This spring, the U.S. Supreme Court faces several decisions that will impact millions of people: legal challenges to the Defense of Marriage Act (DOMA) and the Voting Rights Act, for instance. But another case getting less media attention will affect all Americans who pay health care premiums or taxes.

The Supreme Court will decide whether the increasingly frequent practice of brand-name drug companies paying off their competitors to keep new generics off the market is a violation of antitrust law. As former Federal Trade Commission (FTC) attorney David Balto told Politico “There’s no other case that can have as much impact on reducing health care costs.”

This practice, called “pay-for-delay,” has skyrocketed since an appeals court decision allowed the first such deal in 2005. Since then, over a hundred pay-for-delay deals have delayed generic versions of 20 to 30 brand-name drugs each year, according to federal regulators at FTC.

There is no question delaying access to generic drugs harms consumers. That’s why Community Catalyst has helped consumers and advocacy organizations join legal challenges to pay-for-delay deals that blocked consumer access to generics of Provigil, K-Dur and Tamoxifen for years. We have also filed or joined Amicus briefs, and organized national and state-based advocates calling on Congress to ban pay-for-delay agreements.

Recently, Politico ran another story about how one defendant drug-maker in the case (Solvay Pharmaceutical) claimed that these pay-for-delay agreements don’t harm consumers, a position echoed by the generic drug industry’s trade group GPhA. But the FTC, U.S. Department of Justice, Attorneys-General in 36 states and consumer advocates all disagree. Why? Because access to generic drugs brings big savings for consumers and health plans. Look at GPhA’s own data that estimates access to generic drugs has saved consumers and our health care system more than $1 trillion from 2002 to 2011. That’s because generics cost one-fifth to one-tenth as much as brand-name drugs.

How the System’s Supposed to Work

Traditionally, generic drug companies wait for the patent on a brand-name drug’s active ingredient to expire and then file an application with the FDA to bring the generic version of the drug to market. Then the brand-name drug company sues the generic drug company, claiming some “patent infringement.” But in nearly all cases, the drug itself is off-patent. So the infringement is of a “secondary” or “defensive” patent that addresses some minor detail, like how the drug is formulated into a pill, or some step in the manufacturing process. The generic drug company then defends themselves from the litigation, and if they win, they launch their generic right away.

How Pay-for-Delay Deals Broke the System

Since 2005, generic and “BigPharma” companies have decided to do what the federal and state anti-trust regulators see as collusion. During litigation, the brand-name drug company offers to settle the patent infringement lawsuit they filed by paying tens or even hundreds of millions to the generic company, which then agrees to not to start selling a generic for several years. Pay-for-delay settlements are very suspicious, not only because they are made in secret but also because the payments are going the wrong way. Usually the patent-infringer is forced to pay if they violate someone else’s patent. But in these pay-for-delay settlements, these roles are reversed.

For example, Bayer sued four generic manufacturers, saying, in essence:  You have infringed the patent on our blockbuster drug Cipro. To show you how angry we are, we will pay you 400 million dollars. But only if you stay off the market.

As a result, consumers did not have a generic version of the antibiotic Cipro for another seven years, while Bayer made billions in unfair profits. Overall, these so-called settlements have caused consumers and their health plans to pay tens of billions right into the pockets of the brand-name drug companies. This creates a powerful incentive to collude and delay competition as long as possible. For the millions who are underinsured, delaying a generic can force patients to pay thousands of dollars a year, or go without needed medicine.

One story we collected from a consumer from Kansas describes his struggle to afford Provigil, whose generic was delayed from 2006 to 2011 by pay for delay. He reported: “[Despite] paying almost $17,000 in annual premiums for my family [health insurance plan] last year, I was paying around$650/month [for Provigil]… That is out of pocket money I have to come up with until later in the year when I reach my deductible [sic] and I can enjoy a few months of only paying $60/month. I cannot describe to you how much stress and difficulty this has caused for me and my family the last several years…”

The real question is whether the high court will allow these secret deals and legal maneuverings to continue? Or will it restore legitimate competition to this market, lowering health care costs and ensuring better access to affordable medicines for all Americans?

Stay tuned. We will be blogging regularly about this case as it unfolds and calling attention to how pay-for-delay deals harm consumers and increase the cost of health care.

When drugmakers lie to doctors about a drug’s safety or effectiveness, health plans pay more for substandard care, and patients suffer.

