Latest Drugwonks' Blog

Rhode to Nowhere

  • 11.03.2005

Say bye-bye to Canadian drug buys (
Jim Baron, Times staff reporter

PROVIDENCE — Rhode Island’s brief experiment with licensing Canadian
pharmacies to dispense cheaper prescription drugs here is apparently
over before it started. “It’s more or less a dead issue,” Don Williams, the state Department of Health’s associate director for health services regulation said on Tuesday.

The General Assembly passed a measure in 2004 allowing DOH to license
drug stores from Canada to sell pharmaceuticals in Rhode Island and Gov. Donald Carcieri allowed it to become law without his signature. But regulations promulgated by DOH to assure the quality and safety of the medicines made it too burdensome and expensive to be worthwhile to any pharmacies north of the border. “It was impossible to implement,” Williams said.

Initially, four pharmacies from various Canadian provinces applied for
licenses, Williams said. But when he returned the applications with
information about the new regulations, he said, none sent their
applications back. Williams said the law gave DOH a charge to ensure that drugs being re-imported to Rhode Island from Canada were as safe and effective as those bought in the United States. Since different Canadian provinces have different regulations, he said, “By the time we put on all the requirements we needed to put our blessing on it, it didn’t make sense for the Canadian pharmacies to try to get a license.”

“We were afraid that was going to happen; we hoped we would get proved
wrong,” said Jessica Buhler, project director for the Senior Agenda
Consortium, a group that fought the regulations when they were proposed. “That was the whole point of doing the regulations, that the pharmacies wouldn’t apply.” Buhler said the consortium and the Gray Panthers are considering what to do about the problem of the regulations making the cost of doing business here prohibitive for Canadian pharmacies. Richard Bidwell, president of the Gray Panthers of RI, said, “the Health Department went out of its way to create regulations that would kill the law. I don’t think they should have done that.”

Williams said DOH has “made a policy decision” not to try to stop
individual Rhode Islanders who by mail, phone, the Internet or other
means try to obtain prescription drugs from Canada. “If individuals want to assess the situation and think it makes sense to buy drugs from Canada and they are happy with the safety, we are not going to impede that,” Williams said. “But if someone tries to establish a retail outlet, that we would go after.”

Bidwell says he buys his prescriptions in Canada through a storefront
office called Canadian Direct Discounters on Post Road in Warwick. “They will give you prices and handle the paperwork,” he said, put purchasers pay the pharmacy directly with a credit card. There is a similar business called Canada Drug Service on North Washington St. in North Attleboro, he said. Bidwell said he has yet to determine whether it will be cheaper to continue buying prescriptions from Canada once the new Medicare Part D drug program is implemented. “I’m not sure what the dollars and cents are going to add up to,” he said Monday. “It may well end up costing more to be on Medicare Part D than buying medicine in Canada.”

Secretary of State Matt Brown set up a website,, that
offers prescription drugs from international pharmacies at a savings of 30 to 65 percent under the retail price. Prescription drugs are cheaper in Canada and certain other countries because the governments there have implemented price controls that have not been imposed in the United States. In many cases, drugs manufactured in America and sold to foreign countries that have price controls can be re-imported and still be cheaper than the prices charged in U.S. drug stores.

Here’s my testimony from today’s FDA Part 15 hearing on the future of DTC. My thesis — what does DTC want to be when it grows up — and how will FDA help?

Download file


  • 11.01.2005

And here is a video link to C-SPAN’s coverage of the hearing.

Download file

Generics Jihad

  • 11.01.2005

Bob Goldberg’s article on branded generics in last Wednesday’s Washington Times generated this reply from Kathleen Jaeger, President and CEO of the Generic Pharmaceutical Association. I thought the letter was foolish — Bob (not surprisingly) had a stronger reaction.

