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Caremark, one of the nation’s largest pharmaceutical mail-order companies agreed to pay $500,000 to settle a state regulatory investigation into its practice of restocking unopened prescription drugs, Illinois officials confirmed Friday.

The developments come more than a year after Attorney General Lisa Madigan’s office had launched an investigation into whether Caremark routinely and illegally sold drugs that had been returned by other customers. That investigation is ongoing, sources close to the investigation said.

Illinois officials have said reselling prescription drugs is allowed under very limited circumstances, typically when the drugs have not left the supervision of trained medical staffers, because the products may be tampered with or damaged.

So here’s the question: Why is it illegal when Caremark does it, but not illegal when the same dangerous behavior is pro forma with the foreign Internet pharmacies so beloved by Illinois Governor “Wrong Way” Rod Blagojevich?

When is illegal not illegal? Unfortunately, it seems that the answer is “when it’s covenient.”

On the House

  • 01.21.2006

Here is the house editorial from today’s Washington Times …

New FDA rules

The Food and Drug Administration this week took sensible steps toward 21st-century medicine by requiring that prescription-drug package inserts be more readable and less threatening. Drug companies initially wanted to keep the current mumbo-jumbo of chemistry and legalese for fear of lawsuits.

But the FDA persisted, maintaining reasonably and courageously — particularly in this era when a single senator from Iowa knows he can spuriously trash the agency about heartworm medicine and get media coverage — that an FDA approval is not just a minimum standard of safety. It is an evaluation, based upon the best science available or the relative risks and benefits of each medicine. Failure to clearly convey both aspects of a medicine could “discourage appropriate use of a beneficial drug.” Further, the FDA signaled that the package insert is a temporary method for providing consumers and doctors information, in an era when new insights into the best use of medicines are now being revealed through the use of genetic tests and post-market studies analyzing genetic variations in drug response. (The labeling information will be updated daily for free at the National Library of Medicine at

Finally, the FDA makes clear that it will assert its authority defended vigorously by the Clinton administration and upheld by several circuit and appellate courts — as the ultimate authority about what makes a medicine safe and effective. Too often trial lawyers seeking to make a quick buck at the expense of an individual who unfortunately suffered from a side effect of a medicine has sought to second-guess both the judgment of the FDA and safety warnings in an effort to obtain significant damages. The FDA serves notice that if there is going to be any “individualized reevaluation of the risks and benefits of a product” it will be as a result of new scientific information.

The agency will oppose any lawsuit that contends a jury or state law somehow has a reservoir of superior medical knowledge or authority for imposing additional safety standards beyond those required under FDA regulations.

Critics will claim that the FDA is often misled and it takes lawsuits to set things right. Yet all the lawsuits, as well as the grandstanding efforts of New York Attorney General Elliot Spitzer against the makers of Paxil, were based on clinical trial data from the FDA itself and from studies that were widely available.

The new FDA labeling rule will make information widely available in real time and link it to the label if need be, shedding light and advancing public health.

Kaiser Rolls

  • 01.20.2006

The folks at the Henry J. Kaiser Foundation must be getting desperate if they need to purposely misinterpret me. Here’s what they said …

Letter to Congress From Schwarzenegger Could Spur Action on Prescription Drug Reimportation, Some Observers Say

A letter California Gov. Arnold Schwarzenegger (R) sent to Congress this month urging it to approve legislation legalizing the reimportation of medicines from abroad could lead to prescription drug legislation this year because of California’s “size and influence,” some experts say, the Christian Science Monitor reports. Peter Pitts — a former associate FDA commissioner and current vice president for health affairs at the public relations agency Manning, Selvage & Lee — said that Schwarzenegger’s letter is “really important” because it represents “an acknowledgement from the largest state (by population) in the Union that this issue is a federal one” that needs to be addressed by Congress and not at the state level. Schwarzenegger has vetoed four reimportation bills because he is “concerned that quick legislative fixes at the state level would be contrary to federal law and over-simplify the complex safety, trade, supply and pricing issues involved” (Wood, Christian Science Monitor, 1/18).

