Klobuchar, McCain, Grassley Urge OMB Director Mulvaney to Use Existing Executive Authority to Bring Down Prescription Drug Costs

In a letter to Office of Management and Budget (OMB) Director Mulvaney, Klobuchar, McCain, and Grassley encourage executive or administrative action to reduce the ever-increasing financial burden of prescription drugs for millions of Americans

Klobuchar, McCain, and Grassley have worked together on bipartisan legislation that would address skyrocketing prescription drug prices, including bills to allow for personal importation of medications from Canada and bills that would deter pharmaceutical companies from blocking cheaper generic alternatives from entering the marketplace

WASHINGTON, D.C. – U.S. Senators Amy Klobuchar (D-MN), John McCain (R-AZ), and Chuck Grassley (R-IA) have urged Office of Management (OMB) Director Mick Mulvaney to use existing executive authority to bring down prescription drug costs, including by certifying importation of prescription drugs from Canada. According to media reports, Mulvaney said last week that he has been actively discussing potential executive or administrative solutions with the President to address rising prescription drug costs. Additionally, Health and Human Services Secretary Tom Price has been holding “listening sessions” to discuss possible solutions.

Klobuchar, McCain, and Grassley have also worked together on bipartisan legislation that would address skyrocketing drug prices, including bills to allow for personal importation of medications from Canada, where drug prices are, on average, half the cost they are in the United States, and bills that would deter pharmaceutical companies from blocking generic alternatives from entering the marketplace. In their letter, Klobuchar, McCain, and Grassley detail how the Administration could use executive or administrative action to reduce the ever-increasing financial burden of prescription drugs for millions of Americans.

“According to media reports, you said on Thursday that you have been actively discussing potential executive or administrative solutions with the President to address rising prescription drug costs. Similarly, Secretary Price has been holding ‘listening sessions’ to discuss possible solutions. We write to express our support for such efforts that could provide immediate relief to Americans,” the senators wrote. “Consistent with your comments last week, the Administration has an opportunity to use existing statutory authority to quickly restore competition to the market with the introduction of cheaper, imported alternatives.”

The senators continued, “We urge you to seriously consider this existing statutory authority as well as explore other options for executive action. We also ask that you please provide your recommendations as to what additional authority you would require to protect American consumers. Of course, we would welcome your support of our legislation to bring down the costs of prescription drugs as well.” 

Klobuchar and McCain introduced the Safe and Affordable Drugs from Canada Act to require the Food and Drug Administration to establish a personal importation program that would allow individuals to import a 90-day supply of prescription drugs from an approved Canadian pharmacy. The bipartisan Preserve Access to Affordable Generics Act Klobuchar and Grassley introduced would crack down on anti-competitive “pay-for-delay” deals in which branded companies pay their generic competitors not to compete as part of a patent settlement. These pay-for-delay agreements delay consumer access to generic drugs, which can be as much as 90 percent cheaper than brand-name drugs. The legislation would help make sure consumers have access to the cost saving generics they need by stopping these anti-competitive pay-off agreements that keep more affordable generic equivalents off the market. In addition, Klobuchar and Grassley introduced the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act with Senators Patrick Leahy (D-VT), Dianne Feinstein (D-CA), and Mike Lee (R-UT). The CREATES Act would combat anticompetitive practices used by some brand-name pharmaceutical and biologic companies to block or delay entry of lower-cost generic drugs in the marketplace. 

The full text of the senators’ letter is below.

Dear Director Mulvaney:

According to media reports, you said on Thursday that you have been actively discussing potential executive or administrative solutions with the President to address rising prescription drug costs. Similarly, Secretary Price has been holding “listening sessions” to discuss possible solutions. We write to express our support for such efforts that could provide immediate relief to Americans. 

We have worked together on bipartisan legislation that would address skyrocketing drug prices, including bills to allow for personal importation of medications from Canada, where drug prices are, on average, half the cost they are in the United States, and bills that would deter pharmaceutical companies from blocking cheaper generic alternatives from entering the marketplace.

