Jerry Kopel

"The worse the state, the more laws it has."

Tacitus, the historian.

Bills are better, the second time around. At least that's the optimistic approach by most Colorado legislators. So don't be surprised by the number of bills introduced in 1998 that failed in 1997. It's deja vu all over again.

In the closing moments of the 1997 session (April 25th), Rep. Paul Schauer, R-Littleton, introduced HB 1357, dealing with alcohol beverages. It went to Business Affairs, where it was promptly killed. (The committee report was printed April 29th.)

As with many legislative bills, this one had national implications: The mail order alcohol business is BIG and growing, which means heavy fighting between lobbyists who represent both state wholesalers and retailers versus lobbyists for the mail order companies.

The violation set up by HB 1357 was to be the delivery of an alcoholic beverage by mail or common carrier to a person "other than a licensed wholesaler or a licensed retailer" or "a sale other than through a licensed wholesaler or licensed retailer." Licensed means licensed by the state of Colorado.

Colorado does allow vinous liquor to be shipped in by one who has a valid wine shipping permit issued by Colorado. If another state gives Colorado reciprocity, winemakers and retailers can ship two cases of vinous liquors (no more than nine liters) per month to any adult Colorado resident. However the statute requires the Colorado resident to order IN PERSON at the licensed premises. Opponents of the restriction say this discriminates against the less wealthy.

So any wine shipments in violation of the wine shipping statute, or ANY delivery of an alcohol beverage other than through a sale by a Colorado licensed wholesaler or retailer would have violated this bill. Who could have sued? Any person injured "as a result" of a violation.

Obviously, licensed persons are persons injured if they can show proof of loss. But the definition of "person" includes any natural person. This means that tort actions involving drunk driving could also come into play.

Suppose a drunk driver injured a pedestrian and the alcohol came through the mail directly to the driver. Or suppose it came from a local bar that had failed to renew its license in time. Recovery under HB 1357 against the driver and either of the unlicensed providers is "three times the amount of actual damages sustained" plus recovery of "expert fees and reasonable attorney fees."

Colorado legislators should understand HB 1357 had nothing to do with any perceived situation within this state. The Wall Street Journal contends "a growing number of states from Florida to Montana are cracking down on direct alcohol shipments into their territory" fueled, claim opponents "by powerful wholesalers and distributors who are in a rapidly consolidating business and are ferociously guarding their turf."

Likely major opponent to a 1998 version of HB 1357 will be the "Coalition for Free Trade in Licensed Beverages", a San Francisco based organization which told the Journal "What we're fighting against (are) regulations that create a monopoly in a very small handful of wholesalers."

What isn't understandable is why the Colorado lobbyist had HB 1357 introduced so late in the session. Sources tell me it was simply a response to pressure from the state wholesalers and retailers and not due to any reasonable belief the measure would pass in 1997. Now opponents know it will definitely resurface in some form in 1998 and they will be more ready to fight it.

* * *

Sen. Elsie Lacy, R-Aurora, had three shots in 1997 at revising Colorado's generic substitution prescription law. She would have created an exception for "Narrow Therapeutic Index Drugs" also known as NTI. Her three measures, SB 130, plus an amendment on second reading to HB 1122, plus SB 238 all failed to get out of the Senate.

There is no doubt a version of SB 238 will surface again in 1998, pushed hard by lobbyists for brand name prescription drugs.

NTIs, according to proponents, are drugs that require judicious monitoring and close physician supervision to enhance their safe use because, states SB 238, "there is less than a two-fold difference in median lethal dose and median effective dose, and minimum toxic concentrations and minimum effective concentrations."

Under PRESENT law, a physician can prevent a generic substitution by initialing a preprinted box labeled "dispense as written". SB 238 makes it clear that physicians cannot be trusted to be knowledgeable in the area of NTI drugs. The bill states if a physician is agreeable to a generic substitution for an NTI drug, the pharmacist must still "obtain notification and the documented consent of the practitioner" before making a substitution.

Coincident to the push for NTI drug exemption from Colorado's generic substitution law is an end to patent protection for a large number of brand name drugs in the next four years: Vasotec, Prozac, Mevacor, Prinivil/Prinzide, Pepcid, and Prilosec, among others.

They would have lost protection even earlier if not for adoption of GATT (General Agreement on Tariffs and Trade), a world trade treaty that required the U.S. to change its patent protection for brand name drugs from 17 years to 20 years.

The bill by Sen. Lacy in 1997 is part of a national push by brand name prescription drug manufacturers to continue protection of NTI drugs even when the patents run out by requiring additional barriers to be crossed before substitution can occur.

But there is another way, at least in Colorado, to protect brand name NFI drugs without passing Sen. Lacy's bill. Sell the brand name drugs which have lost their patent monopoly, for the same price as the generic substitutes. CRS 12-22-124 (4) provides:

" no case shall the pharmacist substitute a drug product ...unless the drug product substituted costs the purchaser less than the drug product prescribed..."

This is not the first attempt to break out of generic drug substitution in Colorado. Back in 1995, Sen. Dick Mutzebaugh R-Arapahoe, and Rep. Norma Anderson, R-Lakewood, introduced SB 16

which would have prohibited drug substitution if the "dosage form" was not identical as to "the release, targeting, systemic absorption, or other delivery of a dosage regimen in the body."

Since there can be a separate patent of 20 years for the distribution process, SB 16 would have provided brand name protection for ANOTHER 20 years. Facing strong opposition from the Colorado Pharmacists Association, Sen. Mutzebaugh requested that his bill be killed in committee. It was.


Jerry Kopel writes a column for the Statesman based on 22 years past experience as a state legislator.

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