February 21, 2007
By Dan Kurland

Mousy efforts so far: Manchin enters battle over Pharmaceutical Council reform

The yearly battle over the state’s leverage in purchasing pharmaceutical drugs has begun anew.

A quick review: In March 2004, the Legislature created the Pharmaceutical Cost Management Council. That November, a special legislative session approved the council’s benchmark for negotiations and overall strategic plan. Within months, then-Gov. Bob Wise and Gov.-elect Manchin signed an order creating the office of pharmaceutical advocate.

The legislation has proven inadequate. While progress has been made in some areas, the major thrust of cutting prescription prices has been stymied by rules battles and a lack of definition of the roles of the council and advocate. In a standoff between the House and Senate in 2005, remedial legislation died.

New this session is the entrance of the governor as a proactive participant in the debate. Having missed the deadline to originate an expected Senate bill, he now promises to submit a House bill this week — a bill which, if history is any guide, will be tweaked at least a little before journeying on.

Here’s what to look for, a scorecard of the seriousness of the proposals, of how much they backtrack and how much they move forward.

  • Independence of the drug advocate:

To be an effective administrator and leader in the effort to maximize the state’s drug purchasing power, the advocate must have a reasonable degree of independence. The job was originally established as a full-time Cabinet-level position. Watch for attempts to reduce it.

  • Powers of the advocate:

The appointee cannot be an advocate in name only. He or she must have power to act quickly and decisively. The position must be more than cheerleader. Many of the powers originally envisioned for both the council and advocate have been trimmed from active (“will”) to advisory (“will investigate”). Watch for attempts to restrict the advocate’s powers.

  • Members of the council:

Government administrators are judged primarily on how they run existing programs, not on innovation. Governmental councils, on the other hand, can bring broader perspectives. To fill such boards with state administrators, as is the case with the Pharmaceutical Council now, prevents their proper functioning. They can become brakes, not accelerators, of change. Watch how the membership of the council is, or is not, revised.

  • Powers of the council:

The relationship between the council and advocate must be clear. And surely real power can reside in only one of them. Yet both have important roles to play. We should assure that deliberations of the council are truly heard and acted upon. If the council is reduced to an advisory function, we should assure that it can still fulfill its important oversight functions.

  • Disclosure:

Patients shouldn’t pay for the pharmaceutical industry’s extensive direct-to-consumer advertising and lobbying of the provider community. If the state is ever to decrease prescription costs, it must first document the real extent of advertising and marketing. That means more than acquiring aggregate totals. Just as we ask lobbyists to report “first dollar” spending on legislators, so we should ask the same of those who influence prescribing of drugs. Watch to see how specific the reporting criteria are for marketing and advertising expenses.

  • Bargaining mechanism:

Transparency and disclosure mean little if we do not make use of the information gained. We want to know advertising and marketing expenses so we can refuse to subsidize them. And that means having a bargaining mechanism based on that information. The Legislature previously approved using Federal Supply Schedule prices — freely negotiated by the U.S. government — as the basis or “benchmark” for negotiations. Companies would be allowed to apply for waivers from this “reference price” to cover costs of research, production and distribution, but would not be allowed to invoke advertising and marketing costs. This approach is in the state code today. Watch to assure it remains so.

  • Regulating detailers:

Detailers are drug lobbyists, salesmen posing as educators. Their activities unnecessarily inflate the use and cost of prescription drugs. An accounting of detailer activities was stripped from the original bill. Watch to see if that reporting is explicitly reinserted, and whether detailer licensing is added.

  • Rules:

Bills create law. Rules fill in the specifics. Making rules, however, often involves a lengthy process which does not end until after the close of the next year’s legislative session. Emergency rule requirements are often byzantine. One test of the seriousness of any new effort will be how much is in code and how much left to later rulemaking, which may cause further delay and obfuscation.

  • Use of patient information:

Finally, drug manufacturers must be prevented from gaining access to patient information for use in their marketing efforts. See if this prohibition is included.

When the original pharmaceutical bill was passed, West Virginia was “the mouse that roared.” Our efforts have proven somewhat mousy since then.

We are now at a turning point. On one hand, the state can finally guarantee a long-term strategy to increase its ability to negotiate fair and meaningful prescription drug prices. On the other hand, it can maintain an illusion that we are actually trying, but say the failure is caused by others and not our own lack of resolve.

Kurland is health action coordinator of Covenant House and creator of the Web site www.criticalreading.com.