KOPEL: SOME BIG DRUG, GENERIC FIRMS AGREE NOT TO COMPETE
1976: Driving a stake (we thought) through the brand-name-drug monopoly
A Denver Post article recently gave me a headache by reminding me of the motto that kept me sane while serving 18 of my 22 years in the House as a member of the minority party: “The bad guys always win... eventually.”
Thirty-two years ago, the Colorado Legislature broke the back of many expensive drug costs by approving a Colorado law authorizing substitution of generic drugs unless doctors or patients said they preferred the brand-name versions.
The article that caused my pain reported that the pharmaceutical industry is trying to reverse that progress by forging cozy agreements with the makers of generic drugs. If nothing stops them, generic drugs will be taken off the market, and the price of prescription drugs will skyrocket immediately. The Federal Trade Commission already has begun legal action to block some agreements.
The article didn’t say how much the pharmaceutical firms are paying the makers of generic drugs to stop competing, but it did indicate the FTC is asking Congress to ban those agreements.
The fight for generic drugs in the Colorado Legislature arose in 1975, and, at the end of that session, it carried over into 1976. Some of the primary players in this drama, including lobbyist Jon Holm and Sen. Les Fowler, R-Boulder, have since died, and there are probably fewer than half-a-dozen lobbyists or staffers from that period who are still active at the Capitol.
So this would be a good time to shine a light into this dim corner of Colorado’s legislative history. Here’s what happened:
My 1975 generic substitution bill, which had already passed the House, died in Senate Appropriations Committee. Sen. Joe Shoemaker, R-Denver, gave me three minutes to explain the bill. Standing at the door was Holm, a lobbyist for the brand-name drug manufacturers.
Fowler, R-Boulder, moved to kill the bill, and it died on a 9-to-6 party-line vote.
In 1976, Dick Lamm, a Democrat, was Colorado’s governor. At that time, the constitution gave the governor the power to set the agenda for the short session by placing measures on the “call.”
I told Lamm, “If you were to limit my request to one measure, let it be the drug substitution bill.”
During the fall and winter of 1975-’76, I had prepared by meeting with pharmacy school students and faculty at the University of Colorado and with the leadership of the Colorado Pharmacists Association, which, in the ’75 session, had worked against my bill.
Rep. Frank Traylor, R-Wheat Ridge, a physician, and I combined to write an analysis of why we needed to change the laws that denied drug prescription substitution. The article appeared on page one of the Rocky Mountain News “Trend” section in December 1975.
Our 1976 measure, House Bill 1087, was to be based on the newly enacted and well-written California law on generic-drug substitution.
The early days of the ’76 session were spent signing up 36 House and 18 Senate sponsors. The most difficult task at this point was to persuade Sen. Hank Brown, R-Greeley, to carry the bill in the Senate. After many days, we reached a diplomatic conclusion.
Brown said he would add his name as a Senate sponsor, but not as chief sponsor. Since co-sponsors are listed alphabetically, his name would appear first if I didn’t ask Bob Allshouse, R-Aurora; Senate President Fred Anderson, R-Loveland; or Tilman Bishop, R-Grand Junction, to sign the bill. I didn’t, and once on the bill as the first Senate sponsor, Brown became an enthusiastic supporter and chief Senate sponsor of the measure.
The bill encountered little difficulty in the House, which stood by its 1975 approval. Meanwhile the pharmacists had hired a lobbyist, Fred Sievers. Their executive director, Myrle Myers, supported the substitution law.
The pharmacy association went on record in favor of the substitution bill, so long as “no additional agency was established to determine what could be or could not be so substituted and which would essentially duplicate federal programs.” This position was hammered out at a late-night meeting of pharmacists, which I attended. It was crucial that the chief sponsor be there to answer hard questions from many present who opposed the measure.
HB 1087 passed the House, 44-15. Now the real battle was about to begin. I had heard reports that the Pharmaceutical Manufacturing Association was prepared to let what happened in Colorado determine its actions in nearby states —– and that it was ready to spend whatever was needed to kill the bill here.
Holm was on board again as chief lobbyist. To aid him, the manufacturers assigned three “detail” men. Almost every day, standing at the brass rail in the corridor leading to the Senate chambers, would be Holm and his three experts from pharmaceutical giants Eli Lilly, Sandoz and Merck, cornering senators as they passed by.
