PhRMA Marketing Code Is Basis Of Legislation Proposed By Sen. Clinton

The Pharmaceutical Research & Manufacturers of America's marketing guidelines would be codified in legislation proposed by Sen. Hillary Rodham Clinton (D-N.Y.).

The "Ethical Prescription Drug Marketing Act of 2002," submitted July 24 as an amendment to the McCain/Schumer generic drug legislation (S 812), adopts several of PhRMA's principles, in some cases with identical language.

The Clinton amendment (SA 4318) would prohibit a drug manufacturer from offering "any item or service to a health care professional in a manner or on a condition that would interfere with the independence of the health care professional's prescribing practices."

¹ PhRMA's marketing code, issued April 18, says, "Nothing should be offered or provided in a manner or on conditions that would interfere with the independence of a healthcare professional's prescribing practices" (² (Also see "PhRMA Marketing Code Prohibits Personal Gifts To Physician" - Pink Sheet, 22 Apr, 2002.), p. 3).

Both documents also cite only certain "bona fide services," defined by the same factors, as justifying monetary compensation to a healthcare professional from a drug company.

Like PhRMA's code, the Clinton proposal also would prohibit gifts to physicians "intended primarily for the personal benefit of the health care professional."

All gifts of "substantial value," - $100 or more - would be outlawed, "except that a drug manufacturer may distribute a drug sample" in compliance with the FD&C Act, the bill says.

The Clinton proposal does include one key element not present in PhRMA's code: a fine of "not more than $10,000 for each violation" of the law.

The trade association's principles, which went into effect July 1, are voluntary. They were drafted by a committee organized by another New Yorker: Pfizer CEO and then-PhRMA Chairman Hank McKinnell.

Sen. Robert Torricelli (D-N.J.), another senator with a large home state pharmaceutical industry presence, also proposed an amendment to S 812 on industry gifts to physicians. Torricelli's "Gift and Rebate Disclosure Act" (SA 4308) would require manufacturers to report to FDA "any gift, fee, payment, subsidy or other economic benefit with a value of $50 or more" (³ (Also see "Rx Rebates, Gifts To Physicians Would Be Public Under Torricelli Proposal" - Pink Sheet, 29 Jul, 2002.), p. 8).

Neither the Torricelli nor Clinton amendment was debated or voted on during Senate floor consideration of S 812, which passed July 31. However, the failure of the Senate to pass a Medicare prescription drug coverage bill is likely to increase interest in alternative pharmaceutical bills heading into the November elections (⁴ (Also see "Medicare Rx Moves To Campaign Trail; AARP Endorses Stripped Down Bill" - Pink Sheet, 5 Aug, 2002.), p. 3).

The Senate did adopt an amendment authorizing drug reimports from Canada, as well as an amendment to codify states' rights to seek supplemental manufacturer rebates for the non-Medicaid eligible population (⁵ (Also see "Senate Medicaid Supplemental Rebate Amendment May Block PhRMA Suits" - Pink Sheet, 22 Jul, 2002.), p. 22).

The next stop for McCain/Schumer will be the House, where two similar companion bills have been introduced.

While the focus of the floor debate on S 812 was on Medicare, a number of proposed amendments that were not debated could resurface as the bill moves through the House or emerges from conference.

Two amendments by Sen. Don Nickles (R-Okla.) (SA 4334 and 4338) would have narrowed the Medicaid supplemental rebate amendment by Sen. Debbie Stabenow (D-Mich.).

One proposal would have allowed HHS to void the new subsection if the agency determines that supplemental rebate programs "would result in an increase in expenditures under the Medicaid program."

Nickles also proposed language limiting the scope of the Stabenow amendment to state programs enrolling individuals with incomes below 200% of poverty. Nickles also would limit the application of the bill to state programs begun before July 1.

By contrast, Sen. Paul Wellstone (D-Minn.) submitted a proposal (SA 4327) seeking to expand the use of Medicaid-style rebates in state prescription drug discount programs even more than Stabenow's amendment, giving specific authorization to state-wide discount programs like "Healthy Maine."

PhRMA is challenging the "Healthy Maine" program's HHS waiver (⁶ (Also see "Maine Medicaid Waiver Qualifies For Rx Rebates By State Contributions – Court" - Pink Sheet, 4 Mar, 2002.), p. 13).

