[Viva] FW: CTAC Daily Info - October 27

[Tami S.]

In this e-mail:

1.    Access-to-medicine bill gets grim prognosis
2.    Glaxo to Pay $750 Million for Sale of Bad Products
3.    Trade deal would include increased protection for brand-name drugs






1.




Access-to-medicine bill gets grim prognosis


Gloria Galloway


Ottawa— Globe and Mail Update
http://www.theglobeandmail.com/news/politics/access-to-medicine-bill-gets-gr
im-prognosis/article1773866/


Published Tuesday, Oct. 26, 2010 5:44PM EDT


A bill to fix a heavily flawed five-year-old plan to sell cheap Canadian
medicines to impoverished countries is set to die because the New Democrat
who sponsored it has resigned and the Conservatives are unlikely to allow
another MP to take it over – a courtesy that was once extended to Stephen
Harper.

The House of Commons must give unanimous consent for a bill that has been
abandoned by one member to be sponsored by another. In this case, when Judy
Wasylycia-Leis quit her job as a federal MP to run for municipal politics in
Winnipeg, her New Democrat colleague Brian Masse was willing to take over
Bill C-393, which aimed to reform the Canadian Access to Medicines Regime.

There is precedent for such a handover. In 1997, when Mr. Harper quit his
seat in the back benches of the Reform Party caucus, the House unanimously
agreed to let Preston Manning take over his bill to establish the terms and
conditions that must apply to a referendum relating to the separation of
Quebec from Canada.

But Richard Elliott, the executive director of the Canadian HIV/AIDS Legal
Network, said Tuesday he has been told there will be no such goodwill
extended with regard to Ms. Wasylycia-Leis’s bill.

“We’ve been told directly by a Conservative member of Parliament that we can
be guaranteed that the bill will not survive a motion before the House of
Commons for a new sponsor,” Mr. Elliott said.

Conservative officials would not say Tuesday whether they were prepared to
allow the bill to change hands.

Canada's Access to Medicines Regime was introduced by the Liberal government
of Paul Martin in 2005. It was meant to follow through on Jean Chrétien's
Pledge to Africa by allowing generic drug makers to create one-time versions
of essential brand-name medicines for sale to the poorest parts of the
planet.

But it was hopelessly complicated from the start and, over the past five
years, just one Canadian generic drug company has managed to use it to send
a single type of AIDS medicine to a single country – Rwanda.

Ms. Wasylyicia-Leis had hoped to untangle many of the snares with her
legislation. But the reforms she proposed are not popular with brand-name
drug companies. Nor are they supported by the Conservatives, who say they
violate intellectual property rights.


There are also a number of Liberal MPs who oppose her bill. Marc Garneau,
the industry critic, has argued that research-driven industries will not
stay in Canada if the products of their labours can be reproduced and sold
cheaply overseas.

Still, the bill had made it through second reading in the House of Commons
and is now before the industry, science and technology committee.

Mr. Elliot he said he fears the Conservative members of the committee will
make changes that will pull the teeth out of the bill at its next meeting on
Thursday. “I think the writing is absolutely on the wall that they will be
bringing forth amendments at the committee that are aimed at deleting the
core provisions of Bill C-393, the core provisions that are aimed at fixing
the current Canadian Access to Medicines Regime.”

The Industry committee heard testimony about the bill on Tuesday including a
presentation from a group called the National Advocacy Committee of the
Grandmothers to Grandmothers Campaign, which said it is time to fulfill the
promise made to the world’s poor.

Even if the bill makes it through the committee in a workable form, it will
likely die in the House.

Mr. Elliott sent a letter last week to the House Leaders of the four
political parties reminding them of the time that Mr. Harper’s bill survived
by being passed on to Mr. Manning. “All that is required is a commitment to
following precedent, a belief in democratic principles and a little
courtesy,” he said in the letter.

James Kusie, a spokesman for Conservative House Leader John Baird, said
Tuesday that his office had yet to receive Mr. Elliott’s letter. “The fact
that it was sent to the media prior to our Minister receiving it or having a
chance to review it says something,” Mr. Kusie said.