While we pursue these legislative options in Congress, we strongly encourage you to take executive or administrative action to reduce the ever-increasing financial burden of prescription drugs for millions of Americans. We have previously outlined ways that the Administration could implement such strategies in a targeted manner that satisfies rigorous safety standards.

Specifically, we wrote to Secretary Price in February urging him to utilize authority the Administration already has under law. Our letter highlighted that Congress enacted legislation in 2003 that would enable importation of less costly medications from abroad. Under this law, the Food and Drug Administration (FDA) can permit pharmacists and wholesale retailers to import prescription drugs from Canada. Additionally, the FDA can issue a waiver to allow individuals to import prescription drugs for personal use. However, this law stipulates that the provisions related to importation do not become effective until the Secretary of Health and Human Services certifies that the implementation of importation would pose no additional risk to the public's health and safety and would result in a significant reduction in the cost of covered products to the American consumer.

Consistent with your comments last week, the Administration has an opportunity to use existing statutory authority to quickly restore competition to the market with the introduction of cheaper, imported alternatives. Under the statute, the Secretary has the authority to issue the certification in a targeted manner to address the current market conditions in a way that readily meets safety standards. The policy can also be expressly limited so that it does not negatively affect innovator companies that invested in the development of the drug.

We urge you to work with Secretary Price to immediately begin considering certifying importation of prescription drugs from Canada in the following circumstances:

1.               The drug is off patent or no longer marketed in the United States by the innovator company that initially developed the drug;

2.              In cases where there are significant and unexplained increases in price;

3.              No direct competitor drug is currently in the market and introduction of a competitor drug will benefit the prices paid by taxpayers and consumers; or

4.              The drug is produced in another country by the name brad manufacturer that initially developed the drug or by a well-known generic manufacturer that commonly sells pharmaceutical products in the United States.

We urge you to seriously consider this existing statutory authority as well as explore other options for executive action. We also ask that you please provide your recommendations as to what additional authority you would require to protect American consumers. Of course, we would welcome your support of our legislation to bring down the costs of prescription drugs as well. 

We look forward to your timely response to this request.

HHS and NIH must act to define standards for ‘march-in’ implementation to help lower drug prices as part of comprehensive national policy

The publisher of RxforAmericanHealth says that the Department of Human and Health Services (HHS) and National Institute of Health (NIH) must act to define standards for implementation of ‘march-in’ rights to help lower prescription medicine prices.  

In an open letter to Secretary Sylvia Burwell posted on RxforAmericanHealth, Daniel Hines says such action coupled with other initiatives including price negotiation for medicines, reciprocal Memorandums of Understanding between regulatory agencies of Tier One Countries as validation of the safety and efficacy of the oversight of personally imported medicines from those countries, criminal penalties for abuse of pricing practices based on a ‘what the traffic will bear’ philosophy, greater transparency in Pharma pricing practices, and an end to direct-to- consumer advertising for prescription medicines, will ensure a ‘stakeholder’ role for the American public that supports so much of Pharma R&D, by an increased presence of consumers,  advocates and private citizens in policy development and hearings.

He notes that HHS Secretary Burwell recently denied a request from 50 members of Congress to implement march-in provisions leading to a number of Senators joining in support of the request aimed at cost increases of the Cancer drug Xtandi.

“While this issue has surfaced again as a request for similar action from even more Congressmen and advocacy groups regarding the Xtandi patent, it is the failure of HHS and NIH to face up to their responsibilities to take action in the public interest that is the greater concern,” Hines explains.

He says the “requests themselves are an exercise of the authority of Congress, as they are based upon long-standing (30 years) existing legislation that makes it evident that it is incumbent upon the agencies to take action when Congress believes it is appropriate.” 

