Drug Costs and Generic Substitutes
June 24, 2008
By Jerry Kopel
A Denver Post article recently provided a headache as I remembered
the motto that kept me sane while serving 18 of my 22 years in the House
minority party: "The bad guys always win....eventually."
Thirty-two years ago, the Colorado legislature broke the back of many
expensive drug costs by approving a Colorado law authorizing generic drug
substitution except where the doctor or the customer say they prefer the
The article indicated the Federal Trade Commission (FTC) has sued to block
settlements agreed to between pharmaceutical companies and generic drug
manufacturers to keep the less expensive generics off the market, thus
The article didn't list the amounts being paid to the generic drug makers,
but did indicate the FTC is asking Congress to ban the practice.
Meanwhile "Pfizer Inc. struck a deal with a generic-drug maker to keep a
cheaper version of Lipitor off the U.S. market until November, 2011"
according to the Wall Street Journal.
The fight for generic drugs in the Colorado legislature arose in 1975 and
at the end of that session, it carried over to 1976. There are probably
fewer than half a dozen persons still active at the state capitol as
lobbyists or staffers from that time period. For an historic perspective,
this is what happened:
My 1975 generic substitution bill, which had already passed the House,
died in Senate Appropriations Committee. Sen. Joe Shoemaker (R) gave me
three minutes to explain the bill. Standing at the door was Jon Holm, now
deceased, and then lobbyist for the brand name drug manufacturers.
Sen. Les Fowler (R) made the motion to kill the bill, which died nine to
six on a party line vote.
Gov. Dick Lamm (D) requested measures to place on the "call." In 1976, the
constitution provided that the governor decides what topic would be heard
during the "short session." I told him "If you were to limit my request to
one measure, let it be the drug substitution bill."
During the 1975 fall and winter months, I prepared by meeting with
pharmacy school students and faculty at Boulder, and with the Colorado
Pharmacists Association leadership. In 1975, the association had worked
against my bill.
Rep. Frank Traylor (R), a physician, and I combined to write an analysis
of why we needed a change in the laws that denied drug prescription
substitution. The article appeared on page one of the Rocky Mountain
News Trend section in December, 1975.
Our 1976 measure, HB 1087, was to be based on the newly-enacted and
well-written California law on generic drug substitution.
The early days of the session were spent signing up 36 House and 18 Senate
sponsors. The most difficult task at this point was to persuade Sen. Hank
Brown (R) to carry the bill in the Senate. After many days, we reached a
He would add his name as a Senate sponsor, but not as chief sponsor. Since
co-sponsors are listed alphabetically, his name would appear first if I
didn't ask Bob Allshouse (R), Fred Anderson (R), or Tilman Bishop (R) to
sign the bill. I didn't, and once on the bill as the first Senate sponsor,
Sen.Brown became an enthusiastic chief Senate sponsor.
The bill encountered little difficulty in the House, which stood by its
1975 approval. Meanwhile the pharmacists had hired a lobbyist, Fred
Sievers. Their executive director, Myrle Myers, supported the substitution
The pharmacy association went on record in favor of the substitution bill,
so long as "no additional agency was established to determine what could
be or could not be so substituted and which would essentially duplicate
federal programs." This position was hammered out at a late night meeting
of pharmacists which I attended. It was crucial that the chief sponsor be
there to answer hard questions from many present who opposed the measure.
HB 1087 passed the House by a vote of 44 to 15. Now the real battle was
about to begin. I had heard reports that the Pharmaceutical Manufacturing
Association was prepared to let the Colorado position determine what would
happen in the rest of the nearby states, and to spend what was needed to
kill the bill in Colorado.
Jon Holm was on board again as chief lobbyist. To aid him, the
manufacturers assigned three "detail" men. Almost every day, standing at
the brass rail in the corridor leading to the Senate chambers, would be
Mr. Holm and his three pharmacy experts, from Eli Lilly, Sandoz, and
Merck, cornering senators as they passed by.
The bill was assigned on Feb. 17th to Health and Welfare. chaired by Sen.