As the law stands, companies that wish to reproduce brand-name drugs for
poor countries may submit an application that covers cover no more than one
country, one drug and one quantity of medicine at a time.

The legislation also applies only to a limited list of medicines, many of
which developing countries can already obtain more cheaply from India, and
the process of adding a drug takes several months.

Ms. Wasylycia-Leis’s bill would extend the scope of the generic licences,
eliminate the narrow list of eligible drugs, end the two-year time limit on
compulsory licences and cut through international red tape.

“Lives hang in the balance,” Mr. Masse said. “And we decide the fate of men,
women and children and whether they are going to get treatment from diseases
that they are suffering from and dying from.”





2.


Glaxo to Pay $750 Million for Sale of Bad Products


By GARDINER
HARRIS<http://topics.nytimes.com/top/reference/timestopics/people/h/gardiner
_harris/index.html?inline=nyt-per> and DUFF
WILSON<http://topics.nytimes.com/top/reference/timestopics/people/w/duff_wil
son/index.html?inline=nyt-per>


Published: October 26, 2010
http://www.nytimes.com/2010/10/27/business/27drug.html?pagewanted=2&_r=1


GlaxoSmithKline<http://topics.nytimes.com/top/news/business/companies/glaxos
mithkline_plc/index.html?inline=nyt-org>, the British drug giant, has agreed
to pay $750 million to settle criminal and civil complaints that the company
for years knowingly sold contaminated baby ointment and an ineffective
antidepressant — the latest in a growing number of whistle-blower lawsuits
that drug makers have settled with multimillion-dollar fines.

Enlarge This
Image<javascript:pop_me_up2('http://www.nytimes.com/imagepages/2010/10/27/DR
UG.html','DRUG_html','width=720,height=654,scrollbars=yes,toolbars=no,resiza
ble=yes')>

http://graphics8.nytimes.com/images/2010/10/27/business/DRUG/DRUG-articleInl
ine.jpg<javascript:pop_me_up2('http://www.nytimes.com/imagepages/2010/10/27/
DRUG.html','DRUG_html','width=720,height=654,scrollbars=yes,toolbars=no,resi
zable=yes')>


C.J. Gunther for The New York Times


Cheryl Eckard, center, with her lawyers Lesley Ann Skillen and Neil Getnick
on Tuesday.


Multimedia


http://graphics8.nytimes.com/images/2010/10/27/business/27drug-gfx/27drug-gf
x-thumbWide.jpgGraphic
<javascript:pop_me_up2('http://www.nytimes.com/imagepages/2010/10/27/busines
s/27drug-gfx.html?ref=business','687_429','width=687,height=429,location=no,
scrollbars=yes,toolbars=no,resizable=yes')>


Big Settlements in Drug
Cases<javascript:pop_me_up2('http://www.nytimes.com/imagepages/2010/10/27/bu
siness/27drug-gfx.html?ref=business','687_429','width=687,height=429,locatio
n=no,scrollbars=yes,toolbars=no,resizable=yes')>


Altogether, GlaxoSmithKline sold 20 drugs with questionable safety that were
made at a huge plant in Puerto Rico that for years was rife with
contamination.

Cheryl D. Eckard, the company’s quality manager, asserted in her
whistle-blower suit that she had warned Glaxo of the problems but the
company fired her instead of addressing them. Among the drugs affected were
Paxil<http://topics.nytimes.com/top/news/health/diseasesconditionsandhealtht
opics/paxil_drug/index.html?inline=nyt-classifier>, an antidepressant;
Bactroban, an ointment;
Avandia<http://topics.nytimes.com/top/news/health/diseasesconditionsandhealt
htopics/avandiadrug/index.htm?inline=nyt-classifier>, a troubled
diabetes<http://health.nytimes.com/health/guides/disease/diabetes/overview.h
tml?inline=nyt-classifier> drug; Coreg, a heart drug; and
Tagamet<http://health.nytimes.com/health/guides/poison/h2-receptor-antagonis
ts-poisoning/overview.html?inline=nyt-classifier>, an acid
reflux<http://health.nytimes.com/health/guides/disease/gastroesophageal-refl
ux-disease/overview.html?inline=nyt-classifier> drug. No patients were known
to have been sickened, although such cases would be difficult to trace.