Boy is that reading the Christian Science Monitor with rose-colored glasses. The quote is accurate. I did say (and I do feel) that Governor Schwarzenegger’s statement that importation is a Federal issue is very important — but not because I support the idea of bringing in unsafe, unregulated, often counterfeit drugs — but rather because it sends a strong message to folks like Wrong-Way Rod Blagojevich and DC Comics Councilman David Catania that just because a state or local pol says foreign drugs are safe doesn’t make them so. That’s the FDA’s job. That’s what Arnold said. And that’s why it’s important.

Here’s a link to an article I penned in Sacramento’s Capitol Weekly. If I leave any room for doubt as to where I stand or what I think on this issue — please let me know.

Download file

I think that the people at Kaiser must have their pointy helmets on too tight.

The Wall Street Journal reports that an FDA reviewer has recommended against GlaxoSmithKline’s being allowed to sell its weight-loss drug, Xenical™, over-the-counter. The company wants to sell a less potent version of the prescription medicine. According to the reviewer, the resulting weight loss would be modest and “transient”. That is, “it would not afford any long-term benefit through a change in behavior….”. The drug also benefits blood pressure, lipids, and fasting glucose (according to the FDA).

I’m no scientist, but if the FDA is not going to allow a drug maker to sell an OTC obesity med until they identify a drug that can change people’s behavior, or reduce weight with zero chance of putting it on again, Americans will never have the range of choices they need to deal with their growing waistlines.

GlaxoSmithKline understands this. It plans to call the drug “Alli™”, as in, “allied” with diet and exercise. The marketing campaign will undoubtedly encourage people to use the drug along with lifestyle changes. What good would it do the company for people to take the pill, but not lose weight because they do not exercise or eat better? They will stop taking the pill and badmouth it to their friends.

The marketing campaign would surely also be more effective than government programs to combat obesity (as my colleague, Diana Ernst has addressed). Meanwhile, Americans have a plethora of dietary and herbal supplements targetted at obesity, but no OTC medical option.

Here is a better option: let the FDA recommend against OTC Alli™, but allow GlaxoSmithKline to sell it, including the FDA’s negative recommendation on the label. Then, let the patients decide.


Ernst, D. 2005. Obesity and the State: The Skinny on the War Against Fat, December (Health Policy Prescriptions). San Francisco, CA: Pacific Research Institute.

Dooren, J.C. 2006. “FDA Questions the Benefits of Over-the-Counter Xenical,” Wall Street Journal, January 20.

Professor Philip Romero of the University of Oregon, and economic advisor to former California Governor Pete Wilson, has just issued a damning report on the negative welfare consequences of normalizing the illegal diversion of prescription drugs into the U.S., as recently proposed by Governor Schwarzenegger. Basically, stripping away drug makers’ rights to enjoy the fruits of their own invention will deestroy investors’ willingness to risk their capital in California’s biotech industry. Up to 100,000 biotech jobs will be lost in the Golden State and $3 billion in economic growth. That’s a heck of a price to pay for a policy that won’t even result in lower-priced drugs in the long term!

The new physician-label rule announced yesterday by the FDA is certain be one of the most important health care stories of 2006. To quickly recap:

Revised for the first time in more than 25 years, the new format requires that the prescription information for new and recently approved products meet specific graphical requirements and includes the reorganization of critical information so physicians can find the information they need quickly. Some of the most significant changes include: A new section called Highlights to provide immediate access to the most important prescribing information about benefits and risks; A Table of Contents for easy reference to detailed safety and efficacy information; The date of initial product approval, making it easier to determine how long a product has been on the market; A toll-free number and Internet reporting information for suspected adverse events to encourage more widespread reporting of suspected side effects; A key-facts section that prompts doctors on what they should tell patients.