He cites a number of reasons in support of his contention:

·       The function of the Health and Human Services is to ostensibly protect the health and well-being of Americans, while the National Institute of Health is the primary agency of the United States government responsible for biomedical and health-related research.

·       A major responsibility of each is that is must address not only the safety and efficacy of medicines, but their availability as well since if a medicine is unavailable for any reason it creates a health care crisis for those patients who are derived of the potential benefit of the denied medicine;

·       As the Congressional letter notes: ‘march-in rights’ should be asserted under 35 U.S.C. § (203) (a)(2) “when action is necessary to alleviate health and safety needs are not being reasonably satisfied” or “benefits of a patented product are not available to the public on reasonable terms”;

·       The current pricing crisis of vital medicines clearly not only do not ‘reasonably’ alleviate health and safety needs of Americans, but are actually contributing to endangering the health of patients who are denied the benefits of access to the benefits to be derived from a regimen of vital medicines;

·       Likewise, this means that the “benefits” of a patented medicine are not available to the public since a product that is unaffordable is, in and of itself, unavailable and is “not available to the public on reasonable terms”;

·       The linchpin for implementation of ‘march in’ action is the definition of ‘extraordinary circumstances’.  Webster’s defines extraordinary as unusual or different from the usual.  We can only hope that so many Americans being denied access to unaffordable medicines, the disastrous burden upon individual health, outrageous price increases over the past few years, and Direct-to-Consumer advertising of medicines that exceeds pharmaceutical industry research and development, are not considered to be usual, and that, instead, an ‘extraordinary’ situation does indeed exist.

“This places the responsibility upon HHS and NIH not to decide whether a circumstance is ‘extraordinary’ based upon personal whim and observation, devoid of any factual studies that represent standards,” Hines says.

“With that in mind, we urge steps be taken to clearly define standards that would constitute an ‘extraordinary’ situation, not only for higher-priced specialty medicines but for vital lower-priced maintenance prescriptions that have been priced beyond the reach of untold numbers of Americans leading to adverse health complications.”

Publisher of Blog on High Drug Costs calls for adoption of American Rx Bill of Rights into party platforms

Daniel Hines, publisher of RxforAmericanHealth urges support of American Rx Bill of Rights

...rising costs of medicines will lead to unwelcome consequences in terms of increased price of medicines that will act as a major driver of medical costs overall...

— Daniel Hines

ST. LOUIS, MISSOURI, USA, September 3, 2015 /EINPresswire.com/ -- The publisher of RxforAmericanHealth has called for both the Democrats and Republicans to address the issue the impact of rising prescription drug costs by incorporating into their Party platforms an American Rx Bill of Rights.
Daniel Hines says that rising costs of medicines will lead to unwelcome consequences in terms of increased price of medicines that will act as a major driver of medical costs overall and force many Americans to forego needed medical care.
He also points to the potential for abuse of Congressional intent with the announcement schedule for September 30, 2015 of the rules regarding Section 708, that could lead to the seizure and destruction of safe, authentic personally brand-name medicines from licensed, registered pharmacies subject to oversight and regulation equal to or exceeding that of US agencies.

“We have called for a Congressional Caucus to use the reservoir of good will and support of many members of Congress to protect against such abuse,” Hines notes. 

“Now, it is also time to articulate the issues caused by the pricing practices of Pharma that can threaten the ability of Americans to enjoy the health benefits offered by access to a regimen of safe, authentic medicines.

“That is why as we listed the Articles of the Rx Bill of Rights, we included an explanation of each article,” he explains.


The Articles are: 

A basic right to good health; An unaffordable medicine is unavailable; Citizens must have rights as stakeholders in debate and discussions of health policy centered on pharmaceutical costs equal to that of Pharma; The rights of Americans to due process in the protection of their rights and ability to make valid medical decisions must be protected; It is in the public interest to recognize the significant contributors to the development of research and development costs of new medicines through their tax dollars in support of grants to the National Institutes of Health (NIH), and, as such, should be protected from unfair or questionable patent protection granted to Pharma that fails to recognize the rights of American citizens; the FDA should enter into reciprocal agreements and Memorandums of Understanding (MOU) in recognition of its many agreements already in place with authorities in other countries to help ensure a safe and easily validate source of medications for Americans.