First Ms. Jaeger …

I read with interest Robert Goldberg’s views (“May Reagan GOP R.I.P.,” Op-Ed, Wednesday) on the Senate Medicaid proposal regarding brand products that are masquerading as generics, also known as “authorized generics.” To be clear, authorized generics are brand products marketed under a different label by the brand company or a third-party distributor. Mr. Goldberg is proposing a double standard for the brand industry. On the one hand, he wants authorized generics to be considered generics by the Centers for Medicare and Medicaid Services (CMS) for purposes of the agency’s best price calculation, which is the lowest price at which CMS purchases medicines. On the other hand, he wants authorized generics to be considered brand products so they can bypass the Food and Drug Administration’s rigorous generic drug approval system and take advantage of a loophole in the federal law known as the Hatch-Waxman Act. One provision in the Senate Medicaid proposal would clarify CMS’ treatment of authorized generics to ensure that the federal government is not overpaying for these medicines. Currently, brand companies obtain a major windfall by not including in their CMS best-price calculation brand products that are dressed up as generics to the detriment of the federal and state government programs. In other words, when it comes to federal reimbursement, the brand company benefits by calling the “authorized generic” a generic product. Mr. Goldberg’s views would indicate that this overpayment is an acceptable practice that taxpayers should embrace. While there are other issues of concern in the Medicaid bill currently under consideration in Congress, this provision would clarify the inconsistencies in the treatment of these brand products. The brand industry can’t have it both ways.

And here is Bob’s response …

Very interesting, a brand drug which has already received FDA approval after going through 15 years of review which then goes generic undergoes a less rigorous review than a copy of that product which only has to show that it shows up in the blood at the same levels in a handful of people a generic firm puts up in a hotel room? As for best price, once a generic version of a product hits the market, the brand product loses market share. The total cost to consumers — including the government, goes down. The only losers are the generic companies who, having spent a few hundred thousand suing drug companies to challege their patent, don’t get a crack at the six months of monopolistic pricing and the millions the Hatch Waxman law affords them for challenging the originator patent. The return on the investment the generic firm makes in lawyers is about 3000 percent. Generic firms who challenge patents get competition all the time and even share market exclusivity. They just don’t want more competition. Pretty amusing and hypocritical from an industry that prides itself on promoting competition in the first place. Ms. Jaeger’s letter is fiction masquerading as truth.

First the good news — congressional conferees approved the FY 06 Agriculture Appropriations conference report that includes $1.5 billion for FDA, $40 million above the current fiscal year. Now the bad news — that’s $10 million less than the President requested. Now the good news — missing from the conference report is House language regarding importation of prescription drugs. Now the bad news — retained in the conference report was (compromise Senate)language on conflict of interest waivers for FDA advisory committees. That amendment says none of the agency’s funds may be used to grant a waiver of a financial conflict of interest requirement for any voting member of an advisory committee or panel or to make a certification for any voting member. Now the good news (sort of) — the ban does not apply if (1) not later than 15 days before an advisory committee or panel meeting the HHS Secretary discloses on FDA’s Web site the nature of the conflict of interest at issue and the nature and basis of the waiver or certification, or (2) in the case of a conflict of interest that becomes known to the HHS Secretary less than 15 days before a meeting, the Secretary discloses it as soon as possible, but in no event later than the day of the meeting. In addition, none of the agency’s funds may be used to make a new appointment to an FDA advisory committee or panel unless the FDA Commissioner submits a quarterly report to the HHS Inspector General and the House and Senate Appropriations Committees on efforts made to identify qualified persons for such appointments with minimal or no potential conflicts of interest. That’s a whole lot more paperwork for an already overworked and understaffed agency that didn’t even get the full appropriation requested by the President. You want FDA reform? Show me the money.

Patent Nonsense

  • 10.31.2005

Here’s a worthwhile article by Alec Van Gelder of the London-based International Policy Network (as seen in today’s Boston Globe).

Patent nonsense on avian flu
By Alec van Gelder

WITH ALL the hysteria surrounding the possible mutation of the Avian flu virus into a form that puts humans at risk, policymakers have subjected us to everything — except common sense. There are no easy solutions to the outbreak that is predicted, and more deaths are likely. Misleading the public and ignoring the outcome of myopic actions is simply not acceptable with millions of lives at stake.

