Bill on generic drugs stalls

Cornyn’s flip-flop votes il­lus­trate lob­by­ing bat­tle

Houston Chronicle Sunday - - FRONT PAGE - By Kevin Diaz

When the price of Dara­prim shot up from $13.50 to $750 a pill in 2015, doc­tors and pa­tient ad­vo­cates were shocked be­cause the pa­tent on the decades-old AIDS drug had ex­pired long ago.

Even if a generic drug maker had wanted to de­velop a cheaper al­ter­na­tive, ex­ec­u­tives at Tur­ing Phar­ma­ceu­ti­cals — the drug com­pany founded by con­victed hedge fund fraud­ster Martin Shkreli — made clear that they had no in­ten­tion of mak­ing Dara­prim avail­able to ri­val com­pa­nies to make their own ver­sions.

The pub­lic out­cry over the drug’s 5,000-per­cent price hike led to me­dia ac­counts of Shkreli as “the most hated man in Amer­ica” and helped gal­va­nize a na­tional de­bate over pre­scrip­tion drug prices.

Now a broad-based ef­fort to hold down drug prices and bring new generic med­i­ca­tions to the mar­ket has put Texas U.S. Sen. John Cornyn in the spot­light of a high-stakes lob­by­ing bat­tle as bil­lions of dol­lars hangs in the bal­ance for both in­vestors and tax­pay­ers.

Cornyn, the No. 2 Repub­li­can in the Se­nate, abruptly changed his “aye” vote sev­eral hours af­ter a cru­cial Ju­di­ciary Com­mit­tee meet­ing that ad­vanced a bi­par­ti­san bill to in­crease generic com­pe­ti­tion. Cornyn’s switch to “nay” didn’t change the out­come of the 15-6 vote, but it sig­naled that con­sen­sus may still be dif­fi­cult to reach in the Repub­li­can-con­trolled Congress.

Cornyn has lauded the

“over­all goal” of the so-called CRE­ATES Act, which would give generic drug com­pa­nies more lever­age in the Food and Drug Ad­min­is­tra­tion ap­proval process, in­clud­ing the right to sue brand drug man­u­fac­tur­ers that use tac­tics like Tur­ing’s to sti­fle the de­vel­op­ment of cheaper generic al­ter­na­tives.

But con­cerns about trial lawyer abuses have caused Cornyn, a Repub­li­can leader in the de­bate, to hold out for changes that would limit court reme­dies and raise the stan­dard of proof for al­leged anti-com­pet­i­tive prac­tices.

“What I’m con­cerned about is pro­vid­ing un­in­tended in­cen­tives for friv­o­lous lit­i­ga­tion for the sole pur­pose of ex­tract­ing nui­sance set­tle­ments or oth­er­wise mak­ing it hard to ad­dress our goal, which is to pro­mote generic al­ter­na­tives,” Cornyn said in the June 14 com­mit­tee hear­ing.

Generic drug lob­by­ists fight­ing to win pas­sage of the CRE­ATES Act say Cornyn’s pro­posed amend­ment would weaken the bill and cre­ate reg­u­la­tory loop­holes for preda­tory prac­tices.

“The Martin Shkrelis of the world could drive a dump truck through this,” said Michael Brz­ica, vice pres­i­dent for fed­eral govern­ment af­fairs at the As­so­ci­a­tion for Ac­ces­si­ble Medicines, the main group rep­re­sent­ing the generic drug in­dus­try.

Lob­by­ists slow the process

De­spite back­ing from more than two dozen se­na­tors across the po­lit­i­cal spec­trum — in­clud­ing Texas U.S. Sen. Ted Cruz — the cur­rent ver­sion of the CRE­ATES Act has lan­guished in a pro­tracted leg­isla­tive duel be­tween two well-funded phar­ma­ceu­ti­cal lob­bies.

On one side is the prin­ci­pal phar­ma­ceu­ti­cal lobby known as PhRMA, which has spent nearly $36 mil­lion lob­by­ing Congress in the last two years on be­half of mak­ers of brand name drugs. On the other side is the As­so­ci­a­tion for Ac­ces­si­ble Medicine, which has spent $4.5 mil­lion on fed­eral lob­by­ing dur­ing the same pe­riod, ac­cord­ing to the Cen­ter for Re­spon­sive Pol­i­tics.

PhRMA ex­ec­u­tives, who have made tens of thou­sands of dol­lars in con­tri­bu­tions to both Cornyn and Cruz, ar­gue that gener­ics al­ready ac­count for 90 per­cent of the pre­scrip­tions dis­pensed in the U.S., a higher per­cent­age than in most other coun­tries. They also cite the record 1,027 generic medicines the FDA ap­proved for the U.S. mar­ket last year.

Still, while gener­ics en­joy a vol­ume ad­van­tage, brand drugs ac­count for 77 per­cent of all Amer­i­can con­sumer spend­ing on pre­scrip­tion drugs, in­dus­try of­fi­cials say.

