misinformation of pharma is more of a threat than personal importation of safe, affordable prescriptions from licensed, registered pharmacies in Tier One countries.

Attorney General Koster announces Missouri to receive $100,000 in
settlement with Merck and Schering-Plough
--drug companies slow to disclose negative drug-study results--

Jefferson City, Mo. -- Attorney General Chris Koster today
announced a multi-state settlement with Merck & Co. Inc, Shering-Plough
Corporation, and a joint venture of the two companies, MSP Singapore
Company, LLC.

“When pharmaceutical companies slow reports of negative
drug-study results they are as good as lying to the public,” Koster
said. “It is unconscionable that a drug company would withhold
information that physicians and their patients need to make good
health-care decisions,” Koster said. “The agreement with Merck and
Schering-Plough sends a strong message that this Attorney General’s
office will be vigilant on public health issues and that we will not
allow businesses to put profits before patients.”

The settlement resolves an investigation into the companies'
lengthy delay in releasing negative results from the clinical trial
called ENHANCE (Ezetimibe and Simvastatin in Hypercholsterolemia
Enhances Atherosclerosis Regression). In this study, the
cholesterol-lowering drug Vytorin (a combination of the drug Zetia and
simvastatin) was no more effective reducing formation of plaque in
carotid arteries than the cheap, generically available
cholesterol-lowering drug simvastatin. Although ENHANCE ended May 2006,
a partial reporting of negative results did not occur until January 2008
and complete results were not published until the following April.
Prior to release of study results, Vytorin had been heavily promoted in
direct-to-consumer advertisements.

The settlement terms that now apply to Vytorin and Zetia are
requirements to:

● Obtain pre-approval from FDA for all direct-to-consumer
television advertisements;

● Comply with FDA suggestions to modify drug advertising;

● Register clinical trials and post their results;

● Prohibit ghost writing of articles;

● Reduce conflicts of interest for Data Safety Monitoring
Boards that ensure the safety of
participants in clinical trials; and,

● Comply with detailed rules prohibiting the deceptive use
of clinical trials.

In addition to these terms, the companies agreed to pay the
investigation costs of the 36 states participating in the settlement.
Missouri will receive $100,000 for its work on the investigation.

It's Deja Vu All Over Again

Earlier, we noted our concern over the apparent bail-out by The White House regarding PhRMA's Billy Tauzin, as he smugly announced that TWH suggested that personal importation of safe, affordable medicines from licensed registered pharmacies in Tier One Countries, those generally recognized as having standards of safety and efficacy that meet or exceed those of the U.S., might no longer 'be necessary' because of the 'savings' provided by comprehensive health care reform.

If we needed any proof that it was the signal for a launch by the pharmaceutical industry and its friends against moves to provide such vital medicines and provide some pricing pressure upon the predatory tactics of pharma, it has been provided by an 'old reliable', Dr. Marv Shepherd, who has devoted years of campaigning against importation of vital medicines.

We first came across Dr. Shepherd some years ago when we were still so naive as to believe that we could reach out to correct the misstatements made by some against importation. We were told by the Doctor at that time that the comments (about Terrorist links to Canadian pharmacies) he had made were merely raised at a meeting he was attending, and he further implied that he had a limited exposure to the issue.

When we found out the true extent of his involvement in the 'issue', we had an attack of righteous indignation, and published the following blog on another site. Now, just today, Dr. Shepherd has resurfaced to attempt to scare to death (likely by not taking vital medicines they cannot otherwise afford) of those Americans seeking the health benefits of safe, affordable prescription medicines. As a public service, we reprint the earlier article. As you read the list of speaking engagements and topics, remember, this was by a man who purported to me that he had little involvement with the subject of importation...the article follows. We make no claims about any funding that might or might not have been provided, although the latest release comes from the University:

The Past Leaves a Trail
Yesterday, we posted our news release link and blog on the activities of Dr. Marv Shepherd, who heads up something called the Pharmacoeconomic Studies Center at the University of Texas, laying out his record of misdirection with his article claiming that prescription drugs from Canada were 'counterfeit' and helped fund terrorist activities.