At least 65 people have already perished from a strain of Avian flu called H5N1, contracted from close contact with poultry. A further 100 are believed to be infected. The virus has spread west from Southeast Asia to Turkey and Russia, carried by migrating birds. Those most at risk are people who work closely with poultry in unsanitary, cramped conditions: By definition, these people are poor.

So far, there is no proof that a strand of H5N1 can spread between humans, nor that it will. Yet the hysteria surrounding Avian flu far surpasses that which accompanies the yearly arrival of a new flu strand, which regularly kills hundreds of people. And it far surpasses the attention given to other diseases, such as diarrhea, which claim at least 3 million lives a year in poor countries.

The reason for this hysteria is the prediction that, if this virus mutates into a form transmissible between humans, tens of millions will be at risk — as in the 1918 pandemic that killed 50 million to 100 million people. But what is the rational response to such predictions?

We know that viruses mutate and strike in unpredictable ways. It is plausible that this virus might mutate as has been predicted and that an epidemic — or even a pandemic — might result. Since we cannot predict exactly how, where, or when the virus might mutate, we need a response that is both preventative and adaptive.

Preventative measures might include vaccinating those likely to become infected with both H5N1 and conventional influenza viruses. This would reduce the chances that H5N1 could acquire genes that would enable it to be transmitted between humans.

Adaptive measures might include identifying potential vaccines and treatments for H5N1 and ensuring that these are available for use when necessary.

So far only one medicine has proved effective in treating human cases of H5N1. That medicine, Tamiflu, was developed by the Switzerland-based pharmaceutical company Roche, which owns the patent. Because of the pressure to “do something,” politicians are considering breaking Roche’s patent on the populist premise that this will increase the availability of Tamiflu.

While it makes sense to build government stockpiles of Tamiflu in preparation for a possible outbreak of H5N1, it is far from clear that breaking the patent would be helpful — indeed the opposite is more likely to be the case for several reasons.

First, the raw ingredients for Tamiflu come from a Chinese herb which is in short supply. Unless production of the herb is increased, it will be impossible to increase production of Tamiflu. In this case, breaking the patent would have no impact on availability of the drug.

Second, Tamiflu is difficult to manufacture. Since Roche has developed the manufacturing expertise, it seems sensible to encourage Roche to increase production and/or to help other companies produce the drug under a voluntary license. Breaking the patent through a compulsory license would actively discourage Roche from either producing the drug or lending its expertise, which would be directly counterproductive.

Third, given that scientists have only a vague idea of what a human strain of H5N1 might look like, there is no certainty that Tamiflu will be effective. Even if Tamiflu does work on some people, widespread use would inevitably result in the development of resistant strains. So, either way, alternatives are clearly needed.

Yet if governments break the patent on Tamiflu, no pharmaceutical company is going to want to develop a new antiviral for fear that their expensively developed innovative medicine will simply be stolen without adequate compensation for the tens or hundreds of millions of dollars invested.

In light of the potential threat posed by a human strain of H5N1 or other similarly deadly viruses, there are constructive things that governments could do. First, they could offer to purchase large quantities of vaccines or antivirals that meet clearly defined criteria. Second, they might also offer tax breaks to companies that choose to invest in the development of relevant drugs.

But the most important role for government is to uphold private property rights and ensure that the rule of law applies — which means protecting rather than breaking patents. The alternative — the rule of the mob — would truly be devastating.

Alec van Gelder is a research fellow specializing in technology issues at the International Policy Network in London.

In case you’re not a regular reader the China People’s Daily, here’s an important story with potentially significant implications for DSHEA. Tongjitang Pharmaceutical Co. Ltd. of southwest China’s Guizhou Province signed a contract with Synarc, a US professional drug test service provider, in Beijing on Tuesday. Synarc will carry out clinical curative effect test on a traditional Chinese medicine to treat osteoporosis. It is for the first time a Chinese herbal medicine to be tested in line with western clinical curative effect standards, Qi Guomin, official of Ministry of Health, told Xinhua on Wednesday. Some of the Chinese traditional medicines have passed the FDA’s safety test and been sold as “health food” in western countries, Qi said. The test will be carried out in China under FDA’s criteria and the result will be released in 2006. Note to Congress: When contemplating FDA reform don’t forget the urgent need to reform DSHEA — it’s more than just a stadium in Queens.