But the de­bate is not just about big drug com­pa­nies vy­ing for a big­ger slice of the mar­ket. The Con­gres­sional Bud­get Of­fice es­ti­mates that fed­eral health pro­grams and tax­pay­ers would save $3.8 bil­lion over 10 years if CRE­ATES is en­acted. Those pro­jected sav­ings have helped bring along lib­er­als as well as con­ser­va­tive fis­cal hawks who see it as prefer­able to other pro­pos­als to re­duce health care costs.

The phar­ma­ceu­ti­cal in­dus­try has been forced to ac­knowl­edge re­ports of drug com­pany abuses that are now in the crosshairs of the CRE­ATES Act. Among them are de­lay tac­tics that FDA Com­mis­sioner Scott Got­tlieb has de­scribed as “shenani­gans.”

Much of the con­tro­versy over the bill has fo­cused on the mis­use of FDA pro­to­cols that re­strict ac­cess to drugs with safety con­cerns, some­times by con­trol­ling dis­tri­bu­tion. In­tended to pre­vent harm­ful side ef­fects or abuse, the re­stric­tions have al­legedly been used to block sales of brand drug sam­ples to would-be generic devel­op­ers, who need them for clin­i­cal stud­ies as part of the FDA ap­proval process.

PhRMA takes se­ri­ously con­cerns about drug com­pa­nies de­lay­ing the de­vel­op­ment of gener­ics, said An­drew Powaleny, the group’s di­rec­tor of pub­lic af­fairs.

“We are com­mit­ted to work­ing with pol­i­cy­mak­ers to find a path for­ward to amend the CRE­ATES Act and find a so­lu­tion that pre­serves the U.S. Food and Drug Ad­min­is­tra­tion’s role in the … process to pro­tect pa­tient safety and at the same time fa­cil­i­tate generic com­pe­ti­tion,” he said.

But while Powaleny con­cedes the pos­si­bil­ity of drug com­pany de­lay tac­tics, Brz­ica goes fur­ther: “It’s not a pos­si­bil­ity,” he said. “It’s a known fact.”

‘Spirit of ca­ma­raderie’

With the con­tours of the bat­tle well es­tab­lished, Cornyn’s June 14 vote switch came as a sur­prise to both sides. As one of the rank­ing Repub­li­cans on the Ju­di­ciary Com­mit­tee, he was ex­pected to be one of six GOP mem­bers out of 10 on the panel to vote against the CRE­ATES Act.

While say­ing he “heart­edly” sup­ported the aims of the CRE­ATES Act, Cornyn told Com­mit­tee Chair­man Chuck Grass­ley of Iowa — a lead­ing Repub­li­can spon­sor of the bill — that he in­tended to in­tro­duce an amend­ment nar­row­ing the le­gal op­tions for generic drug devel­op­ers. One of Cornyn’s changes would cover only drugs protected by the FDA’s safety pro­to­cols. Crit­ics say that would not have touched Dara­prim, the off-pa­tent drug that was not on any FDA risk plan when Shkreli boosted its price.

But rather than fight over the amend­ment in an open hear­ing, Cornyn ac­cepted Grass­ley’s of­fer to work with him be­hind the scenes in what Cornyn called “the spirit of ca­ma­raderie and col­le­gial­ity.”

Cornyn then cast an “aye” vote for the CRE­ATES Act, catch­ing many Congress watch­ers off guard — as well as the five other Repub­li­cans on the com­mit­tee who voted “nay” on a bill that clearly has broad pub­lic ap­peal.

Hours later, Cornyn ex­er­cised his pre­rog­a­tive to change his vote to “nay,” tip­ping the bal­ance of the Repub­li­cans on the com­mit­tee — from five out of 10 op­posed, to six out of 10, a sym­bolic ma­jor­ity of Repub­li­cans on the panel.

Even though the bill ad­vanced to the full Se­nate by a lop­sided vote — Cruz and all 10 Democrats on the panel voted in fa­vor — Cornyn’s switch was seen by ob­servers as a sign that the bill’s fate is far from cer­tain in a cham­ber that re­quires 60 votes to pass most leg­is­la­tion.

Since then, Cornyn has made clear that the CRE­ATE Act’s back­ers have yet to win him over.

Su­san Walsh / As­so­ci­ated Press

For­mer Tur­ing Phar­ma­ceu­ti­cals CEO Martin Shkreli’s de­ci­sion to dra­mat­i­cally in­crease the price of the drug Dara­prim, of­ten used by pa­tients with AIDS, led law­mak­ers to con­sider ways to lower prices and boost the pow­ers of generic drug mak­ers.

Jac­que­lyn Martin / As­so­ci­ated Press

Se­nate Ma­jor­ity Whip John Cornyn, right, says he has con­cerns about the CRE­ATES Act “pro­vid­ing un­in­tended in­cen­tives for friv­o­lous lit­i­ga­tion.” Cornyn’s wa­ver­ing votes on mea­sure in­di­cates its in­se­cu­rity, de­spite bi­par­ti­san sup­port.

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