Hines cited the following explanations of the Articles:


Article One (A Basic Right to Good Health)
The impact of millions of Americans being denied the health benefits of access to a regimen of safe, affordable medicines because of cost is a national health issue that has yet-to-be-recognized consequences. 
(That is why the ability of American Citizens to make health care decisions in concert with their physicians such as the purchase of personally imported safe, affordable prescription medicines should not be hampered by any actions by government or private entities as a policy to restrict Americans' access to authentic medicines. )


Article Two (An Unaffordable Medicine is Unavailable)
A prescription medicine that is unaffordable is unavailable, thereby meeting the 'rules' of the FDA that such a medicine that is otherwise unavailable is indeed eligible to be personally imported by an American patient.
(Arbitrary denial by the FDA to such access is detrimental to the health of the patient by denying him or her access to vital maintenance medicines. This is a violation of the purpose of the FDA which is ostensibly designed to protect the health and well-being of American citizens.)


Article Three (Citizens as Stakeholders)
It is incumbent upon Congress that it act to ensure that ordinary American citizens whose health and finances are adversely affected by Pharma pricing practices, advocacy groups other than those of Pharma, are given a 'stakeholder' status equal to that of Pharma.
(The relationship between the FDA, elected officials, and Pharma has led to numerous abuses, access by Pharma to legislators and other elected officials based on the contribution of millions of dollars, favored status for Pharma representatives and their front groups as the primary representative at public hearings to determine the health care policy for Federal, State and Local Governments, thereby skewering the decision-making process.)


Article Four (Due Process)
Americans who purchase safe, affordable medicines from licensed, registered pharmacies in Tier One Countries whose standards meet or exceed those of the U.S., are the legitimate owners of their authentic medicines and are entitled to exercise their due process rights to have their personal property free from undue and unjustified seizure oar destruction by any governmental agency unless the seizing authority can demonstrate via established judicial processes and to courts that such seizures are of bogus, counterfeit or unsafe prescription medicines.


Article Five (Public Interest)
Americans are significant contributors to the development of research and development costs of new medicines through their tax dollars in support of grants to the National Institutes of Health (NIH), and, as such, should be protected from unfair or questionable patent protection granted to Pharma that fails to recognize the rights of American citizens. 
(Abuses in pricing, illegal business activities, or undue influence upon policy-making by the FDA or elected officials should result in a reduction of the patent protection afforded Pharma to the detriment of untold numbers of Americans who must be able to pay what Pharma believes the traffic will bear.)


Article Six (Reciprocity)
The FDA should extend reciprocity to other Tier One countries in the interests of the health of American citizens. 
(The majority of brand name prescription medicines sold to Americans is manufactured at plants outside the U.S., under FDA supervision, or at plants licensed by Pharma members to produce medicines under a license granted by a particular company, a validation that medicines produced outside the U.S. and sold in this country are indeed capable of being safe. Also, the FDA has entered into agreements with regulatory agencies in many countries to assume the task of overseeing ingredients manufacture of ingredients

Daniel Hines
RxforAmericanHealth
636-399-2849
email us here

Time for A Congressional Caucus to support Congress moves on Personal Importation

Publisher’s Note:  In this post, we applaud the introduction of bills in Congress in support of personal importation, while questioning the breadth of Congressional knowledge of the extent of the harmful consequences of protecting the safe haven provided in the US for the highest prescription prices in the Industrial World.  We continue our call for an Rx Bill of Rights for Americans, and urge that Congress form a Congressional caucus for Personal Importation as a first step to ensure that the vast numbers of Americans adversely affected by Pharma pricing have a voice in shaping health policies and continue to utilize the health and fiscal benefits made possible by personal importation.

