Jerry Kopel

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 brand-name versions.

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 harming consumers.

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 diplomatic conclusion.

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 law.

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 twelve days.

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 was intact.

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 system worked.

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 Board inspector.

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 drug.

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 measure.

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).

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