In a rising wave, recent lawsuits have asserted that drug makers misled
patients and defrauded federal and state governments that, through
Medicare<http://topics.nytimes.com/top/news/health/diseasesconditionsandheal
thtopics/medicare/index.html?inline=nyt-classifier> and
Medicaid<http://topics.nytimes.com/top/news/health/diseasesconditionsandheal
thtopics/medicaid/index.html?inline=nyt-classifier>, pay for much of health
care.

Using claims from industry insiders, federal prosecutors are not only
demanding record fines but are hinting at more severe actions.

Suffering a research drought, drug makers have laid off thousands of
employees. Some of those dispatched have in turn filed whistle-blower
lawsuits that can lead to criminal investigations.

Justice Department officials announced the
settlement<http://www.justice.gov/opa/pr/2010/October/10-civ-1205.html> in a
news conference Tuesday afternoon in Boston, saying a $150 million payment
to settle criminal charges was the largest such payment ever by a
manufacturer of adulterated drugs. The outcome also provides $600 million in
civil penalties. The share to the whistle-blower will be $96 million, one of
the highest such awards in a health care fraud case.

When asked whether any individual could be charged in addition to the
corporation charges, Carmen M. Ortiz, the United States attorney for
Massachusetts<http://www.justice.gov/usao/ma/Press%20Office%20-%20Press%20Re
lease%20Files/Oct2010/GSKPressRelease.html>, would say only that the
investigation was not yet complete.

GlaxoSmithKline released a
statement<http://www.gsk.com/media/pressreleases/2010/2010_pressrelease_1011
6.htm> saying that it regretted operating the Puerto Rico plant in violation
of good manufacturing practices. The company said the problem had involved
only one plant that was closed in 2009. American shares in the company fell
0.35 percent on Tuesday.

Tony West, the assistant attorney general in charge of the department’s
civil division, said hundreds of such lawsuits were awaiting federal review.

“We’ve opened more investigations, we’ve recovered more taxpayer dollars
lost to fraud, we’ve had more convictions, higher penalties and fines in the
last two years than we’ve had in any other two-year period,” Mr. West said
in an interview.

Whistle-blowers who win earn a cut of the eventual fine. Ms. Eckard will
collect $96 million from the federal government, and she will collect
additional millions from states.

The suits, all filed under seal, have for years been rising in size and
scope, but the collective threat to the industry has been largely unnoticed
because the growing mountain is obscured by a wall of judicial secrecy. Each
successful claim begets more suits, with more being filed almost every week.

The suits are filed under a federal law originally intended to stop Civil
War hucksters from selling rancid meat to the Union Army by paying bounties
to tipsters. The pharmaceutical industry has become the law’s most
successful target because the government now buys far more pills than
bullets, and because fraud in health care is common.

Health care cases accounted for some 80 percent of the $3.1 billion
recovered by the Justice Department under the false claims act last year,
the Taxpayers Against Fraud Education Fund, a nonprofit whistle-blower
advocacy group in Washington, reported on Monday. Most of the money is
typically returned to the programs in which false claims were filed, like
Medicaid and Medicare.

The Food and Drug
Administration<http://topics.nytimes.com/top/reference/timestopics/organizat
ions/f/food_and_drug_administration/index.html?inline=nyt-org> and the
inspector general of the Health and Human Services
Department<http://topics.nytimes.com/top/reference/timestopics/organizations
/h/health_and_human_services_department/index.html?inline=nyt-org> both
announced recently that they would pursue charges against executives
personally under a strict liability provision of the law, something that has
not been done since 2007 when the three top executives of Purdue Pharma were
convicted, sentenced to probation and personally fined $34 million while
Purdue paid $600 million.

The rule allows executives to be prosecuted and barred from government sales
even if they were not aware of specific violations.

Legislation could make such claims easier to win. Last month, the House of
Representatives passed a bill that permits executives to be barred even if
they have left the company where the fraud occurred and that permits the
inspector general to prosecute parent companies for the sins of
subsidiaries.