Ted Strickland (R), who had voted against the measure in the same
committee in 1975. And there, in 1976, the bill sat for one month and
In March, Sen. Brown completed a re-write of the House bill. His version
eliminated the board to determine which drugs could not be substituted (a
response to the pharmacists' position). As an alternative, Sen. Brown
tightened the definition of what could be substituted. Otherwise, the bill
Sen. Strickland scheduled the measure as the next-to-last item to be heard
by his committee on the morning of March 29th, the final day for the
Senate committee to hear House bills. The committee began work at 9 a.m.
Three hours later, they were still considering a measure scheduled just
before House Bill 1087, and which measure (Emergency Medical Services) had
drawn over a hundred people into committee chambers.
Strickland was in no hurry to finish the bill. He told the audience
several times that anyone who wished to speak should feel free to do so.
Strickland also indicated that anything not voted on by 1 p.m. was dead. I
put on my fiercest face for the audience, backed by my position as
Judiciary chairman in the majority Democratic House. No one in the
audience offered to speak. The Emergency bill was adopted unanimously, and
our bill was on the table.
"We have 15 minutes left" said Sen. Strickland, after Sen. Brown took
about five minutes to explain the bill and offer his amendments, "so the
people for and the people against have six minutes each."
That was fine with us. Strickland's committee had seven members, three
Democrats and four Republicans. One Democrat, Sen. Vincent Massari, was
ill, and no longer in attendance. This made the vote three to three, with
Sen. Dennis Gallagher (D) and Sen. Regis Groff (D), plus Sen. Bill Hughes
(R) for the bill.
On a tie vote, a bill loses. However, Sen. Joseph Schieffelin (R) had
accepted a noon invitation to speak in Colorado Springs at an anti-Equal
Rights Amendment meeting, and he had left the capitol at 10:30 a.m. That
left Strickland and Sen. Harold McCormick (R) in opposition.
No one's mind was changed in the 12 minutes of debate, although some of
the pharmacy manufacturing people who had flown in from other parts of the
country to testify against the bill must have wondered about how our
The bill was reported favorably, three to two. It would not have become
law, if Sen. Strickland had put the bill on the table for hearing and vote
at 9 a.m., instead of 12:45 p.m.
But the opponents were not yet finished. Sen. Strickland asked Pharmacy
Board Executive Secretary Mike Simmons, a foe of the bill, how much the
bill would cost, and Simmons wrote an almost instantaneous letter that the
bill would require a $22,000 appropriation for an additional Pharmacy
The reason this letter was important is that no bill costing state funds
would be debated on the Senate floor without first going to the
Appropriations Committee, where the 1975 substitution bill had
"coincidentally" been killed.
We learned about the Simmons letter one day before it was to be used by
Strickland to move the bill to Appropriation Committee. I asked for, and
received, just before HB 1087 was to be next on the day's calendar, a
fiscal note from the Governor's Budget Office, showing no fiscal impact.
In fact, instead of needing another inspector, the budget office figures
showed that state inspections were presently double what the pharmacy
state statute (as opposed to regulations) actually called for.
The Health Committee report on HB 1087 was read in the Senate. I had a
Senate aide hand Sen. Brown the budget office report showing the bill had
no fiscal impact. Strickland went to the microphone and read Simmons'
letter. Sen. President Anderson was about to send the measure to
appropriations, when Sen. Brown went to the mike and read the budget
office report to the senators. HB 1087 was saved .
The rest was anti-climactic, although we didn't know it at the time. The
Medical Association, which had earlier passed a resolution against the
bill, had their lobbyists join in the fray on the side of their
manufacturing friends. A number of amendments were offered by the
manufacturer-medical group and were defeated. Democrats were solidly
united behind the bill. On final vote April 6th, only Sen. McCormick voted
against the measure.
Getting a bill like this through the Senate was very unusual in that it
required the generic drug to cost the consumer less than the brand name
Credit for success had to go to lobbyist Fred Sievers, Myrle Myers, and to
the many pharmacists who called their senators to indicate support for the
Sen. Brown deserved a special accolade. He spent time learning about the
subject; his pruning of the House version was done in a sound manner, and
he had great credibility with his fellow senators. It made a difference.
Last, but not least, we had to thank the people who organized the noon
anti-ERA meeting on Monday, March 29th in Colorado Springs.
(Jerry Kopel served 22 years in the Colorado House).