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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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June 28, 2012

PhRMA Waits For The Supreme Court

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Posted by Derek

There's no escaping politics and health care policy today. No matter what happens to the Affordable Care Act this morning (and no matter what you think of it either way), if you work in the drug industry, it's worth recalling that PhRMA (the big-company industry association) was very much in favor of the legislation. At least as it was finally passed, that is - there was a lot of quid-pro-quo-ing about drug reimportation and Medicare pricing, and agreement on those appears to have been PhRMA's price for supporting the bill. It was a deal that many objected to at the time, and in one of the few other times I've talked politics on this blog, I wondered if it was going to hold up even at that.

We know more of these details because of a set of e-mails and internal memos that show the group's agreement to advertise in favor of its passage, and to help senators and representatives who voted for it:

“As part of our agreement, PhRMA needs to undertake a very significant public campaign in order to support policies of mutual interest to the industry and the Administration,” according to a July 14, 2009, memo from the Pharmaceutical Research and Manufacturers of America. “We have included a significant amount for advertising to express appreciation for lawmakers’ positions on health care reform issues.”

The goal, the memo said, was to “create momentum for consensus health care reform, help it pass, and then acknowledge those senators and representatives who were instrumental in making it happen and who must remain vigilant during implementation.”

One of the vehicles for this was a coalition (involving PhRMA, the AMA, and others) called "Healthy Economy Now" (HEN), which appears to have been started by White House staffers. None of that is surprising or particularly unusual, but an unusual twist involves the White House's David Axelrod and his former advertising company AKPD. The company was still paying Axelrod at the time, and his son was working there, and it appears that they got a good part of the advertising business that PhRMA and the other funded:

A 2009 PhRMA memo also makes clear that AKPD had been chosen before PhRMA joined HEN. It's also clear that some contributors didn't like the conflict of interest. When, in July 2009, a media outlet prepared to report AKPD's hiring, a PhRMA participant said: "This is a big problem." Mr. Baldick advises: "just say, AKPD is not working for PhRMA." AKPD and another firm, GMMB, would handle $12 million in ad business from HEN and work for a successor 501(c)4.

Well, that's Washington, and no mistake. If you don't sit down at the table and cut a deal with these folks, this sort of thing happens to you. But no matter which way the Supreme Court goes this morning, or what parts of the bill might be struck down, it will affect the drug industry. From PhRMA's standpoint, the current legislation represents the fruits of a great deal of lobbying and arm-twisting (in both directions), a great deal of money, and a great deal of worry about future revenues. This work may be in danger of going partially or wholly for naught. We'll find out at 10 AM.

Comments (6) + TrackBacks (0) | Category: Current Events


1. Anon on June 28, 2012 9:22 AM writes...

update: All parts upheld.

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2. RB Woodweird on June 28, 2012 9:46 AM writes...

With the stipulations that I have not read the decision and that the particulars are always more gray than can be summed quickly, still it occurs to me that there are four Justices who believe that government can hand you a gun and send you off to be shot, that the government can compel you to pay taxes to pay to support thousands of nuclear weapons, but the government cannot be allowed to make you be able to take your kids to a doctor.

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3. A Nonny Mouse on June 28, 2012 10:14 AM writes...

Met an old colleague who is working out in India. He gets ear infections when he flies and uses cipfloxacin drops for the condition. These are 9 Rupees in India (20 cents) over the counter. Flying to New York he found that he had not packed the drops. Went to a doctor ($400) for a 5 minute consultation. Went to the pharmacist with his prescription and got the same brand as in India. The difference, $249.80!

His told this story to the owner of the Indian company that makes the ear drops who told him that they were under investigation in India for OVER charging.

With costs like these, the system has to be unsustainable except for the very wealthy.

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4. Biotechtranslated on June 28, 2012 10:45 AM writes...


Getting drugs at low prices in India is no different than going to China and buying a DVD of a movie that was released the prior weekend for $1.

It's easy to complain about high prices when you never have to shoulder the costs of R&D.

Watch what happens when India starts developing their own drugs. It's no different than Teva who on one hands fights patents so they can make generics, then gets the same lawyers to fight FOR their Copaxone patent so they can keep their branded product revenue flowing.

You can't have your cake and eat it too.


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5. RickW on June 28, 2012 10:47 AM writes...

#3, you might mention to your old (and presumably imaginary) colleague that ciprofloxacin is available as generic for about $246 less than he paid, and that there are pretty good reasons for antibiotics not to be available over the counter.

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6. davesnyd on June 28, 2012 2:52 PM writes...

And *why* PhRMA supported the ACA:

But now, pharma gets what the ACA promised in the first place. Millions more people will have help paying for their drugs. So, more scripts will be filled and more refills will be paid for. And millions more people will have ready access to healthcare providers. And that means more prescriptions are likely to be written in the first place.

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