"In 49 states, individual Americans do not have access to Medicaid rebates," the Wellstone amendment's "findings" section says. "But in one state...over 100,000 Americans have received discounts from those rebates through the 'Healthy Maine' program. Americans need that program replicated in every state, immediately."

Another amendment related to Medicaid was proposed by Sen. Jeff Bingaman (R-N.M.). His legislation (SA 4328) would provide drug pricing relief to Sec. 340B (disproportionate share) hospitals by declaring that prices they receive from manufacturers are not counted toward the Medicaid "best price" standard.

Sens. Mike DeWine (R-Ohio) and Richard Durbin (D-Ill.) proposed language (SA 2313 and 4329) expanding Medicare coverage of immunosuppressive drugs for kidney transplant patients without regard for when or where they received the transplant.

The Medicare end-stage renal disease program currently provides coverage for transplant surgery and immunosuppressive treatments, even to those below 65 years old, but only if the transplant is performed in an approved facility and only for the three years following the transplant.

Massachusetts Democrat John Kerry also introduced a proposal to increase beneficiary access to particular therapies: a free-standing bill that would allow doctors to be reimbursed for using drugs in the outpatient hospital setting as soon as they are approved, rather than having to wait for a Medicare billing code to be assigned. The practice currently applies to in-patient drugs only. The bill (S 2795) was introduced and referred to the Finance Committee on July 25.

Durbin also proposed an amendment (SA 4325) that would direct HHS to devise a "Consumer Guide to Prescription Drugs."

HHS would collect nationwide data on "the retail prices of the 200 most commonly used prescription drugs" by Medicare beneficiaries, and would calculate an "average retail price" for each drug. An annual consumer guide would publish those average prices, along with the prices of equivalent generics for any brand name drugs on the list.

The guide would also include "easy-to-understand information about such prescription drugs and information on the requirement" that "a generic drug be bioequivalent to the brand name drug."

One of the "purposes" of the guide is to inform Medicare beneficiaries of FDA's role "in ensuring that generic drugs are as safe as brandname drugs."

FDA launched its own generics education campaign at the end of July (⁷ (Also see "FDA Generic Drug Promotional Campaign Features Newspaper Articles" - Pink Sheet, 29 Jul, 2002.), p. 21).

Also proposed as amendments to McCain/Schumer were two bills previously introduced by Sens. Patrick Leahy (D-Vt.) and Bill Frist (R-Tenn.), respectively.

Leahy sought to attach the "Drug Competition Act" (S 754) to S 812. The bill would require brand and generic firms entering into agreements on pending ANDAs to disclose them to the Federal Trade Commission (see ⁸ (Also see "FDA, USP Should Set Generic Biologics Standards, Sen. Hatch Proposes" - Pink Sheet, 12 Aug, 2002.)).

Frist's "Improved Vaccine Affordability and Availability Act" (S 2053), introduced March 21, would modify the Vaccine Injury Compensation Program in an effort to decrease liability suits against manufacturers (⁹ (Also see "Vaccine Preservative Injury Claims Would Be Covered By VICP In Frist Bill" - Pink Sheet, 1 Apr, 2002.), p. 19).

Rep. James Greenwood (R-Penn.) introduced a companion to the Frist bill (HR 5282) on July 26.

The Greenwood bill excludes two provisions in the Frist version: an increase in the award to families in the case of a vaccine-related death, and an increase in the limit on administrative expenses for the trust fund.

The House has its own set of pending legislation on prescription drugs that could be considered in the fall.

Rep. John Dingell (D-Mich.) has introduced HR 5276, which would rename and expand the special low-income Medicare beneficiaries (SLMB) program by increasing the eligibility income level from 120% to 135% of poverty beginning in 2003.

Dingell prevailed in the Democratic primary against fellow Michigan Democratic Rep. Lynn Rivers in the state's redrawn 15th district (see ¹⁰ (Also see "Pfizer Has New Michigan Representative: Dingell Wins House Primary" - Pink Sheet, 12 Aug, 2002.) ).

The House's drug agenda for the fall will also likely include reimportation; Commerce Committee Chairman Billy Tauzin (R-La.) has committed to "move legislation" through the committee by the end of September (¹¹ (Also see "House Examines Medicare Rx Alternatives: Drug Reimportation To “Move”" - Pink Sheet, 29 Jul, 2002.), p. 10).