Case in point — the recent guilty plea and $1.5 billion settlement for illegal promotion of the drug Depakote revealed how Abbott Labs misled doctors for nearly a decade. They went to great lengths, profiling doctors, training their salespeople, and inappropriately funding and influencing Continuing Medical Education to get doctors to prescribe Depakote for unapproved treatment of seniors with dementia. Why? Because such off-label promotion instantly expands a drug’s market, and thus the drugmaker’s potential profits.

Unfortunately, class action lawsuits on behalf of consumers and health plans challenging such illegal marketing have met significant legal hurdles, and have been dismissed. This leaves consumers and private market health plans paying billions because of this fraud, while millions of patients receive inappropriate treatment, and are unnecessarily put at risk of side effects, which are often serious.

But progress is being made by State Attorneys-General and the Department of Justice bringing legal challenges under false claim laws. As a result, six of the biggest drugmakers have admitted or pled guilty to illegal promotion of unapproved uses of drugs since 2004. These investigations, most often initiated by whistleblowers, have led to the largest fines in U.S. history, and billions will be recovered this year alone.

But while all these enforcement actions are a welcome development, a recent jury verdict in a trial by the State of Arkansas may become a game-changer in the fight to stop the illegal marketing or promotion of drug products.

This past April, Arkansas Attorney-General Dustin McDaniel won a staggering verdict against Johnson & Johnson for their illegal promotion of the off-label uses of the antipsychotic drug Risperdal. In a trial before a jury, the state won $1.19 billion (yes, that’s ‘b’ ) in fines for violations of the state Medicaid anti-fraud law.

A hefty billion-dollar fine like this from one state sends a very big message — drug companies can no longer pursue profits by scoffing at the laws designed to protect safety-net health plans and the patients they serve.

Even more encouraging is the fact that most of the $1.19 billion in fines will go to the State Medicaid fund, which is looking at a $400 million budget shortfall next year.

What could be better than a deterrent that also helps stabilize funding for a state’s Medicaid plan during these tough economic times? Well, the only thing that could make this victory even better would be for Arkansas’ Medicaid program to earmark some of these recovered funds to correct the misinformation spread by Johnson & Johnson. Setting aside even a small amount of funds to allow trained independent medical professionals to go out into the field and teach doctors about the appropriate and effective alternatives to the unapproved uses of Risperdal will help prevent any ongoing inappropriate use of Risperdal, improving the quality of patient care and protect patients from being harmed by the significant side effects of the drug, like weight gain and diabetes. (See more about such education programs here.)

As we have seen in drug pricing (here and here) and universal coverage, the States often take the lead in on innovative ways to protect consumers. Based on this successful prosecution by the Arkansas Attorney-General, it wouldn’t be a bad idea for the remaining States to beef up their anti-fraud laws and enforcement staff, and go after the drug industry.

– Wells Wilkinson
Director, Prescription Access Litigation
Staff Attorney, Community Catalyst

The guilty plea and $1.5 billion settlement by Abbott to resolve their illegal off-label promotion of Depakote revealed a saga of extensive industry abuses and influence peddling that put millions of vulnerable seniors at risk. Abbott’s extensive promotion of the unapproved uses of the anti-convulsant drug Depakote to treat both seniors with dementia and to treat children is shocking. But it is even more alarming that this not the first major drugmaker to plead guilty to illegal marketing tactics that have targeted this exceptionally vulnerable population of seniors.

Many may recall that Eli Lilly was caught illegally promoting the unapproved, or “off-label” use of the antipsychotic drug Zyprexa to treat seniors with dementia, despite their internal studies showing that the risk of death from this drug increased in elderly patients.

Marketing these drugs to nursing homes for use on patients who ‘act up’ or are unruly has been a lucrative strategy for drugmakers. In response, we applaud the Department of Justice and the State Attorneys-General for their increasingly aggressive litigation to penalize these dangerous and unconscionable marketing practices.

But unfortunately for the millions of seniors who may be given Depakote or Zyprexa today or in the near future, the record-breaking $1.4 and $1.5 billion settlements respectively may not translate into improved care, unless further action is taken.

We urge Medicare and Medicaid officials at the federal and state level to move quickly to develop and implement safeguards, such as prior approvals or mandatory second opinions, that could be put in place to protect these vulnerable seniors from any unwarranted or inappropriate use of the drug Depakote to treat their dementia.

