Massachusetts Senior Action Calls for Passage of Prescription Fair Pricing Act

The recent Vioxx, Paxil and flu vaccine scandals may be just the tip of the iceberg of widespread pharmaceutical company malfeasance, according to a flurry of authoritative books and reports which have appeared recently.

In Massachusetts, these have created powerful new arguments for passing the Prescription Drug Fair Pricing Bill in the Massachusetts legislature in 2005 after House Speaker Thomas Finneran in effect killed it in 2004. It is no surprise to many that Mr. Finneran, who resigned his legislative post recently, now works for the thriving biotech industry, which often does the preliminary work in creating new drugs for the big drug companies.

Dr. Marcia Angell of Harvard University, former long-time editor-in-chief of the New England Journal of Medicine (Ital.), details in her recent book,"The Truth About the Drug Companies" how she believes these companies not only sometimes foist dubious products on the public but also charge consumers outrageously unjustified high prices.

That book and many similar recent reports strongly assert that the companies too often are careless about assuring the safety and efficacy of their products but also earn unconscionably high profits. Their high prices, which come at the expense of U.S. consumers, state governments and employers, are justified by the industry on the grounds of the alleged high costs of research and development, a contention Dr. Angell believes is mostly false.

That a perfect storm is suddenly brewing for the drug companies is evident everywhere, such as in a December Associated Press story which quotes Dr. Catherine DeAngelis, editor of the Journal of the American Medical Association, to the effect that the drug safety system is like a dangerous building. "This building is on very shaky ground. Would I condemn it? No, but I would tell people, 'You go in at your own risk.' "

The powerful American Association for Retired People (AARP), once friendly towards the claims of the drug industry, says in a cover story in its November Bulletin that the "industry is taking a nosedive in public opinion." The story quotes whistleblower Dr. Peter Rost, a Pfizer marketing executive: "It is obvious to me that probably tens of thousands of Americans are dying today because they can't afford drugs."

The Prescription Drug Fair Pricing Act(FPA), conceived and long promoted by the Massachusetts Senior Action Council (MSAC), addresses a range of problems but would begin with the cost issue by establishing a system under which the state would negotiate with drug companies for lower prices and rebates through bulk purchasing (much the way the Canadian government and the U.S. Department of Veterans Affairs do).

An estimated $120 million in benefits would accrue annually to the state agencies that offer prescription drugs -- MassHealth, Prescription Advantage (for seniors and the disabled), state employee and retiree plans and others. But, perhaps more important, the lower prices also would become available to all the people in the state who lack prescription insurance. Isaac BenEzra of Amherst, MSAC president, estimates the total savings easily could reach $1 billion a year.

The bill also would establish a formulary which would insure consumer access to needed drugs, but would look askance at expensive new "me-too" drugs which Dr. Angell says often offer no advantage over older drugs, often cheaper generics. She says the me-too drugs are no more than imitations of drugs manufactured by other companies, designed primarily to be patentable as new drugs, and thus highly lucrative to the companies creating them. Moreover, she adds, companies sometimes will take an older drug upon which the patent is about to expire and make minor modifications in its composition so that it becomes patentable again but is no more effective than the older drug. The formulary system would allow doctors to override the formulary if they believed a patient truly needed one of the expensive new drugs.

Also required under the FPA would be "transparency" in drug company marketing practices, a feature MSAC reports will be toughened in the 2005 version of the bill. According to Dr. Angell, these marketing practices too often involve the rankest hucksterism and, sadly, include gifts, fees and subsidies to doctors for promoting the companies' latest nostrums. While drug company marketing to consumers in the media is a problem that could be solved only through a national ban (which the European Union, among others, has enacted), the FPA formulary would help to ameliorate its worst effects at least in Massachusetts and other states which have passed such legislation.

(Maine and West Virginia have passed similar legislation, and other states are considering it. One possibility the FPA contemplates is multi-state drug-purchasing coalitions which could greatly enhance the states' bargaining power with the drug companies.)

Dr. Angell's arguments about drug company pricing are too detailed to describe in detail, but perhaps one of her most persuasive points is that the research done by these companies scarcely justifies the companies' high prices since the companies "produce too many me-too drugs and too few innovatives ones," with the truly innovative ones being few indeed. She also describes accounting gimmicks the companies use to inflate research costs in the eyes of the public, including stating these costs "before taxes," that is before the companies have realized the benefit of deducting the costs for tax purposes. And she points out that marketing costs actually exceed research costs -- as do drug company profits themselves.

On the drug safety issue, she says that the federal Food and Drug Administration is too often "in the thrall of the industry it regulates," and that drug companies "have too much control over clinical research on their own products." A recent New York Times (Ital) story seems to confirm the latter in pointing out how university researchers downplayed the harmful side effects of an anti-depressant drug.

The FPA, which enjoys the support of most Western Massachusetts legislators, passed the Senate in 2004 but was stymied in the House by Speaker Finneran. Even with the replacement of Mr. Finneran as speaker by the reportedly more progressive Democrat Salvatore F. DiMasi of Eastern Massachusetts, the bill still may face an "uphill climb," says Mr. BenEzra, who adds that Mr. Finneran's hand will still be felt in the House.

Governor Mitt Romney, who recently proposed a plan he says would offer health insurance to many of the 600,000 or so people in Massachusetts who now lack it altogether, might find the Fair Pricing Act to be part of the answer, and Mr. BenEzra urges constituents to tell him so, as well as to get in touch with their legislators to support the legislation. Dr. Angell no doubt also would urge people in general to become more knowedgable about the drugs their doctors are prescribing for them.