The other important piece of yesterday’s announcement is the rule’s preamble where the FDA restates its long-standing position (“long-standing” meaning that the agency has had the same position in both Republican and Democrat administrations) on Federal preemption (for more on this see the blog below with the header, “Quis Custodiet ipsos Custodes?”).

So we can, broadly speaking, divide the announcement into two parts, the label and the preamble. Here’s how some major media chose to use their words (literally):

Washington Post (Marc Kaufmann): 841 total words; 530 words on the preamble.

Los Angeles Times (Nick Timiraos): 583 total words; 236 words on the preamble.

Marc and Nick win the prize for most percentage of words focused on the political rather than the public health story. And they win BIG when you consider the rest of the sample:

New York Times (Gardiner Harris): 1002 total words; 246 words on the preamble.

Wall Street Journal (Heather Won Tesoriero & Anna Mathews): 1109 total words; 150 words on the preamble.

Chicago Tribune (Peter Gorner): 532 total words; 32 words on the preamble.

Associated Press (Andrew Bridges): 660 total words; 124 word on the preamble.

Draw what conclusions you will.

My vote for best story goes to the New York Times with special kudos to the Constant Gardiner.

I just attended (via phone) the FDA’s press conference on the long awaited physician-labeling rule. A few observations:

1- Clarity saves lives. According to the FDA, approximately 300,000 preventable adverse events occur in hospitals in this country, many as a result of confusing medical information. Research shows that prioritizing the warning information has a greater impact on reducing such events. Therefore, the new prescription label format provides the most important information about a prescription product in a format that is better understood, more easily accessible and more memorable for physicians.

2- We have hit a point of information overload. And as Surgeon General Carmona stated, “The problem is compounded by prescription medication information that reads more like legal disclaimers than useful or actionable health information.”

3- As Deputy Commissioner Janet Woodcock pointed out, the new label must be a tool to assist doctors in counseling their patients. To wit, a new section of the label designed specifically for this purpose.

4- The urgency of e-tizing. As Deputy Commissioner Gottlieb pointed out, being able to access label information that is up-to-date, user-friendly, and on-line will put the right information in the hands of the right people at the right time.

5- Media seems to have their eyes on the prize. Early news reports crossing the wire (particularly the AP story by Andrew Bridges) are getting the story right.

I’m still waiting to hear about Senator Grassley’s statement congratulating FDA on this announcement.

Phone lines are now open.

Are you sitting down?

Today’s edition of the Christian Science Monitor carries a 900+ word article on drug importation that’s … balanced!

A timely and thoughtful story on pharmaceuticals in this publication is important — and not because of it’s arcane theological irony. The Monitor has, generally, been on the sidelines of the drug importation issue and this, its first long piece on the topic, is balanced, comprehensive and timely. Quite the trifecta.

Here is a link to the entire article:

Download file

Some selected pull quotes to entice you to read the whole story …

“While prescription-drug costs in the US continue to grow at a faster rate than any other category of healthcare expenditure, he [Governor Schwarzenegger] said, residents of Canada, the European Union, and millions of others around the world pay less … because their governments impose price controls that effectively shift the financial burden of research and development to the US.”

“Schwarzenegger’s letter to Congress is a really important development because it is an acknowledgment from the largest state [by population] in the Union that this is a federal issue and one that needs to be dealt with by Congress rather than on the state level,” says Peter Pitts, a former associate commissioner at the US Food and Drug Administration (FDA), now vice president for health affairs at the public relations agency Manning, Selvage & Lee.

“The consumer can’t be sure of what he is getting or from where, and there is no relationship with a pharmacist who can review the entire profile of drugs someone is taking,” says Brian Meyer, director of government affairs for the American Society of Health-System Pharmacists.

“Legalizing prescription-drug imports would cause drugmakers to raise prices abroad, not to lower them in the US, others note. John Graham, director of healthcare studies at the Pacific Research Institute in San Francisco, says such was the case with programs in Minnesota and Illinois.”