Looking forward, it’s time that all off-label settlements by the DOJ or the states include a requirement that the drugmaker pay to correct the misinformation that off-label marketing creates – i.e. that a drug is safer or more effective than it really is. Using lawsuits to fund corrective educational campaigns has a long history, both in public and private sector litigation. (See description here.)

To help stop the inappropriate and potentially harmful overuse of Depakote, Zyprexa, or Risperdal from continuing, doctors should be retrained to undo the misinformation campaigns by Abbott, Eli Lilly, and Johnson and Johnson. Several states, including Pennsylvania and New York have implemented “academic detailing” programs that send independent medical experts, usually nurse practitioners and pharmacists, to provide doctors with the truth about how effective drugs are from an objective, evidence-based perspective. Many state programs specifically address mental health drugs such as Zyprexa and Depakote. Indeed, one of the first of these education programs designed by Dr. Jerry Avorn, who spearheaded the concept in the 1990’s, recommended that a little tender loving care by nursing home staff could reduce the inappropriate use of sedatives, common at that time. A similar conclusion was reached by some nursing homes profiled in an  inspiring Boston Globe article addressing the overuse of Depakote.

– Wells Wilkinson,
Director, Prescription Access Litigation
Staff Attorney, Community Catalyst

The American Medical Student Association (AMSA) will be releasing its fifth PharmFree Scorecard on Thursday, March 8. The PharmFree Scorecard measures how well academic medical institutions are doing at providing an educational (not promotional) environment in which medical students receive their education, by instituting policies to manage potential conflicts with the pharmaceutical industry.

The PharmFree Scorecard evaluates all 152 allopathic and osteopathic medical colleges in the United States and Puerto Rico. It measures 11 metrics, including curriculum, pharmaceutical sales rep access to students, and four metrics on gifts and industry relationships.

PostScript has been covering the Scorecard for four years now, and we are excited to analyze the latest results when they come out on Thursday. To get ready, we took a trip down memory lane:

• In 2008, only 7 schools received an A, and 14 received a B (out of 150 schools). 60 schools received an F.
• In 2009, 45 institutions received an A or B, and one-fifth of the schools improved their policies over the year before.
• In 2010, 78 schools received an A or B, representing one half of all medical schools. 19 schools were still receiving Fs, but that means 41 fewer failing schools than just two years prior.

We hope the race to the top continues!

The updated scorecard will be posted on Thursday at http://www.amsascorecard.org/.  If you’d like to be among the first to hear the results, you are welcome to join the press conference at 11am EST (8am PST) on Thursday:

Toll Free Access Number: 
(559) 726-1000
Participant Passcode:  161471#

Location:  
Hyatt Regency Houston
1200 Louisiana Street, Houston, Texas
Press must check in at AMSA registration desk

– Anna Dunbar-Hester, Policy Analyst

This blog post was made possible by a grant from the state Attorney General Consumer and Prescriber Education Grant Program which is funded by the multi-state settlement of consumer fraud claims regarding the marketing of the prescription drug Neurontin.

Last week Community Catalyst and six California-based senior and consumer groups wrote to the California delegation of the U.S. House in support of a federal system to track the authenticity of prescription drugs.

The letter expressed support for the leadership of Reps. Bilbray (R-CA) and Matheson (D-UT) in sponsoring the Safeguarding America’s Pharmaceuticals Act of 2011 (H.R. 3026). The bill would protect patients from counterfeit and diverted drug products by establishing an FDA mandated national drug identification and tracking system. The letter was signed by the Gray Panthers (statewide and Berkeley-East Bay), the California Alliance of Retired Americans (CARA), Congress of California Seniors, CALPIRG, and CA Citizens for Health Freedom, as well as Community Catalyst.

Prescription drug counterfeiting has become one of the most lucrative crimes in the world. As such, there is no reason not to use modern technology to track the distribution of our vital medications and ensuring that the drug distribution system is secure. The network of businesses that move drugs from manufacturer to the patient is extremely complex, creating opportunities for highly profitable schemes to move stolen or counterfeit drugs into legitimate channels of distribution—and then to patients. These illicit products can be degraded, clinically dangerous, or ineffective, putting patients at risk. For example:

• Cancer and transplant patients were exposed to counterfeit Epogen and generic Procrit in 2002. Criminals netted a profit of $46M and more than 90,000 vials may have reached patients. This was exposed when some patients suffered painful side effects.
• Cancer, cholesterol and other drugs were bought from Medicaid patients on the streets of New York and resold to a wholesaler and then to pharmacies. Two men were convicted in 2008 for the $6.8M scheme.
• Thieves stole 129,000 bottles of insulin in 2009. Stored under unknown conditions, the temperature sensitive drug was sold back to pharmacies and ultimately to diabetics.
• Counterfeit Lipitor™ from Central America was illegally imported and sold into U.S. distribution in 2003.