Pfizer<http://topics.nytimes.com/top/news/business/companies/pfizer_inc/inde
x.html?inline=nyt-org> alone has settled four whistle-blower cases since
2002, and it paid a $2.3 billion fine last year, the largest in history.
Whistle-blower cases have become so routine that Wall Street no longer takes
much notice of individual suits, while the growing trend remains hidden.

When GlaxoSmithKline announced in July that it was setting aside $2.4
billion for legal costs, including enough to pay for the investigation into
its Puerto Rico problems, the announcement was greeted with a yawn.

Still, the case may lead to a collective industry shiver because it opens a
new frontier for whistle-blower suits. Nearly all previous cases against the
industry involved illegal marketing. This is the first successful case ever
to assert that a drug maker knowingly sold contaminated products.

“This case will change the way drug makers run their factories,” Ms.
Eckard’s lawyer, Neil Getnick, said.

Some of the antidepressant Paxil CR produced at the plant was ineffective
because a layer of active ingredient split from a layer of a barrier
chemical during manufacturing, the government said, and some lots contained
only the barrier chemical.

“The harm is really in the public’s confidence in the health care industry,”
Ms. Ortiz said. “When you go to a pharmacy and you buy a drug, you expect
that drug is what it purports to be and you don’t expect it to have any
micro-organisms or not be sterile or not have the power or have too much
power.”

Ms. Eckard’s role in the case began in August 2002 when GlaxoSmithKline sent
her to Cidra, south of San Juan, to lead a team of 100 quality experts to
fix problems cited by an F.D.A. warning letter a month earlier.

This was GlaxoSmithKline’s premier manufacturing facility, producing $5.5
billion of product each year. But Ms. Eckard soon discovered that quality
control was a mess: the water system was contaminated; the air system
allowed for cross-contamination between products; the warehouse was so
overcrowded that rented vans were used for storage; the plant could not
ensure the sterility of intravenous drugs for
cancer<http://health.nytimes.com/health/guides/disease/cancer/overview.html?
inline=nyt-classifier>; and pills of differing strengths were sometimes
mixed in the same bottles.

Although F.D.A. inspectors had spotted some problems, most were missed. And
the company abandoned even the limited fixes it promised to conduct, the
unsealed lawsuit says. Ms. Eckard complained repeatedly to senior managers;
little was done. She recommended recalls of defective products; recalls were
not authorized. In May 2003, she was terminated as a “redundancy.”

She complained to top company executives, but she was ignored even after
warning that she would call the F.D.A. So she called the F.D.A. and sued.
The agency began a criminal investigation and used armed federal marshals in
2005 to seize nearly $2 billion worth of products, the largest such seizure
in history. Unable to fix the plant, GlaxoSmithKline closed it in 2009.



3.


Trade deal would include increased protection for brand-name drugs


While many Canadians are barely aware of the trade talks, Peter Van Loan,
the International Trade Minister, has predicted that the eventual deal would
bring billions of dollars in benefits to Canada’s economy.

Aaron Lynett/National Post
http://www.nationalpost.com/news/Trade+deal+would+include+increased+protecti
on+brand+name+drugs/3719673/story.html

Tom Blackwell, National Post · Monday, Oct. 25, 2010

While many Canadians are barely aware of the trade talks, Peter Van Loan,
the International Trade Minister, has predicted that the eventual deal would
bring billions of dollars in benefits to Canada’s economy.

Canada’s pharmaceutical industry and the European Union have been quietly
lobbying for changes that could give brand-name drugs several years more
patent protection here — and potentially add hundreds of millions of dollars
to Canadian medication costs annually.

The EU has reportedly proposed the measures be included in a landmark
free-trade agreement now being negotiated between the jurisdictions, with
the fifth round starting last week in Ottawa.

The changes would delay the entry of cheaper, generic copies of medication
onto the market, but brand-name companies and some provinces say the
measures are needed to restore fairness to the complex patent system, and
generate more drug research in Canada.

The generic industry, however, is voicing outrage at the proposals,
insisting they will do nothing positive for Canada.

“This would be a nasty piece of policy if it went through,” said Jim Keon,
head of the Canadian Generic Pharmaceutical Association.