Some simple questions for Congress:

• Has it finally realized that rising prescription medicine costs have created a national awareness by Americans of the harmful impact of the predatory pricing practices of Pharma upon their finances, their health and well-being?
•  Is it finally willing to accept the responsibility and opportunity created by a Maine Circuit Court ruling earlier this year that set aside a state legislature action that would have merely extended a practice of Maine Citizens for years—personally importing safe, affordable prescription medicines from Canada, Australia, New Zealand and The United Kingdom—a decision made not because the medicines were unsafe or even that personal importation was illegal, but because it is Congress’ responsibility and is within its authority to determine how personal importation should be implemented, an issue that it has favorably considered many times by members acting on the ‘reservoir of good will’ towards personal importation?
•  Is it finally convinced that Pharma will stop at nothing to justify price increases for specialty medicines that, while admittedly creating much-needed cures, threaten the very stability of our financial system, the health care system, and present the specter of rationing?
         o   Pay and Delay to protect generics from entering the market?
• o   Purchasing products from other companies and then raising the prices?
  o   Claiming extraordinary R&D investments when in reality a high percentage of the ‘new’ medicines are created through grants to University laboratories from the National Institute of Health, a governmental and tax-payer-funded entity?
  
  
• Is it finally convinced that prescription drug prices are indeed a major driver of health care costs, despite what some so-called experts have pooh-poohed as not possible because the ‘price’ of medications is ‘small’ and there would be no benefit from a major reduction of prescription medicine prices?
• Is it finally convinced that a medicine that is ‘unaffordable’ is equally indeed ‘unavailable’, and that this is the reason that as many as 55 million Americans fail to adhere to their prescribed regimen of taking their medicines simply because they cannot afford them, and does it accept responsibility for the likely harmful consequences of this?
•   Is it even vaguely aware of the potential for abuse of Section 708 of the Food Drug Administration Safety Innovation Act (FDASIA) which says a drug may be considered ‘illegal’ by the FDA because of a slight difference in labeling even though it is a perfectly safe, valid brand-name medicine that is the same as the medicine sold in the US at prices at prices as much as 60 percent higher, and will be subject to seizure and destruction?         

• Is it prepared for the spectacle of an agency ostensibly designed to protect the health and well-being of Americans—the FDA—seizing Americans’ medicines, holding them for an individual to ‘appeal’ the seizure (a complete sacrilege of the rights of Americans to due process by making their personal property subject to what are invalid seizures of their personal property, i.e., safe, valid medicines) and then, the eventual possible destruction of those medicines?                                                                       

Now, Congress has once again introduced two bills—S.122, co-sponsored by Senators John McCain (R-AZ) and Amy Klobuchar (D-MN), and HR 2228, sponsored by Representative Chellie Pingree (D-ME 1)  Dana Rohranbacher (R-CA 48)

The bills are designed to allow the personal importation of safe, affordable medicines from Canadian pharmacies.

The chances of passage are slim to none according to https://www.govtrack.us/congress/bills/114/hr2228 which gives each bill a less than four percent chance of passage, leading us to our list above of questions for Congress.

We are recommending something more--that the sponsors of the bills send ‘Dear Colleague’ letters and engage in colloquies with their fellow members. Most importantly, we believe it is time for the formation of a Congressional Caucus comprised of Senate and House members to act in support of personal importation legislation, and to also allow Americans a place at the table thereby generating additional awareness of what the consequences will be of Pharma unchecked.  This will, thereby provide the basis for an Rx Bill of Rights for Americans, which could also act as a strategy map for lowering the outrageous pricing practices of Pharma.

