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In drugmakers' defense, spokesman stays busy

In a visit to the bay area, he answers questions, including how drugs from Canada are dangerous to U.S. citizens.

KRIS HUNDLEY
Published September 18, 2003

Arguments against Canadian drug imports tumble out of Jeffrey Trewhitt like capsules from a bottle. They are unsafe. Buyers don't get what they are promised.

What's worse, at least from Trewhitt's perspective, is that such imports introduce U.S. consumers to a concept drugmakers would rather remain foreign: government-mandated price controls.

Trewhitt, 52, is spokesman for the Pharmaceutical Research and Manufacturers of America, or PhRMA, a powerful organization whose members account for 90 percent of brand name drug sales in the United States. As the mouthpiece for the multibillion-dollar drug industry, Trewhitt is such a busy spokesman that he has his own spokeswoman to schedule appointments.

On Wednesday Trewhitt visited the Tampa Bay area to sing the praises of Rep. Mike Bilirakis, R-Tarpon Springs, who, like PhRMA, has vehemently opposed drug imports and drug price controls.

In an interview with the St. Petersburg Times, Trewhitt repeated the drug industry's favorite argument: Higher drug prices in the United States mean more research and development, which mean more drugs made in America, which mean longer lives for Americans.

He urged Congress to pass a Medicare drug benefit that is delivered through private health plans. And he defended the drug industry's generous political contributions and lavish ad campaigns as simply ways to make his industry heard.

Q: PhRMA says drugs from Canada are not safe. But Americans are buying nearly $1-billion in drugs a year from Canada without apparent harm. Where's the danger?

A: Every relevant federal regulatory agency has sharply criticized reimportation as unsafe and risky for patients. The Food and Drug Administration has concrete examples of counterfeit and substandard products coming into this country through reimportation, including problems with some products purportedly from Canada and actually from Canada. So even with Canada, you can have a problem.

Q: The bill passed by the House in July had provisions to certify Canadian drugs were safe and to protect against counterfeits. Why is that not enough?

A: The FDA has said to make sure there is safety they would have to set up an entirely new regulatory agency and it would be quite expensive. The numbers they were citing in fall 2000 were $94-million a year.

Q: What will the industry do if Illinois starts importing drugs for state employees and retirees from Canada, as is being discussed?

A: The initiative really should be taken by the FDA, and the FDA welcomes the opportunity to sit down with the governor of Illinois and discuss this with him.

Q: The U.S. Customs Department seems to be looking the other way as drugs are reimported. Do you expect that policy to continue?

A: The FDA has said if somebody has actually gone to Canada and is coming back from a Canadian pharmacy, they don't have the resources to stop every person, in part for compassionate reasons. But they are issuing warnings to people that there can be problems with Canadian medicines, and they have examples of problems. People are being warned it is technically illegal.

Q: Safety is admittedly not the only reason your group opposes drug reimportation.

A: The second problem we see, and we're very candid about this, is that we don't want somebody else's failed price-fixing schemes being brought into this country to stifle the innovation of the most innovative pharmaceutical industry in the world.

The U.S. pharmaceutical industry is responsible for more than half the major medicines today. And it is the U.S. pharmaceutical industry that is leading the charge in the genetic research revolution. About 85 of the 95 new biotech medicines approved since 1982 were researched and developed by U.S. companies. Our companies spent about $2-billion on research and development in 1980. In 2002, they spent $32.1-billion.

Q: Why then is the research pipeline in the United States considered dangerously thin by many observers?

A: In part because many companies are on a learning curve as they learn the new techniques. We still have products coming out. It just may be taking a little longer.

Q: A drug marketing consultant recently estimated that about 35 percent of a drug company's revenues go into marketing - more than twice the 15 percent or so that goes into R&D.

A: That's not accurate. If you combine the cost of marketing and advertising with administrative management, you reach 35 or 40 percent. Direct-to-consumer advertising cost in 2001 was about $2.7-billion, compared to about $30-billion spent on research and development.

Q: Drugmakers live with price controls under the Department of Veterans Affairs' program, which lets veterans receive a month's prescription for $7 a month. Why couldn't they accommodate a similar buying program through Medicare?

A: We believe the best way to get cost containment and cost-effective treatment is through competitive marketplace negotiation as opposed to government-mandated price-fixing. Such price-fixing is arbitrary and it quite often sets artificially low prices, as it has in these other countries where it has stifled innovations.

These price-fixing schemes don't take into account that the average cost of R&D for one new drug has increased from $231-million 20 years ago to $800-million today. And the fact that biomedical research has very high failure rates. For every five drugs that go into human testing, only one is ultimately approved to go into the market.

Q: Part of the reason for today's visit is to support Rep. Bilirakis, who has received $3,000 from your group and more than $100,000 from the drug and health products industry over the past two years, according to the Center for Responsive Politics. That's part of nearly $27-million in political contributions from the pharmaceutical industry in the 2002 election cycle. Are you buying support?

A: Like our critics on the other side, we participate in the democratic process. These are important issues, and we are an important player in those issues, and it is important that we be heard because we have been barraged by a wide range of distorted allegations. The gray in my beard is partly my son and partly my job.

Q: There are provisions in the Medicare drug bill to limit efforts by drugmakers to preserve patents after they expire. What is PhRMA's view of these efforts?

A: We think that is an issue that needs to be studied very carefully. The critics have thrown out a lot of glib allegations that are not backed up by the numbers. We think the existing federal incentive law, the Hatch-Waxman law, has worked well. Since it was passed in 1984, more than 10,000 generic drugs have been approved to go on the market. The portion of the pharmaceutical marketplace that is generic has grown from 19 percent in 1984 to 52 percent today.

Q: What do you think are the chances Congress will approve a Medicare drug bill by year-end?

A: We are still cautiously optimistic that a bill can emerge and be passed.

Q: What do you say to Americans who are incensed at paying the highest drug prices in the world?

A: The answer is better coverage, not price controls. Medicare is falling down on the job by not offering an outpatient drug benefit even though medicines are increasingly the treatment of choice. Up to 38 percent of the elderly don't have any drug coverage, and Medicare is not helping them.

Q: Who pays?

A: There is a strong possibility that if there is consistent, day-to-day drug coverage under Medicare, in the long run the health care system will save money. Many medicines have the ability to stabilize patients without surgery and hospitalization. We are cost-effective. We help to drive down the cost of health care.

- Kris Hundley can be contacted at hundley@sptimes.com or 727 892-2996.

Pharmaceutical Research and Manufacturers of America

The Pharmaceutical Research and Manufacturers of America represents the nation's major pharmaceutical companies, including GlaxoSmithKline, Eli Lilly & Co. and Bristol-Myers Squibb. Its 90 members account for about 90 percent of brand-name pharmaceutical sales. The Washington, D.C., group promotes the benefits of its members' drug research. It lobbies against the reimportation of drugs from outside the United States, price controls and limits on direct-to-consumer marketing. The group supports a Medicare prescription drug benefit in which drug prices are set competitively and not by government control.

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