“They see this trade negotiation as something they can glue their policy on
to ... (But) it’s completely at odds with what governments want.”

Regardless of the merits of such changes, the impact of postponing the
arrival of generics — which sell for as little as a quarter of the brand
price — is clear.

Lipitor, a blockbuster cholesterol drug, for instance, had close to $1
billion in sales before it came off patent recently, meaning potential
savings of hundreds of millions of dollars for provincial drug programs,
workplace health plans and uninsured Canadians on that medicine alone.

The brand-drug sector, however, argues that this country needs to bolster
its medication-patent system and make it more equitable if it wants to
attract research and development money.

“We have to move away from a policy that discourages innovation and
encourages copying,” said Russell Willilams, CEO of Canada’s Research-based
Pharmaceutical Companies, the chief industry trade group.

“That is not an environment that is going to encourage global industry to
invest research dollars in Canada.”

At least three provinces have written letters in support of the industry
stance, including Alberta, where a senior aide in the premier’s office used
to work for a major pharmaceutical company.

While many Canadians are barely aware of the trade talks, Peter Van Loan,
the International Trade Minister, has predicted that the eventual deal would
bring billions of dollars in benefits to Canada’s economy.

He refused in an emailed statement to comment on the drug-patent issue,
saying he does not want to negotiate in the media, but noted that the
government “is committed to opening markets for Canadian workers and
businesses.”

The negotiations are unprecedented, the world’s first free-trade talks that
have gone far beyond the usual trade issues to address a variety of ways to
mesh the EU and Canada’s economies, said Debra Steger, a University of
Toronto law professor.

The two sides do not typically reveal their bargaining positions, but
observers say the Europeans are pushing to have at least three drug-patent
provisions included in the deal.

The changes would add to a tangled system that starts with a 20-year patent
on newly invented medicinal molecules.

One change would extend the patent period to compensate for delays in the
approval process for a new drug.

Another would lengthen the so-called data-protection period by about two
years, delaying generic copying of certain drugs without active patents.

The issue being pursued most vociferously by the industry, though, relates
to a process under which brand companies can challenge a generic firm as it
applies to copy a drug still under patent.

The brand gets an automatic stay of up to two years on the generic version
entering the market while a court rules on the issue. But if the brand
company loses, it cannot appeal the decision, unlike the generic competitor.

The brand-name industry is pushing for that right of appeal.

Alberta decided to write a letter of support in July after the brand sector
raised the issue with Premier Ed Stelmach, said George Samoil, director of
operations in the Premier’s office.

He said the fact he had himself earlier been manager of government relations
for AstraZeneca had nothing to do with the province’s stance.

Quebec and New Brunswick also sent letters of support to Tony Clement, the
federal Industry Minister.

“It seems pretty straightforward that if Canada wants to be in line with one
of its major trading partners, that its intellectual property protection
policies be in line also,” Mr. Samoil said.

The generic manufacturers, though, argue the brand companies do not need
that right of appeal because they have a whole other avenue of legal attack
once the generic product makes it onto the market.

The National Union of Public and General Employees has also keyed in on the
issue. Larry Brown, the union’s secretary-treasurer, called the brand-name
industry’s demands a case of “excessive and crass self-interest” that would
drive up drug costs by as much as 30% a year.

Granting the EU request for the changes might well make sense as part of the
trade deal as a whole, which inevitably will involve give and take by both
sides, said Richard Gold, a law professor with McGill University and a
leading intellectual property expert.

The measures on their own, though, would not benefit Canada much, he said.

Despite the industry’s assertions, there is little evidence that bolstering
patent protection here leads to more R&D investment, argued Prof. Gold.

“Is this going to be a substantial benefit to Canadian companies, the
Canadian economy, access to medicine? ... No.”

Prof. Steger said Canadians should judge whatever trade deal is reached with
the EU as a whole, not based on specific concessions that are made or
gained, saying the accord could be “extremely positive.”











Béatrice Cardin

Organizational Development and Communications Manager

Canadian Treatment Action Council (CTAC)

Phone/Fax:  (416) 410-6538

ctac at ctac.ca<mailto:ctac at bellnet.ca>

www.ctac.ca<http://www.ctac.ca/>



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