That he also took the time to rap the Vitter-Nelson amendment, approved 68-32 by the U.S. Senate, forbidding the seizure of prescriptions from licensed, registered pharmacies, indicated to us that he was really just carrying water for the pharmaceutical companies.

We had given him a chance to clarify his position. He claimed in a telephone call that he had heard something about the issue (terrorist links) at a California meeting earlier this summer. A little more research shows just how deep his lack of credibility goes and further validates that he has for years been mouthing the position of the large drug companies.

Here, from his web site, is a listing of papers, interviews and presentations he has made on pharmcoeconomic studies, whatever in the blazes that it. To me it looks more like a long history of opposition to access to safe, affordable prescriptions from outside the U.S., even if they are form licensed, registered pharmacies subject to the oversight of their own country's regulatory bodies. Perhaps Shepherd should be talking more about the recent finding that the FDA directory of prescription medicines is severely outdated.

Notice the phrases in the titles...'threats', 'dangers', 'vulnerbility', 'safety concerns', 'myths', 'effects on quality of care', just to name a few. Also, in his presentation on the impact of the millions of dollars spent on advertising directly to consumers, his conclusion was "Even though every year the javascript:void(0)industry spends millions of dollars on DTCA of prescription dmgs we cannot conclude that it influences drug prices." It is obvious that Shepherd's latest parroting of drug company claims was just another in a long series of papers, studies, etc. that lack any true academic standing. It's a shame that the people of Texas allow such a proud university to be used by large drug companies.

If you need more proof, here's the list of presentations by Dr. Shepherd...you are free to draw your own conclusions...why was he talking about the myths of reimportation to the Deparatment of Defense, for example...but one that is evident is that Shepherd was less that forthright with me when he tried to explain away his interest in counterfeiting as something that he had just heard about and felt compelled to write on, but was actually continuing a role of many years:

