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Executive Summary

Rep. Wyden (D-Ore.) is no longer negotiating with the Pharmaceutical Manufacturers Association (PMA) on sampling provisions for inclusion in drug diversion legislation. Near the close of the 99th Congress, Wyden was designated as the point of contact for the industry on the drug diversion bill after House Commerce Committee Chairman Dingell (D-Mich.) withdrew from the discussions. The chairman stopped talking after PMA member companies ordered the association staff to continue negotiations on a preliminary agreement reached with Dingell ("The Pink Sheet" Nov. 17, p. 8). Lead work on the legislation, including negotiations, has reverted back directly to Dingell and his staff. The chairman reportedly intends to reintroduce the diversion/sampling bill in the form in which it passed the Health Subcommittee ("The Pink Sheet" Sept. 29, T&G-5). Dingell's staff is not currently interested in further negotiations and plans to proceed with hearings on drug sampling abuses by industry personnel. Those hearings would be used to build a record for legislation that would take samples out of the hands of detail forces. PMA was hoping to resume negotiations where they left off with Wyden. The association reportedly has approached Dingell and his staff with a concession on the final tentative agreement that was struck between Wyden and PMA staff. In October, one proposal would have permitted sampling under a strict system of standards, inventories and audits. The proposal also provided penalties of $1 mil. in fines and prison terms for executives of companies with three employee convictions on sampling violations within a 10-year period. PMA was seeking a "safety valve" on the penalties to avoid maximum penalties in several situations, including one in which the company did not know of the violations despite bona fide efforts to monitor sampling procedures. The talks with Wyden reportedly broke down when company lawyers insisted the burden of proof should be on the prosecution (to show that the company knew of the violations) rather than on the company (to show it did not know of the violations). PMA is now ready to accept legislation that places the burden of proof on companies. However, Dingell reportedly insists on returning to an earlier version of the bill that passed the Health Subcommittee and would restrict distribution of physician samples to mail or common carrier. The fundamental question, in the view of Dingell's staff, is whether the industry can regulate sampling itself. Last fall's negotiations toward the creation of various "safety" clauses suggests to Dingell that the industry cannot self-regulate. Furthermore, Dingell's staff is said to doubt the sincerity with which the industry participated in the October negotiations. Had the Republicans maintained control of the Senate and Sen. Quayle (R-Ind.) assumed the chairmanship of the Labor & Human Resources Committee, the pharmaceutical industry would have been able to block a bill they strongly oppose. Instead, the key legislators on the issue will be Dingell, Rep. Waxman (D-Calif.) and Sen. Kennedy (D-Mass.). Waxman has been suspicious of brand marketing practices, particularly with regard to overseas labeling, and Kennedy offered a bill that would have banned sampling a decade ago. In an effort to head off hearings, representatives from several firms have approached Dingell's staff with alternative proposals. An industry consensus could be building around a provision that would limit sampling to new approvals, new formulations or new indications. Among the major firms that are said to be considering that concept are Warner-Lambert, Roche and Merck. Marion, Burroughs-Wellcome and Merck have previously told Dingell's committee that they would support common carrier restrictions on sampling. Proponents of the new product sampling argument maitain that the restriction of sampling to new product approvals would put the U.S. in line with sampling practices of other countries. However, the new product approach may be unattractive to companies with mature lines and few products in the pipeline for near-term approval. The new product compromise would be most appealing to companies with key products nearing approval. A growing number of firms are anxious to avoid marketing practice hearings because they could lead to followup investigations on other topics such as alleged FDA laxity in approvals.

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