From the Director

Now that summer is winding down, we'll be back on a regular newsletter schedule.  You can expect newsletters twice monthly and more frequently when there is breaking news.  While most state legislatures aren't in session until January, there's been plenty to do this summer.  Some highlights: 

Chicago! I have just returned from the Chicago round of trade negotiations for the Trans-Pacific Partnership Agreement (TPPA).  Access to affordable medicines  is a major issue under consideration in these talks.  I gave a presentation on US states' concerns to TPPA negotiators at the stakeholder forum in Chicago on September 10.  Earlier this week, the US Trade Representative issued a white paper on access to medicines.  The USTR paper, promoted as a commitment to expanding access to medicines, has proved to be extremely controversial and has not assuaged concerns of health activists that the TPPA will increase medicines costs. More on this issue below.  

Antitrust Issues & PBMs.  PBM issues  also heated up this summer with the proposed acquisition of Medco by Express Scripts.   Key members of Congress have weighed in asking for the Federal Trade Commission to review the proposed merger for anti-consumer impacts and the FTC itself has requested information from the parties. See below for more on this issue.  

Check out the News Ticker in this issue, as well as our Facebook page, for more news of interest on a variety of pharmaceutical topics. 

Where's NLARx next?  From trade policy to privacy rights, NLARx staff and members are making a difference.  Next stop: we're presenting in Concord, New Hampshire on October 14th at a University of New Hampshire Law School forum "Constitutional Constraints on State Health Care & Privacy Regulation" looking at state options after the US Supreme Court's  IMS v. Sorrell decision. Its an appropriate venue, given the leading role NH Representative (and current NLARx Board Chair) Cindy Rosenwald has had in developing and advocating for privacy protections in pharma datamining.  Maybe we will see you there, otherwise keep the emails and calls coming.  Sincerely, Sharon Treat    

What's Going on With Trade Policy and Access to Pharmaceuticals?

Pharmaceutical pricing and intellectual property issues have been front-and-center in the debate over the Korea-US free trade agreement under consideration by Congress, as well as in the Trans-Pacific Partnership Agreement (TPPA) still under negotiation.  In past years, NLARx and member legislators raised concerns about both the Australia and the Korea trade agreements, which included pharmaceutical provisions that could have conflicted with the effective implementation of Medicaid and reduced access to affordable medicines.  In January 2011, NLARx adopted a Resolution opposing these provisions in the TPPA. 

On September 10 in Chicago, NLARx Executive Director and Maine Representative Sharon Treat presented on the potential impact of the TPPA on access to affordable medicines in the US. Concerns included conflicts with the usual procedures followed by states and the federal government in Medicaid, 340B and Part B of Medicare, delayed access to generics, conflict with provisions of the Affordable Care Act, and locking the US into high market-based pricing of pharmaceuticals in the future. Similar concerns were raised by Vermont Governor and NLARx co-founder Peter Shumlin in a letter to President Obama.  See Pharmalot story quoting Rep. Treat and Prof. Sean Flynn's analysis here.

In the TPPA, according to an analysis of leaked text and analysis of a rather general public medicines white paper that was issued this week by USTR, the US has proposed provisions that would extend monopoly rights of pharmaceutical companies; would remove safeguards that allow patent applications to be challenged before they are granted; would allow patents to be granted for minor variations to existing drugs; and would provide extra rights for pharmaceutical companies in court. 

The pharmaceutical industry is also lobbying for further restrictions on the use of clinical trial data by the manufacturers of generic medicines seeking to register their generic versions - turning to secret trade deals to prop up profits as their blockbuster drugs go off patent.  Secret cables leaked by WikiLeaks confirm the industry's hands-on approach to USTR on these issues. 

The Center for Policy Analysis on Trade and Health (CPATH) and other public health experts have called on trade officials to reverse course and protect health. CPATH's research established that intellectual property rules in the Central American Free Trade Agreement (CAFTA) raised medicine prices in Guatemala by up to 856%.  The Austrialia-U.S. Free Trade Agreement authorized drug company intrusions into Australia's cost-effective drug purchasing system, resulting in increased prices for statins.

The US is also seeking investment provisions in the TPP agreement that would expose governments to legal action by foreign companies if governments introduce policies (including policies to protect public health) that affect these companies' profits. Similar trade provisions are the basis for a legal challenge by Phillip Morris to Uruguay's tobacco packaging warning label rules.  

All of this is cause for real concern, and NLARx has called on USTR  to act now to safeguard access to affordable medicines.  Read more about trade agreements and pharmaceutical policy.

Proposed PBM Merger Raises Antitrust and Medicine Affordability Issues 

 NLARx has had a longtime interest in pharmacy benefit manage (PBM) regulation and transparency, and has previously raised concerns about the anti-competitive nature of the PBM marketplace which has only 3 large companies controlling the vast majority of the market.  Now with the proposed merger of  Medco and Express Scripts, the market could be down to only 2 big players.  Indeed, if the deal goes through, Express Scripts will become the largest PBM in the US with a customer base of around 135 million, well ahead of next biggest rival CVS Caremark which serves around 85 million people.  This is cause for concern.    

Key members of Congress have weighed in asking for the Federal Trade Commission to review the proposed merger for anti-consumer impacts and the FTC itself has requested information from the parties.    The merger was also blasted by the chain drugstores and independent pharmacists. In its statement on the proposed merger, the National Community Pharmacists Association asserts: "In recent years, the major PBMs like Express Scripts and Medco have paid out $370 million to settle claims of fraud and deceptive practices. That 'rap sheet' is likely to only grow longer if this merger is approved and competition is further reduced due to the combination of these two corporate behemoths. At the same time, the profits of the major PBMs have skyrocketed by 400 percent. That level of profitability for what are essentially middlemen is astounding."