[Mb-civic] Drug Firms ?Gouge? Consumers After Taking Taxpayer Handouts

[ean at sbcglobal.net]

http://newstandardnews.net/content/index.cfm/items/3059

Drug Firms ‘Gouge’ Consumers After Taking Taxpayer 
Handouts

by Catherine Komp 

Thanks to huge government grants offered to pharma companies 
that turn around and make gigantic profits off the drugs they 
create, Americans are paying twice for many of the drugs on 
which they depend.

Apr. 14 – In response to a major pharmaceutical company's 
announcement of skyrocketing profits and its plans to expand the 
market for an expensive cancer treatment, patient- and consumer-
rights advocates are demanding that the government step in and stop 
corporate "price gouging."
Consumers, such critics say, are paying twice – first, through federal 
grants to pharmaceutical companies to develop the drugs and again at 
the drug store. 
On Tuesday, the global biotechnology company Genentech reported 
that the company's total product sales for the first quarter of 2006 
increased 39 percent, to $1.64 billion, while sales of their colon-cancer 
drug Avastin increased 96 percent, raking in $398 million. The same 
day, Genentech also announced it was seeking approval from the 
Food and Drug Administration to expand use of Avastin to treat lung 
and breast cancer. 
Currently, colorectal cancer patients pay about $46,640 to prolong their 
lives through a ten-month treatment regimen of Avastin. According to 
the company's website, Genentech has not decided whether it will 
change Avastin's price if it receives the requested FDA approval, but 
the company says lung and breast cancer patients would need a 
dosage twice as high.
"It's immoral," said Sharon Treat, executive director of the non-profit 
National Legislative Association on Prescription Drug Prices (NLARX), 
referring to the price tag of Avastin. "There's no other source for this 
drug," Treat told The NewStandard. "It's a monopoly market and you 
have very sick people who can't afford to buy it now, and it just seems 
completely wrong." NLARX is a group funded and directed by 
lawmakers who seek to reduce prescription drug prices.
Genentech spokesperson Kristina Becker told TNS that the company 
takes access to their drugs "very seriously." Beck said the company 
provides free drugs to some people who do not have insurance and 
meet eligibility requirements, including an annual income cap of 
$75,000.
Jerry Flanagan, healthcare policy director with The Foundation for 
Taxpayer and Consumer Rights (FTCR), a nonprofit consumer 
watchdog group, said the development of life-saving drugs like Avastin 
through federal dollars strengthens the case for government regulation 
of drug prices. 
"It's a basic issue of fairness," Flanagan said. "The federal government 
involvement in Avastin has been similar to the federal government's 
involvement in all prescription drugs, in that taxpayer dollars have been 
used through the National Institute of Health to fund research and 
development of pharmaceuticals."
In its analysis of National Institute of Health information, the 
Foundation discovered that the federal government funded at least 100 
clinical trials of Avastin. FTCR filed a request under the Freedom of 
Information Act for documents containing the exact cost and budget of 
each trial. The group estimates that about 44 percent of health 
research in the United States is funded by federal grants.
Under a federal intellectual-property-rights law known as the Bayh-
Dole Act of 1980, federal agencies have the regulatory authority to 
enforce reasonable pricing of patented drugs developed with the aid of 
federal funding. However, Flanagan charged, the law is never enforced 
due to the political leverage of pharmaceutical companies in 
Washington. 
A 2005 study by the Center for Public Integrity (CPI), a federal 
watchdog organization, found that the pharmaceutical and health-
product industries spent $87 million on campaign contributions to 
federal candidates between 1998 and 2005. It also found that one-third 
of the industry's federal lobbyists were former federal officials.
"It's that kind of political power in Congress and at the regulatory level 
in the Bush administration that has kept the regulators away from 
enforcing these standards," Flanagan said. "There isn't the political will 
in Congress to stand up to the drug companies and enforce rules that 
require the drugs to be priced fairly. And that's not only a problem with 
Avastin; it's a problem across the board."
Another obstacle to government enforcement of price caps could be 
weaknesses in the law itself. Michael Davis, a professor of law at 
Cleveland State University who has researched drug-price controls 