Drug products move between large wholesalers, smaller wholesalers, large chain drugs stores or small pharmacies. While smaller wholesalers are required to maintain drug ‘pedigrees’ (paper or electronic transaction histories) under federal law, the larger “authorized distributors” of manufacturers are exempt. We need a uniform track and trace system to verify the history of all drugs, throughout each of the distribution channels.

This is of special significance to the state of California, which took the lead on the “pedigree” issue in 2004, when it passed legislation spearheaded by the Board of Pharmacy, CA senior groups and Health System Pharmacists. But the implementation of a state tracking and authentication system was delayed until 2015-17 by subsequent legislation, in order to allow the federal government to create one uniform national system.

Since then, 28 other states have also passed some form of drug pedigree law, but varying provisions make industry compliance complicated and open to abuse. Comprehensive federal legislation like the Safeguarding America’s Pharmaceuticals Act of 2011 (H.R. 3026) would ensure consistency, as well as meet the California legislature’s deadline and goals.

H.R. 3026 would:

• Require manufacturers to place a unique identification number on each package of drugs (the smallest salable unit) bought and sold in the United States.
• Establish an electronic tracking system to allow companies to verify the authenticity of the drugs they buy and sell, and requiring every entity that receives a drug during distribution to perform such authentication.
• Strengthen national guidelines for state wholesaler licensure standards.

Eight years ago, Cesar Arias, a pharmacist and drug inspector for the state of Florida, told congressional investigators:

“No patient in the nation can know with 100 percent certainty that the drugs they are getting are what they are purported to be — or if they are, that they have not been in the trunk of someone’s car, or sitting in a hot warehouse or a crack house in South Florida .”

It is well past time to heed his warning.

– Marcia Hams, Prescription Access and Quality &
Wells Wilkinson, Prescription Access Litigation

Late yesterday, thirty advocacy organizations, representing seniors, labor, providers, patient safety advocates, cancer patients, and consumers joined Community Catalyst in calling for Congressional action to improve the safety of drug manufacturing.  In letters to the Senate HELP and House Energy and Commerce committees, groups urged Congress to make safe drug manufacturing legislation a priority by including new patient safeguards “in the upcoming reauthorization of the Prescription Drug User Fee Authorization Act (PDUFA).” 

Signed by advocacy groups from across the nation and in districts of some key Energy and Commerce committee members, the letters warns that the many recent drug recalls, failed inspections, and manufacturing quality breakdowns by both brand-name and generic manufacturers are likely just “the tip of the iceberg” because most manufacturing problems at overseas facilities go unseen.

The high profile manufacturing problems by Johnson and Johnson, GlaxoSmithKline, and other facilities were discovered primarily by FDA visits to the 2,500 domestic drug manufacturing plants, which are inspected once every two and a half years.  But the number of foreign drug manufacturers has doubled in the last seven years, encompassing approximately 3,800 foreign manufacturers in more than 150 countries.  

This rapid globalization of overseas drug manufacturing has far outstripped the FDA’s capacity to inspect these new facilities, which today are the source of 40 percent of finished drug products taken in the U.S., and 80 percent of active drug ingredients and bulk chemicals used to make drugs domestically.  According to the GAO, under current resources, the FDA can inspect these 3,800 foreign sites only once every nine years.

The letters show that these risks are real, serious, and potentially lethal for vulnerable patients. For instance, the intentional contamination of heparin tragically led to numerous deaths and hundreds of adverse reactions amongst the hundreds of thousands of dialysis or post-operative patients treated with Heparin each year.

We also noted how these risks are not floating under the radar, but are widely known by industry leaders. A 2010 poll of pharmaceutical executives identified “raw materials imported from outside the U.S. as the greatest vulnerability” to the purity and integrity of drug products in the next five years. But progress has been made. Our letter commends how the generic drug industry has “stepped up to the plate” by “agreeing to fund inspections with user fees….” See here and here.