New data from IMS Health projects that prescription drug sales will “soar” in the United States next year, fueled in part by a $400 billion expansion of the nation’s Medicare program. IMS forecasts that the U.S. drug market, which already accounts for 43 percent of global pharmaceutical sales, is projected to grow between 8 percent and 9 percent in 2006. Not surprisingly, the media stories have neglected to mention why — or why this is a good thing for the future of the American consumer and the American health care system. The answer is simple — and simply crucial to the macro debate: people with prescription drug coverage use more medicines than those without. Ergo, more people covered equals more medicines sold. Common sense, right? And they’re being sold for the right purpose, because prescription drugs are not an impulse purchase. Despite what politicians, pundits, and so-called advocates would like you to believe, poll after poll of physicians shows again and again that doctors are not prescribing medicines at the request of advertising-bedazzled patients. That is just not true. Period. Docs are prescribing medicines because their patients have conditions that call for pharmaceutical intervention. But the media reports of the IMS data don’t mention any of this and would lead you to believe the opposite. All the reporters seem to be interested in is volume and costs — making it a political rather than a public health story. But, alas, they fail to put either volume or cost into the proper perspective. Nowhere do they explain the underlying rationale that it is far cheaper to treat a chronic condition such as hypertension or diabetes than to pay for the acute manifestations of these diseases (heart attacks, strokes, amputations, etc.) And how do you keep a chronic condition from becoming acute? That’s right, through appropriate use of … medication. That’s the raison d’etre of Medicare Modernization. More drugs, appropriately prescribed and used as directed lower health care costs. And that’s the rest of the story.

TiVo Goldberg

  • 10.27.2005

Bob Goldberg’s latest …

Yesterday, the House of Representatives took the bold
and courageous step of limiting the amount of money
you and I will get from the federal government to pay
for converter boxes that will allow us to switch our
televisions to digital.

In other words, while the GOP decided to spend only
$1 billion which includes several hundred million for
“education (maybe a government toll free number to
walk people through installation and how to use Tivo)
the Dems wanted to spend $4 billion for every
household in the universe. Congressman John Dingell
railed against GOP heartlessness and asserted the $40
cost of the box was a TV tax against the working
poor …

My guess is that most Americans will pocket the money
and spend it on the low cost digital TVs that will
flood Wal-Mart, Costco, etc over the next three years,
which will be on top of the converter rebates cable
companies will offer.

The idea that tax dollars would go to subsidize TV
purchases is almost mind numbing particularly in light
of the fact that the same Congress is hell bent on
saving money on prescription drugs by limiting access
to the newest drugs, destroying generic competition
and slapping price controls on what’s left.

(See my latest rant at

In otherwords, Congress will spend $4 billion so
people can watch Desperate Housewives or the New York
Yankees in high definition (not a bad thing by
itself)but will reduce the amount it spends on better
and newer medicines. Which reminds me of what Mark
Twain once wrote: “G-d made idiots for practice. Then
he made Congress.”

Good news as reported in today’s WSJ article on the meeting of the FDA’s Psychopharmacologic Drugs Advisory Committee — The Food and Drug Administration convened the panel (to discuss an agency proposal that drug makers submit “longer-term efficacy data” on drugs that are used to treat depression, bipolar disorder, schizophrenia and a range of other psychiatric illnesses before they are put on the market.) The panel voted 12-0 against a proposal to require premarket long-term efficacy data for drugs that would treat major depressive disorder. The panel didn’t vote on other psychiatric disorders, but said the FDA should consider each illness separately before implementing a “one-size-fits-all” policy for psychiatric drugs.

This deliberative dozen is helping to disprove the old maxim that “Sanity calms, but madness is more interesting.” If only the same were true in Congress and the media.


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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