New Study: Proposed Medicare Part D Rule Would Increase Medicare Costs $24 Billion, Hike Senior Premiums

  

WASHINGTON, March 11, 2014 /PRNewswire-USNewswire/ -- A new actuarial study released by The Pharmaceutical Care Management Association (PCMA) examining the impact proposed changes to the Medicare prescription drug program finds that eliminating preferred pharmacy networks in Part D would increase premiums by approximately $63 annually for over 75 percent of Part D enrollees and raise overall program costs by an estimated $24 billion over the next ten years.

"CMS' proposal to eliminate preferred pharmacy networks will make it harder and more expensive for seniors to access prescription drugs," said PCMA President and CEO Mark Merritt.

The study examines the sections of CMS' proposed rule on preferred pharmacy networks. Currently, more than 75 percent of Part D beneficiaries are enrolled in plans that feature preferred pharmacy networks.

Key findings from the study, which was sponsored by PCMA and prepared by Oliver Wyman, include:

• As of February 2014, more than 75% of prescription drug plans (PDP) enrollees are in plans with preferred pharmacy networks and these enrollees could be adversely affected by the elimination of plans utilizing preferred pharmacy networks.

• The preferred pharmacy networks provision would increase premiums for the affected population by an average of approximately $63 per year for the 2015 plan year.

• The rule could increase cost sharing among PDP enrollees by an average of $80 to $100 per year.

• Since the rule would inflate the national average benchmark for Part D plans, CMS would pay an estimated additional $64 in direct subsidies per beneficiary per year in 2015, for a total increased payment of nearly $1.5 billion in 2015 across all PDP enrollees, based on Part D enrollment of approximately 23 million beneficiaries.

• Over a 10-year period, the increased cost of eliminating preferred pharmacy networks is estimated to be approximately $990 per affected enrollee, and the cost would be approximately $24 billion to CMS in the form of higher direct subsidy payments.

Oliver Wyman's findings are generally consistent with a separate Milliman analysis that found the entirety of the proposed rule will increase Part D costs by up to $1.6 billion in 2015.

In addition, a recent poll found that seniors in plans with preferred pharmacy networks are overwhelmingly satisfied, citing lower costs, convenient access to pharmacies and other benefits, according to a survey from Hart Research Associates. The survey found that 85 percent of seniors surveyed are satisfied with their preferred network plan. In addition, the survey found that four in five seniors would be disappointed if their preferred network plan is eliminated.

The Medicare Payment Advisory Committee has warned CMS that the proposed changes to preferred pharmacy networks could lead to disruptions in beneficiaries' access to medicines.

PCMA represents the nation's pharmacy benefit managers (PBMs), which improve affordability and quality of care through the use of electronic prescribing (e-prescribing), generic alternatives, mail-service pharmacies, and other innovative tools for 216 million Americans.

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Barrier to effective treatment for seniors - the cost of medicine... Elderly in the US find medication costs prohibitive

Publisher's Note: While Congress slaps itself on its collective back, the fact remains that no concrete steps have been taken to apply real-life solutions to problems such as the cost of prescription medicines, a major driver of our health care cost crisis which is a prime factor in the fiscal crisis the country faces. The question must be asked: Where are the Senators and Congressmen who have sponsored bill after bill in support of personal importation of prescription medicines? We have noted in previous entries that they have missed an obvious opportunity to advance lower medical costs by not bringing concrete proposals forth. And, ironically, while hailing the effectiveness of Part D, this latest report shows that even with Part D 'benefits', 10 percent or more of America's elderly cannot afford their medicines.

August 2, 2011--As many as one in ten elderly people in the US, registered with Medicare, do not stick to their prescribed medication because it is too expensive, according to Dr. Larissa Nekhlyudov and colleagues from Harvard Medical School. Their work, funded by the National Institute on Aging and the National Cancer Institute, shows that cost-related medication non-adherence - skipping pills to make the medicine last longer, and not filling in a prescription because it is too expensive - is common among this group, whether or not they suffer from cancer.

This suggests that elderly cancer survivors do not face a greater financial burden related to medical costs than those without cancer. The study is published online in Springer's Journal of Cancer Survivorship.