Reform is also widely supported by voters from across the political spectrum. In fact “81 percent of Republicans, 87 percent of Independents, and 97 percent of Democrats support increased FDA authority to issue recalls, destroy contaminated products upon import, and inspect foreign manufacturers” according to a recent poll.

The letter asks Congress to provide FDA with new authority to adequately protect US patients from the increasing risks of counterfeit drugs, a leading black-market enterprise around the world. This would include the ability to issue a recall, or to destroy contaminated, expired, or unsafely manufactured drug products that are seized at the border.

Yesterday, Rep. Michael Burgess, vice chairman of the House Energy and Commerce Subcommittee on Health, announced that reforms to end drug shortages would be included in legislation to renew the system of collecting fees from drug-makers in order to fund FDA review of new drug products. We support efforts to eliminate drug shortages, and improvements to drug manufacturing quality would certainly help. According to the FDA, manufacturing problems were the cause of over half of the drug shortages in 2010. And these problems can be quite serious, with sterile drugs found to be contaminated with “glass shards, metal filings, and fungal or other contamination” according to an FDA report last month. 

Thanks to our partners who joined us in calling for increased safety of drug manufacturing: 

Action for Boston Community Development (ABCD)
AFSCME
Alliance for Retired Americans
Breast Cancer Action
California Alliance for Retired Americans (CARA)
Center for Medical Consumers
Community Catalyst
Connecticut Center for Patient Safety
Consumers Union
Families USA
Florida CHAIN
Health Law Advocates of Louisiana, Inc.
Illinois Public Interest Research Group (Illinois PIRG)
Medicare Rights Center
Mississippi Human Services Coalition
Missouri Alliance for Retired Americans
National Education Association (NEA)
National Labor Alliance of Health Care Coalitions
National Physicians Alliance
National Research Center for Women & Families / Cancer Prevention and Treatment Fund.
National Women’s Health Network
New Hampshire Alliance for Retired Americans
North Carolina Justice Center’s Health Access Coalition
Ohio Alliance for Retired Americans
Pennsylvania Public Interest Research Group (PennPIRG)
TeamstersCare  – Teamsters Union 25 Health Services & Insurance Plan
Texas Alliance for Retired Americans
UHCAN Ohio
USAction
USPirg
Vermont Public Interest Research Group (VPIRG)

In October, the FDA and manufacturers of finished generic drugs and ingredients (Active Pharmaceutical Ingredients or APIs) reached a ground breaking agreement that can (1) ensure the safety of generic drugs and APIs wherever they are produced globally and (2) ensure that new generic drugs become available to patients more quickly.

The drumbeat of manufacturing safety problems occurring in domestic and foreign plants that produce both brand name and generic pharmaceuticals continues must be addressed. In the last week, FDA has cited generic drug maker Mylan and German manufacturer Jenahexal for manufacturing problems, while Ranbaxy settled longstanding concerns in time to launch their generic version of the block-buster drug Lipitor.

Manufacturing failures can create obstacles to the ongoing availability of affordable generic drugs, or even serious risks to patient safety. Thus this new agreement (the Generic Drug User Fee Act or GDUFA) is critical. Addressing the lag in foreign inspections is especially significant, since 80 percent of active ingredients and bulk chemicals used in U.S. medicines now come from foreign countries. Currently, the FDA does not have the authority or resources to inspect all foreign suppliers of drug ingredients. Domestic plants are inspected by FDA on average every 2.7 years. The New York Times recently reported that at its current pace, the FDA would need 13 years to inspect every foreign drug plant exporting to the United States. 

The draft GDUFA agreement is a major commitment by the industry to solve this problem by “ensuring that industry participants, foreign or domestic, who participate in the U.S. generic drug system are held to consistent high quality standards and are inspected biannually, using a risk-based approach, with foreign and domestic parity.” The industry has backed up this commitment by agreeing to provide $300M annually in user fees to provide FDA with the resources to increase inspections and to speed the review of new generic drugs. The fees would supplement FDA annual funding. 
 
Guaranteeing the availability and safe manufacturing of generics is not only critical to patient safety, but also to access to care and to the financial stability of families, health plans and public programs. Today 78 percent of all prescriptions dispensed in the U.S. are generics. In 2008, the average cost of a generic drug was nearly four times less than the brand name equivalent ($35.22 vs. $137.90). Thus, while 78 percent of prescriptions are generics, the total spending on generics accounts for just 25 percent of the total U.S. drug spending, and generics drugs have saved more than $824B over the last decade.

