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"Big Pharma" Allergic to Sunshine

by Jerry Flanagan, 9:15 a.m. PST, (415) 633-1320

Three bills to be voted on this morning by the California Assembly Business & Professions Committee make pharmaceutical lobbyists convulse because they address concepts antithetical to the industry's (known collectively as Big Pharma) expansive profit margins: transparency, affordability, and accountability.

AB 1957: Safe and Affordable Drug Importation from Canada

Canadian pharmacies received bulk discounts of 30-60% off the price of U.S. made drugs because the Canadian government has used its market leverage to cap prices. AB 1957 would allow Californians to tap into Canada's negotiated discounts by setting up a Web site with links to online Canadian pharmacies and determine which state agencies should purchase prescriptions from Canada.

Big Pharma lobbyists and CEOs claim that this proposal, like the websites of five other states already in operation, is a hazard because Canadian drugs are unsafe. But if the majority of Canadian drugs are produced by U.S. companies, and are legally sold in the U.S., how is it that they are unsafe to bring back into the country?

AB 1959: Uncloak the Secrecy of State Spending on Prescription Drugs

California state agencies will spend approximately $4.7 billion or more on prescription drugs for public health programs, inmates in correctional facilities, and state employees. The details of these purchases (rates, rebates, and discounts) are obscured by layers of state beaucracry and secret agreements with pharmaceutical companies. AB 1959 is a no brainer. It allows the independent Bureau of the State Auditor to look at the books and make sure California is getting the best deal for its dollar.

The need for this type of sunshine is clear: in December federal auditors announced that state bureaucrats could not account for $1.3 billion in legally required rebates from pharmaceutical companies. To date, the state has not explained what happed to more than $500 million of that money.

AB 1960: Improving Transparency within the Drug Purchasing Process

Pharmacy benefit managers (PBMs) are purchasing intermediaries that specialize in the administration and management of prescription drug programs for clients such as state governments, HMOs, employers, and union trust funds. A few of these unregulated prescription drug behemoths control the price of drugs through secrecy and "proprietary" agreements with their pharmaceutical company cohorts. Would California allow OPEC to get away with price fixing if it was in our power to rein them in? We should do to OPEC exactly what AB 1960 will do to for PBMs: requiring them to abide by appropriate oversight.