As the population ages, the cost of medicines is rising and there is evidence that this has resulted in financial burden for patients. Cancer costs in particular have grown substantially and patients with cancer are faced with significant out-of-pocket expenses during diagnosis, treatment and follow-up care. Many cancer survivors also take drugs for other chronic illnesses (or co-morbidities), including hypertension, diabetes, hyperlipidemia and osteoporosis.

In order to better understand cancer patients' medication issues, the authors analyzed data from the 2005 Medicare Current Beneficiary Survey and Medicare claims. They looked at cost-related medication non-adherence, spending less on basic needs to afford medicines and other cost-reduction strategies among both cancer survivors and non-cancer sufferers.

Nekhlyudov and team found no differences in the rate of cost-related non-adherence between cancer survivors (10 percent) and those without cancer (11 percent). Six percent of cancer survivors and nine percent of those without cancer also said they spent less on basic needs (such as food and heat) so that they could afford medicines. In addition, more than half of all enrollees used other cost-saving measures, including taking generic medications, requesting free samples and comparing pharmacy prices before buying drugs.

Dr. Nekhlyudov concludes: "As the number of cancer survivors continues to increase and get older, the findings of our study enhance our understanding of the potential barriers to effective treatment of their non-cancer co-morbidities."

PhRMA stands behind role in Healthcare negotiations

The following Publisher’s note is the opinion of Daniel Hines and RxforfAmericanHealth.blogspot.com, and does not reflect the viewpoint of Kaiser: The interview is reprinted here as a public service to offer insights into the workings of a powerful lobby within The Beltway. Gone are the days that legislation was shaped by citizen involvement, public hearings, and testimony from concerned citizens with specialized knowledge, not special interests: Yesterday we blogged about how PhRMA’s role in the behind-closed-door Healthcare Reform ‘negotiations’ and its supposed savings for Seniors in The Doughnut Hole really were a Magic Lantern Show. The following interview and PhRMA’s comments about not being able to identify the true extent of the savings provide, we believe, validity to our observations.

The complete, unedited interview/story follows:

PhRMA Chief Says Support For Health Law 'Was Right Decision'—The KHN Interview

By Bara Vaida

JUL 13, 2011

One year after John Castellani took control of PhRMA, the former manufacturing executive has steered the drugmakers' lobbying group to be ready for battle with the White House.

Gone are the days where the Pharmaceutical Research and Manufacturers of America, is making deals with a Democratic White House and spending $101 million on advertising to promote the new health law. That was the successful strategy of PhRMA’s previous leader, former Rep. Billy Tauzin, R-La. to ward off new regulations for the industry in the law. Now PhRMA has signaled that it will fight any attempt by congressional Democrats or the White House in the current deficit reduction talks to save money by cutting drug spending in government programs.

In a hastily scheduled press conference this week, Castellani made it clear that PhRMA opposes a Democratic proposal that would require drugmakers to pay rebates to the Medicare program for beneficiaries who qualify for both Medicare and Medicaid, known as the "dual eligibles." He said it would "do serious harm to the industry, serious harm to (pharmaceutical) jobs and we oppose it. … We opposed it in the context of the discussions around the [health law] and we oppose it now." And if the proposal succeeds, Castellani said there "would be the risk" that drug companies would begin to move their operations to countries outside the U.S.

Still, Castellani says the industry doesn’t regret supporting the health law because he says it "was the right decision under the political context at the time," although his group would like to see some changes in the law.

Castellani recently spoke with Kaiser Health News' Bara Vaida. Here is an edited excerpt:

Q. PhRMA made a $80 billion to $100 billion deal with the Obama administration during the health reform debate to stave off more regulations, angering many of your Republican allies in Congress. Are you sorry the industry made that deal?

A. No. No. It was the right decision under the political context at the time. You had a Democratic president and a Democratic Congress and sweeping legislation that affected our industry. The decisions that were made were appropriate given the political circumstances.