At a Christian Science Reading room near you.

The Wall Street Journal has disclosed an interesting way that research-based and generic companies are settling patent disputes. Rather than duking it out in court, the research-based company agrees to let the generic company compete after a certain number of years. For example, if a drug’s patent has 10 years to run, but a generic company alleges that the patent is invalid, the inventing company will agree to let the generic manufacturer compete in 5 years. Is this collusion or co-operation that benefits the public? I’d say the latter. It’s certainly better than what was (allegedly) happening before.

Patents on prescription drugs are handled a little differently than patents on mousetraps, because they involve the FDA and not just the courts. If a generic competitor can prove that a patent is invalid, the FDA gives that first generic competitor the exclusive right to sell it’s version for 6 months, before it licenses other generic competitors’ copies. This gives a generic competitor with a strong case an incentive to attack the weak patent, which it would not if it had to share the spoils with other generic manufacturers.

A while back, it was alleged that these generic competitors would then negotiate payoffs from the research-based competitors, in return for which they would promise actually not to launch their versions for some time. Obviously, this simply transferred wealth from one company to another, with no benefit to public welfare. When this came out, I thought that a good solution would be to require a generic first mover who earned such a license to start shipping its products within a short time of the FDA approval, or lose its exclusivity.

This new situation is better, because it saves money otherwise spent on litigation, reducing costs to both generic and brand-name competitors. Although not immediately apparent, these savings result in lower drug prices. (I promise!) Of course, whether the generic would have been able to sell its medicine tomorrow, instead of 5 years from now, will never be known - nor whether it would have lost and been forced to wait for 10 years.

Although there are dazzlingly complex theoretical models of the welfare effects of patents, I’ve never been convinced that there is a satisfactory, empirically tested hypothesis demonstrating the optimal length of a patent. (Actually, I don’t think there ever will be. We don’t actually know how much money is spent on patent litigation, which would be necessary data for such a test.)

Nevertheless, the benefit of such negotiated agreements is that the parties with the best information decide the strength of the patent, not courts or government agencies. That, in itself, is a good sign that it improves public welfare.


Abboud, Sheila. 2006. “Branded Drugs Settling More Generic Suits,” Wall Street Journal, January 17, p. B1.

One DC truism is that the most dangerous place to be in Washington is between Senator Charles Schumer and a camera. With that as our point of departure, this news item:

Senator Charles Schumer has sent a letter to federal officials calling for more oversight of the tissue transplant industry and for a full accounting of how possibly tainted tissue may have ended up being used in patients. The New York Democrat said in a letter to the acting head of the Food and Drug Administration, Dr. Andrew von Eschenbach, that he was “deeply disturbed” by reports of a Brooklyn funeral home selling body parts without proper consent to a New Jersey firm, Biomedical Tissue Services, which then sold it to five other tissue banks. “There are so many unanswered questions,” Schumer said yesterday. “We’re turning the heat up on the specific cases and on how the industry is regulated. I would like the FDA to provide a full accounting of where the breakdown in the system occurred in each of these cases.”

Followed, of course, by the unfortunately inevitable “no comment” from the FDA.

Why unfortunate? Because the FDA is already on these gravediggers (the FDA in October issued a letter recalling the tissue, saying it was improperly screened) and the right and appropriate comment would have been something like, “We aim to pursue these people with everything we’ve got” — or something to that effect. Because, truth be told, both FDA’s resources and authority are limited.

Mr. Schumer said he also wanted to see more FDA oversight of the estimated $1 billion tissue bank industry, which he said in the letter “is especially subject to impropriety due to the profitability of tissue trade.” Well, amen to that. Rather than allowing Senator Schumer to grab some quick headlines with an FDA-bashing story, the agency should applaud his call for greater resources and authority — and then ask him to make it happen.

I’m sure the senior Senator from New York wouldn’t mind sharing the spotlight.

Yeah, sure.


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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