GDUFA can play a role in solving the problem of drug shortages, as well. Shortages can be catastrophic for patient safety, and often affect generics since they account for 78 percent of prescribed drugs. Stepped up inspections at foreign plants can prevent manufacturing problems that can lead to shortages of medically necessary drugs. Health system pharmacists, who confront these problems every day, point out that “user fees can result in faster approval processes for generic drugs” while not sacrificing  patient safety concerns. 

The FDA-industry draft agreement is now being reviewed by the Office of Management and Budget. When approved, it will be sent to Congress for action, probably to be included in the renewal of the Prescription Drug User Fee Act (PDUFA), which deals with user fees for brand-name drug approvals.

- Marcia Hams, Director of Prescription Access & Quality

The special health issue of The Hill has a prescription for ensuring U.S. drug safety.  This op-ed on why Congress must end the inspection disparity between U.S. pharmaceutical plants and foreign drug makers is a must-read for every lawmaker and the consumers of the 4 billion prescriptions filled last year.

Every day, millions of Americans take medicines approved by the U.S. Food and Drug Administration (FDA), bearing the name of some of our nation’s best-known pharmaceutical companies, and prescribed by health care providers. Yet, what most Americans don’t know is that, for most of these drugs, their components were manufactured in facilities that may have never been inspected by a government agency. “In fact, according to a U.S. Government Accountability Office (GAO) report, at least 80 percent of the ingredients in U.S. drugs now originate overseas.  And this could be real cause for concern,” according to the article’s authors, Patricia Benson and Allan Coukell.

The migration of pharmaceutical manufacturing to low-cost countries with low regulatory oversight, such as India and China, may promote counterfeiting, adulteration or other corner-cutting failures to meet quality standards.  This scenario occurred with the adulteration of heparin in 2007. The results were devastating as Benson and Coukell noted: “The FDA would eventually receive reports of 574 Americans who suffered symptoms associated with this tainted medicine, some of whom died, over a three month period in early 2008 – a clear breach of the U.S. supply chain.”

Two key lessons that should be learned from heparin are spotlighted in The Hill piece:

• First, Baxter did not conduct its own audit of the Chinese supplier until three years after they began contracting with this firm. U.S. drug makers must be held accountable for the contractors they choose. They must demand that their foreign suppliers meet the FDA’s rigorous standards— even if it means conducting a meaningful investigation before adding contractors’ goods to a pharmaceutical supply chain.
• Second, the FDA approved the Chinese supplier of heparin without conducting a pre-approval inspection in part because the contractor had a name similar to another supplier in the agency’s database. This example, and others like it, indicates that to provide ongoing oversight of the industries and technologies it regulates, the FDA must modernize old and error-prone databases. In addition, the FDA needs to conduct more inspections of foreign plants that supply drugs and pharmaceutical ingredients for U.S. use. Unfortunately, the agency lacks the resources to visit overseas manufacturing sites with any meaningful regularity.

Now the question is whether Congress is listening.

– Marcia Hams, Community Catalyst Director of Prescription Access and Quality

The buzzword at a Sept. 14 hearing on securing the pharmaceutical supply chain was one not often heard in the current congressional climate: “consensus.” There was general agreement among witnesses that our laws are outdated in a world where the drug supply chain stretches around the globe through a network of suppliers in countries such as India and China.

In 2007 and 2008, the pharmaceutical industry and regulators got a wakeup call when a batch of the blood thinner heparin was adulterated by a Chinese manufacturer, sickening and even killing American patients who took it.

“I believe that adulterated drugs coming into this country is criminal. I think it’s a form of murder,” said Sen. Barbara Mikulski of Maryland. “So we’ve gotta get real, we’ve gotta get serious, and we have to have a sense of urgency.”

The hearing, organized by the Senate Health, Education, Labor and Pensions Committee, is a part of lawmakers’ fact-finding effort for the 2012 reauthorization of legislation on drug user fees.

In testimony, the Generic Pharmaceutical Association supported Health and Human Services Secretary Kathleen Sebelius’ call for congress to update the U.S. Food and Drug Administration’s authorities.

“GPHA is in agreement with the secretary and FDA that it is essential to modernize the laws governing the U.S. supply chain,” Gordon Johnston said. “As noted in my opening remarks, the responsibility of ensuring safety is a shared one that rests with all of us in industry and not just FDA.”