Presentations by Dr. Marv Shepherd
1."Prescription Drug Importation" presented at the 2004 Health Care Conference, Texas Association of Business and Texas Business Group on Health, Dallas, TX, September 8, 2004.
2. "Counterfeit Medicines: The American Experience" presented at the World Congress of Pharmacy and Pharmaceutical Sciences 2004, 64 th Congress of the Federation of International Pharmacists, New Orleans, LA September 9, 2004
3. "Threat of Drug Importation" presented at the West Texas Pharmacists Association, Lubbock, TX, September 18, 2004.
4. "Issues in Drug Importation" presented at the Illinois Pharmacists Association Annual Meeting, Arlington Heights, IL September 19, 2004.
5. "Threat of Drug Importation" presented at the Western New York Society of Health System Pharmacists meeting, Buffalo, NY, September 16, 2004.
6."Hazards of Drug Importation" presented at the University of Texas College of Pharmacy, Legends of Pharmacy Open and Learning on the Links Continuing Education Program, Austin, TX, September 24, 2004
7. "Threats of Drug Importation and Vulnerability of Our Drug Distribution System," presented at Florida A&M University Forum Series, College of Pharmacy and Pharmaceutical Sciences, Tallahassee, FL, October 5, 2004.
8. "Threat of Drug Importation," presented at the ARMSRx Ease of In-Sourcing Conference, Tortola, Bristish Virgin Islands, October 10, 2004.
9."Integrity of the Drug Supply System: Threats of Counterfeit Pharmaceuticals" presented at the Academy of Managed Care 2004 Educational conference, Baltimore, MD, Oct 15, 2004
10. "Drug Importation and the Vulnerability of Our Drug Supply Chain," presented at the American Society of Health-System Pharmacists 2004 Management Conference for Leaders in Pharmacy, Chicago, IL, October18, 2004.
11."The Importation of Drugs," presented at the Annual Meeting of the American College of Clinical Pharmacists, Dallas, TX, October 26, 2004.
12. "Wakeup Call: A Perfect Storm is Brewing" presented at the District VII and VII NABP-AACP Annual Meeting, Las Vegas, NV, October 28, 2004.
13. "Threat of Drug Importation and the Vulnerability of Our Drug Distribution System," presented at the Federal Pharmacy Conference, University of Texas, College of Pharmacy, Austin, TX, November 5, 2004
14."Statement on Prescription Drug Importation," presented and submitted to the Texas Legislative Conservative Coalition Research Institute Conference, Austin, TX, November 9, 2004.
15."Safety Concerns regarding Imported Medications," presented at the Understanding Importation Impact on Health Care Outcomes Conference, Madison, WI, November 11, 2004.
16. "New Drugs in the Pipeline and New Generic Releases," presented at the Department of Defense Pharmacoeconomics and Pharmacy Benefit Conference, San Antonio, TX, January 11, 2005
17. "Myths of Drug Importation" presented at the Department of Defense, Pharmacoeconomics and Pharmacy Benefit Conference, San Antonio, TX, January 12, 2005
18. "Effects of Drug Importation on Quality of Care," presented at the Coalition of Rheumatologists Advocacy Conference: Impact of Pharmacy Programs on Access to Rheumatologic Care, San Francisco, CA, January 22, 2005.
19."Myths of Drug Importation," presented at the Federation of American Hospitals Conference, Washington, D.C., February 28, 2005.
20."Drug Industry: Importation and Reimportation of Drugs," presented at the College of Psychiatric and Neurologic Pharmacists Annual Conference, San Diego, CA, March 12, 2005.
21. "Myths of Drug Importation," presented at the Michigan Health and Safety Coalition Patient Safety Conference, Dearborn, MI, April 8, 2005.
22."Global Pharmaceutical Marketplace/Importation," presented at the Food Marketing Institute 18 th Annual Supermarket Pharmacy Conference, New Orleans, LA, April 12, 2005.
23."Patients at Risk: Illegal Importation and Counterfeiting of Drugs," presented the Texas Organization of Rural and Community Hospitals Conference, Dallas, TX, April14, 2005.
24."Update on the Medicare Part D Prescription Drug Program," present at the College of Pharmacy University of Texas, Advisory Council, April 15, 2005.
25."Safety of America's Drug Supply Chain," presented at the Illinois Council of Health System Pharmacists and the Missouri Society of Health-System Pharmacists Spring Meeting, St. Charles, MO, April 16, 2005.
26."Internet Drug Traffic and Diversion of Prescription Drugs," presented at the Train the Trainer Drug Conference, Drug Enforcement Administration, El Paso, TX, April 20, 2005
27. "Myths of Drug Importation," presented at the Drug Enforcement Administration (DEA) Train the Trainer Conference, El Paso, TX, April 20, 2005.