under Bayh-Dole, said that regulation is triggered only when federal 
funding has led to the actual invention of a product. In cases when 
federal funding covers only testing and clinical trials after a product is 
invented, he said, "it's very unlikely that you could make an argument 
that the Bayh-Doyle Act applies." 
At the state level, however, lawmakers are attempting to tackle the 
issue of excessively expensive prescription drugs. The National 
Conference of State Legislators reported that as of December 2005, at 
least 144 bills in 44 states were passed addressing prescription-drug 
access, affordability and regulation. 
But like federal officials, state lawmakers are also not immune to 
campaign-finance pressures. A CPI report released last week found 
that the pharmaceutical industry spent more than $44 million on 
lobbying state governments in 2003 and 2004.
In Washington, DC, city council members unanimously approved the 
Prescription Drug Excessive Pricing Act of 2005, which would let 
consumers sue pharmaceutical companies if the price of a drug is 
more than 30 percent higher in the local market than in countries with 
comparable income levels, like Canada, Germany or the United 
Kingdom. Following lawsuits filed by drug-industry trade groups, a 
federal judge ruled last December that the law was unconstitutional 
because it violated laws governing interstate commerce and federal 
patents. The city is appealing that ruling. 
In Wyoming and Wisconsin, lawmakers have passed bills establishing 
"drug repositories," which pool unused drugs donated by doctors, 
patients and families, and then reissue them to low-income patients. 
Other states, including Washington, Ohio, and Montana, have passed 
laws authorizing bulk-purchasing programs, in which the state 
negotiates drug discounts for local governments, private entities, labor 
unions and uninsured individuals.
But James Love, director of the Consumer Project on Technology 
(CPT), an international intellectual-property and health policy 
organization, said that it is difficult for the government to negotiate 
prices after a drug proven to be beneficial establishes its value on the 
market. 
"It's a very awkward conversation," said Love. "Basically, you're saying, 
'How much money is the government going to pony up to keep this 
person alive for a couple of months? What's that person worth?'"
Love's organization advocates more substantial changes in drug 
licensing, including eliminating exclusive patent rights and instead 
creating government-sponsored incentives for companies to develop 
beneficial drugs. 
Last January, Representative Bernie Sanders (I-VT) proposed 
legislation to provide such incentives with the Medical Innovation Prize 
Fund Act. 
The bill would have established a fund to reward drug developers 
based on the benefits of new treatments, while at the same time 
requiring that FDA-approved products automatically be open to generic 
production. But with no cosponsors, the bill died in committee in March 
2005.
Flanagan of the FTCR said recent examples of "obscene" price-
gouging by drug companies are strengthening public campaigns to 
stop the practice. In light of the failure of federal regulators to enforce 
provisions of the Bayh-Doyle Act, he added, lawsuits could be the most 
effective way to curb the ballooning prices of prescription drugs. 
"When taxpayers contribute hundreds of millions of dollars to develop 
a drug," said Flanagan, "that investment should be reflected in fair 
pricing. [If] we're going to socialize the cost of developing these drugs, 
we should also make sure there's a social benefit in that taxpayer 
investment."

© 2006 The NewStandard. All rights reserved. The NewStandard is a 
non-profit publisher that encourages noncommercial reproduction of its 
content. Reprints must prominently attribute the author and The 
NewStandard, hyperlink to http://newstandardnews.net (online) or 
display newstandardnews.net (print), and carry this notice. For more 
information or commercial reprint rights, please see the TNS reprint 
policy. 


-- 
You are currently on Mha Atma's Earth Action Network email list, 
option D (up to 3 emails/day).  To be removed, or to switch options 
(option A - 1x/week, option B - 3/wk, option C - up to 1x/day, option D - 
up to 3x/day) please reply and let us know!  If someone forwarded you 
this email and you want to be on our list, send an email to 
ean at sbcglobal.net and tell us which option you'd like.


"A war of aggression is the supreme international crime." -- Robert Jackson,
 former U.S. Supreme Court Chief Justice and Nuremberg prosecutor

-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://www.islandlists.com/pipermail/mb-civic/attachments/20060417/103f5a1c/attachment.htm