Johnston also referenced the Pew Health Group’s report, After Heparin: Protecting Consumers from the Risks of Substandard and Counterfeit Drugs:  “As my colleagues at Pew noted in their recent report, it’s also critical that manufacturers continue to go beyond good manufacturing practices and assure that their supplier qualification tools are used as well as a risk based assessment to assure the quality and integrity of suppliers abroad.”

In his testimony, Allan Coukell, director of medical programs at Pew Health Group used a photograph of a factory in squalor to demonstrate the horrible conditions of facilities where some drug ingredients are manufactured.

“A couple of speakers have mentioned the need for manufacturers themselves to ensure supplier quality. That’s crucial,” Coukell said. “Sometimes substandard facilities sell to so-called “show” factories – a high-quality facility that sells product that it did not make itself.”

Coukell quoted a China-based pharmaceutical auditor who said American and European companies are misinformed about the identity of all, or part, of their supply chain more than a third of the time.

Potential solutions discussed included strengthening industry quality management, increasing regulatory oversight, and making sure the FDA has the tools it needs, such as the ability to order the recall of drugs.

Sen. Michael F. Bennet of Colorado noted how the testimony at the hearing reflected the notion that updated policies are a necessity.

“I find remarkable the degree of consensus around a lot of the issues we face,” Bennet said. “The lack of a regulatory regime that reflects reality is bad for our consumers and bad for our business. I think that’s why we need to be urgent in fixing it.”

– Marcia Hams, Community Catalyst, Director of Prescription Access and Quality

As more payment data from drugmakers to physicians went public this week, it seems that both industry and doctors are easing off the gas in promotional speaking and other marketing-related payments. With Propublica data, the Boston Globe compared several companies’ payments to Massachusetts providers in 2009 and 2010:

Eli Lilly and Co., one of the nation’s largest drug makers, paid health care providers here $866,919 in 2010 for speaking about their drugs, a 46 percent drop from 2009, according to an analysis by the Boston Globe and ProPublica, a nonprofit online investigative journalism organization. Payments from GlaxoSmithKline fell at least 29 percent to $884,850, and probably more because the company’s 2009 data did not include the first quarter.

And Propublica showed that payments by Cephalon, one of the companies required to disclose payments under a corporate integrity agreement with the U.S. Department of Justice, dropped from almost $9.3 million nationally in 2009 to $5 million last year.

But $5 million — part of the $220 million paid to providers last year by just eight companies — is still a chunk of change for an industry that’s owed billions of dollars over the last five years for illegally marketing to docs and is still struggling to reinvigorate its pipeline.

And though many medical schools around the U.S. have barred or limited faculty members from joining pharma speakers bureaus out of concern that the practice (in which physicians are paid to deliver company-generated talks to other doctors) creates bias or the appearance of it, some providers are still very willing to sign on. Pain physician Jeffrey Gudin from New Jersey,  a speaker for J&J last year, talked to the Star-Ledger.

“I support education from any source,’’ Gudin told the Star-Ledger, “even when it’s pharmaceutically funded.’’

And even, one might note, when that pharma-funded “education” is supporting him back.

But as trends go, hard and fast correlations here are murky to untangle, mostly because the data is a very incomplete set – different amounts and categories of payments are publicly available only from about 12 of the more than 70 drug makers that market in the U.S.

The Globe and Propublica stories today point to some other complicating factors: the shift from a largely in-person marketing game to one focused more and more around online and electronic interaction with prescribers; industry contract and conference cycles that may skew comparisons of quarter-by-quarter financials; the disinfecting disincentive for a physician to be publicly linked to a company’s marketing team; and companies’ own efforts to make sure they’re being recognized for their innovation and legitimate scientific collaborations, not for their speakers bureaus.

From the data in Massachusetts, it does seem like a combination of stronger conflict of interest policies at the leading medical schools and teaching hospitals there, as well as the state’s own disclosure law, may have combined to reduce the number of physicians willing to sign on to drug companies’ payrolls, or the amount companies are willing to pay those who do.

But as Allan Coukell of the Pew Health Group pointed out to the Star-Ledger, this database of court-ordered and voluntary disclosures is still only a fraction of the story — a few frames of a much larger picture we’ll need Sunshine to develop.

–Kate Petersen, PostScript blogger