Q. How much was the final deal? $80 billion or $100 billion? What number is right?

A. I can't comment given the nature of how [the Medicare rebate] affects individual companies.

Q. You have said you would like to see the Independent Payment Advisory Board (IPAB) in the health law repealed. What are you doing specifically to lobby on that?

A. IPAB is fundamentally flawed. It has to be repealed in its existing form or mitigated. What we have been doing is talking to other groups that are affected by it and talking to members of Congress. There is a substantial bipartisan effort to repeal [IPAB] that is almost unrelated to what we are doing about it.

Q. The president targeted the drug industry in his recent deficit reduction plan, how do you feel about that?

A. The president proposed to shorten the period of data exclusivity for biologics. It was disappointing and a bit surprising. He talked in the State of the Union speech about owning the future and investing in technology, and (his efforts on biologics) is discouraging what he wanted to encourage.

Q. What about the deficit reduction plan proposed by Rep. Paul Ryan, R-Wis. Would you support or oppose that? Do you see any dangers to the drug industry?

A. We don't know enough about it. We do think we need to have a debate about how do you fundamentally change Medicare so that it can be affordable (for the future). All ideas ought to be on the table.

Q. What are you doing to manage the drug industry's reputation with the public? People feel drug companies charge too much for their products.

A. Obviously we need to be trusted by public policymakers and by patients and by clinicians, and that is something that we are committed to doing. The problem is the delivery system by which people get medicines. [The system] is designed to disproportionately show the cost of medicine, so even though we are only about 10 percent of total health care costs, we are 40 percent of out-of-pocket expenses. That makes people think that we are the most expensive part of the health care, when in fact we may have the most value and be much less expensive than acute care. The other problem is that we haven't done a good enough a job of explaining the scientific process in how difficult and potentially rewarding it is and we need to help people understand where we fit in the economy and the kinds of jobs we produce and the kinds of value-added we provide.

Q. What about PhRMA's political reputation? Some Republicans remain angry over your support for health reform?

A. People try to portray us as Democrat or Republican. We are not. We are pro PhRMA. Lawmakers that recognize the value of PhRMA to their states and the economy and the costs of medicine are the people we support. The grumbling will always be there. There will always be someone who will find a reason why we should be doing something differently than we are going to do.

Q. You've acknowledged the industry spent about $25 million in the 2010 election cycle to get candidates elected. How much will you spend in the 2012 cycle?

A. We will support the candidates that support the industry, and I don't know who that is yet. It's too early. Really. I am not playing hide the peanut. I will tell you when I know (how much) it is.

Q. You say 75 percent of all prescriptions filled are generics rather than brand-name, what does that mean for PhRMA and the industry's business model?

A. Generics are an important part of the medicine life cycle. We produced all of them. They are our children. But if you are going to continue to innovate, you have to continue to support returns for the inordinate investment it takes to find new medicines. It is $1 billion to $1.3 billion over 10 to 12 years to develop a new medicine, so you have to have the mix of patent protections if you are going to have the rewards for that innovation. If you don't want to pay for the innovation, then you have to say to American patients, we have invented everything that we can invent. But we don't believe that. There are still discoveries out there. The problem with what the president proposed and when people say we ought to go to all generics, is generic companies don't spend money on research and development. We do.

Q. What about comparative effectiveness. PhRMA on its blog says it is a good thing, but the industry fights it.

A. Here is one of the issues that is difficult to deal with. The discovery process is an iterative one. Let's take some of the work done on HIV/AIDS. When (researchers) started out, you were talking about extending life for six months, then a year, then 18 months and then over years it turned HIV into a chronic disease. Clinicians learned, and the results got better over time. Comparative effectiveness can be good if it looks at the spectrum of the options available over a long enough period of time to know what the real value is.

Kaiser Health News reporter Mary Agnes Carey contributed to this article.