The bill was assigned Feb. 17 to Health and Welfare, chaired by Sen. Ted Strickland, R-Westminster, who had voted against the measure in the same committee in 1975. And there, in 1976, the bill sat for one month and 12 days.
In March, Brown completed a rewrite of the House bill. His version eliminated the board to determine which drugs could not be substituted (a response to the pharmacists’ position). As an alternative, Brown tightened the definition of what could be substituted. Otherwise, the bill was intact.
Strickland scheduled the measure as the next-to-last item to be heard by his committee on the morning of March 29, the final day for the Senate Committee to hear House bills. The committee began work at 9 a.m. Three hours later, it was still considering a measure scheduled just before House Bill 1087. That measure, which dealt with emergency medical services, had drawn more than a hundred people into the committee’s chambers.
Strickland was in no hurry to finish. He told the audience several times that anyone who wished to speak should feel free to do so. He also indicated that anything not voted on by 1 p.m. was dead. I put on my fiercest face for the audience, backed by my position as Judiciary Chairman in the House, where Democrats held the majority. No one in the audience offered to speak. The bill on emergency medical services was adopted unanimously, and our bill was on the table.
“We have 15 minutes left,” said Strickland, as soon as Brown took about five minutes to explain the bill and offer his amendments. “So the people for and the people against have six minutes each.”
That was fine with us. Strickland’s committee had seven members, three Democrats and four Republicans. Sen. Vincent Massari, D-Pueblo, was out sick that day. This made the vote 3-3, with Sen. Dennis Gallagher, D-Denver, and Sen. Regis Groff, D-Denver, plus Sen. Bill Hughes, R-Colorado Springs, who favored the bill.
On a tie vote, a bill loses. However, Sen. Joseph Schieffelin, R-Lakewood, had accepted a noon invitation to speak in Colorado Springs at an anti-Equal Rights Amendment meeting, and he had left the Capitol at 10:30 a.m. That left Strickland and Sen. Harold McCormick, R-Cañon City, in opposition.
No one’s mind was changed in the 12 minutes of debate, although some of the pharmacy manufacturing people who had flown in from other parts of the country to testify against the bill must have wondered about how our system worked.
The bill was reported favorably, 3-2. It would not have become law, however, if Strickland had put it on the table for hearing and vote at 9 a.m. instead of 12:45 p.m.
But there was no time to rest on our laurels. A few hours later, we learned Strickland had asked Pharmacy Board Executive Secretary Mike Simmons, a foe of the bill, how much it would cost to implement the bill. Simmons, we learned, had instantaneously produced a letter saying the bill would require a $22,000 appropriation for an additional Pharmacy Board inspector.
This letter was important because no bill costing state funds would be debated on the Senate floor without first going to the Appropriations Committee, where the 1975 substitution bill had “coincidentally” been killed.
We learned about the Simmons letter and scrambled to put together a response. I immediately asked for a fiscal note from the Governor’s Budget Office, and, working under tremendous pressure, the budget office produced a report showing no fiscal impact. In fact, the budget office produced figures showing not only that the state wouldn’t need an additional inspector, but that the state was already doing twice as many inspections as the law called for.
Shortly after we received the budget office report, the Senate Health Committee report on HB 1087 was read in the Senate. I called an aide over and directed him to hand Brown the budget office report showing the bill had no fiscal impact.
Just then, Strickland went to the microphone and read Simmons’ letter. Sen. President Fred Anderson, R-Loveland, was about to send the measure to appropriations, when Brown rushed to microphone to read the budget office report.
HB 1087 was saved.
The rest was anti-climactic, although we didn’t know it at the time. The Medical Association, which had earlier passed a resolution against the bill, had their lobbyists join in the fray on the side of their manufacturing friends. A number of amendments were offered by the manufacturer-medical group and were defeated. Democrats were solidly united behind the bill. On final vote April 6, only McCormick voted against the measure.
Getting a bill like this through the Senate was very unusual. Credit had to go to pharmacy lobbyist Fred Sievers, Myrle Myers and to the many pharmacists who called their senators to indicate support for the measure.
Brown deserved a special accolade. He spent time learning about the subject, his pruning of the House version was sound, and he had great credibility with his fellow senators. It made a difference.
Last, but not least, we had to thank the people who organized the noon anti-ERA meeting on Monday, March 29, 1976, in Colorado Springs.
Jerry Kopel served 22 years in the Colorado House.