28."The Truth and Consequences of Drug Importation," presented at the New Jersey Society of Health-System Pharmacists Annual Meeting, New Brunswick, NJ, April 21, 2005.
29."Myths of Drug Importation," presented at Argus Health Systems, Kansas City, MO, April 28, 2005.
30. "Policy Implications: Drug Quality, Safety Issues and Threats from Imported Medications," presented at the International Drug Importation Conference, Institute of Health Law Studies, California Western School of Law, San Diego, CA, June 3, 2005.
31."Myths of Drug Importation," presented at the Rochester NY Physicians Meeting, Rochester NY, June 13, 2005.
32."Myths of Drug Importation," presented at the Pfizer Pharmaceutical Speaker Program, Williamsville, NY, June 14, 2005.
33."Drug Importation: Global and Mexico," presented at the Healthcare Distribution Management Association 2005 Distribution Management Conference & Expo, Orlando, FL, June 16, 2005.
34."Threats of Drug Importation and the Vulnerability of Our Drug Distribution System," presented at the Arizona Pharmacy Alliance Annual Meeting, Phoenix, AZ, June 18, 2005.
35. "Drug Importation and the Vulnerability of Drug Distribution System," presented at the PharmaCare 3 rd Party Administrators Annual Conference, New Port RI, July 11, 2005.
36. "Counterfeit Drugs and the Vulnerability of Our Drug Distribution System," presented at the Texas Academy of Family Physicians Annual Meeting, San Antonio, TX, August 15, 2005.
37. "Thoughts on the Future of Pharmacy," presented at the Annul Pharmacy Conference of the Texas Community Health Centers, Austin, TX, August 25, 2005.
Research Presentations
38. Dastani H and Shepherd MD, "Predictors of Compliance and Persistence to Statin Therapy Among Texas Medicaid Patients," poster presentation at the annual meeting of the International Society of Pharmacoeconomics and Outcomes Research, Washington DC, May 16, 2005.
39. Nair R, Shepherd MD, Barner J, Lawson K, Wilson J and Warner D, Evaluation of Factors Related to Diagnosis of Hyperlipidemia: The Roll of Direct-to-Consumer Advertising Expenditures, Health Insurance Coverage and Gender, poster presentation at the annual meeting of the International Society of Pharmacoeconomics and Outcomes Research, Washington DC, May 16, 2005.
40. Shah S, Novak S and Shepherd MD, Evaluation and Comparison of Different Models of Metabolic Syndrome Using Confirmatory Factor Analysis, poster presentation at the annual meeting of the International Society of Pharmacoeconomics and Outcomes Research, Washington DC, May 17, 2005.
41. Panjabi, SS and Shepherd MD, Confirmatory Factor Analysis of the Beck Depression Inventory, poster presentation at the annual meeting of the International Society of Pharmacoeconomics and Outcomes Research, Washington DC, May 17, 2005.
42. Dastani H Shepherd MD, and Sasane R, Compliance and Persistence to Statin Therapy Among Texas Medicaid Patients, presented at the annual meeting of the Academy of Managed Care Pharmacy, Denver, CO, April 22, 2005.
Publications:
43. Shepherd, MD, "Counterfeit Drugs and the Pharmacist's Responsibilities" CESolutions, ( http://www.cesolution.com/) 1-12.
44. Shepherd, MD, "Drug Quality: Safety Issues and Threats of Drug Importation," California Western Law Review/International Law Journal , Special Edition, Summer 2005. 77-88.
45. "Alternatives in Savings in Purchasing of Medications," The Senior News Source , Vol 7, Issue 2, April 15, 2005. p.1
"Examination of the Relationship of Direct-to-Consumer Advertising Expenditures and Drug Price," Drug Information Journal , Vol 39, No.1, 2005, 13-24.
ED-OP Articles
46. Shepherd MD, "U.S. Should Solve Its Own Problems" Vancouver Sun , November 2, 2004, A13.
Shepherd, MD, "Canada is Not the Answer" Chicago Sun Times , October 23, 2004
47. "What if Canada Says 'No' to US on Drug Importation" USA TODAY , December 29, 2004, A13.
Interviews
48. Bioworld Today, "Canada Considers Stopping U.S. from Importing Drugs," January 18, 2005
49. KTBB-AM - Tyler TX - Talk Radio Interview, Roger Gray Show, January 11, 2005
50. KCRS-Midland/Odessa -Talk Radio, Robert Hallmark Show, January 11, 2005
DFW Metro Networks -Dallas TX, Amber Browne, January 20, 2005
Cooking Lite Magazine
51.San Antonio Express News , Editorial Advisory Board, January 11, 2005.
52.Austin American Statesman , Editorial Advisory Board, January 18, 2005
53.Houston Chronicle , Editorial Advisory Board, February 2, 2005
54. News Press Conference at the Texas Capital on Drug Importation, April 6, 2005

Would anyone like to make book on what he talked about at the Editorial Advisory Boards and the talk shows? I wish I had his frequent flyer miles since he has been all over the country...almost always protecting the position of large pharmaceutical companies. What in the world did he have to say to Pfizer, though?