AG Becerra, Assemb. Wood Announce Legislation to Outlaw Collusive Agreements Between Drug Companies
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AG Becerra, Assemb. Wood Announce Legislation to Outlaw Collusive Agreements Between Drug Companies


okay let’s go ahead and start thank you
for joining us this afternoon my name is Xavier Becerra Attorney General for the
state of California I am pleased to be joined by assembly member Jim wood the
representative for the second Assembly District here in California we’re gonna
talk about some important stuff today and I want to start off by reminding you
of August 10th the importance of August 10th if it doesn’t flash in your memory
as quickly as it should then let me remind you of what happened on August
the 10th at least would happen August the 10th of 1921 that’s the year and the
day that Franklin Delano Roosevelt not yet president but aged 39
experiences first symptoms of polio which today we don’t think too much
about because we have vaccines that make it possible for all of us to make sure
that our children don’t experience polio and the effects of polio we don’t think
about it a whole lot but but for medicine and some of those drugs that we
use life would be very different for a lot of us August 10th is also very
important for another reason on August 10th 2015 an individual by the name of
Martin shkreli acquired a company which owned a drug called daraprim it was a
drug that is used to treat malaria and parasites it’s a very important drug
because for many people it means the difference between life and death
before August 10th of 2015 the price of daraprim was $13.50 after mr. shkreli
had acquired daraprim the price rose to 750 dollars say five thousand four hundred
fifty-five percent increase over the price literally overnight for
life-saving medication that people need mr. shkreli took advantage of having
little competition in the pharmaceutical industry and he hiked up the price of
what is a life-saving drug mr. shrilly made the news much more common than what
mr. shkreli did are what we call pay for delay agreements they happen behind
closed doors and consumers pay for it but these secrets that are reached
behind closed doors through these agreements rarely make the news at least
not as quickly as they should in the end these agreements a company that makes a
name brand drug will enter a collusive agreement with a company that makes a
cheaper generic drug then the generic drug maker agrees to keep the
lower-priced version of the drug off the market for a certain period of time as a
result the price remains high take the case of cipro that’s a commonplace
antibiotic its manufacturer will recognize the name Bayer held a patent
on that drug that was set to expire in 2003 so what Bayer did was it reached a
deal with many of its rivals it paid them 400 million dollars to keep that
their generic drugs and that competition out of the market for an additional six
years during those years Bayer was able to raise the price of a
single pill of that antibiotic cipro to five dollars and 30 cents and in some
cases even more than that but by 2015 with no agreement in place to delay the
entrance of generic drugs the price of a pill like cipro was 17 cents
by 27 by 2015 there are drugs in your medicine cabinet today with similar
stories lipitor that’s a leading
cholesterol-lowering lowering drug when the drug went generic its price fell
from more than $5 a tablet to 31 cents a tablet the price essentially was sixteen
hundred percent higher than before its generic competition required there to be
a greater transparency on the price as anyone here who’s been to a pharmacy
lately can tell you the cost of prescription drugs is not going down
they’re going up and they are a major reason why the cost of health care
continues to go up according to the Centers for Medicare and Medicaid
Services the u.s. spent some 329 million I’m sorry 329 billion dollars on
prescription drugs in 2016 that’s six times more money than the entire federal
government in its budget spends for educating more than 50 million
schoolchildren in America our federal government also
projects that these costs for prescription drugs will continue to
increase spending for retail prescription drugs is expected to grow
faster than any other category of health care costs today standing with assembly
member Jim wood I’m very proud to say that we are working together to pass
legislation to put another tool in the Department of Justice’s toolbox to try
to keep the price of prescription drugs down Assemblymember woods legislation would
make it possible to try to keep Americans in the reach of purchasing the
drugs they need for their family and their children assembly member wood is
going to talk about a B 8:24 and the reasons for it as well but I simply want
to that I appreciate and I know the people
in my legal division appreciate the help that he is providing through this
legislation if it becomes law to make sure that we can go after those who are
trying to keep the prices of prescription drugs higher than they
should be and I believe all Californians will appreciate that as well
no pharmaceutical company should be able to game the system at the expense of
hard-working California families this legislation would help us crack down
further on these pay-for-delay agreements and while manufactures gives
you while pharmaceutical companies continue to believe that it’s okay for
them to split the profits of their collusion in these pay-to-play play to
delay agreements it’s unfair for hardworking California families to not
understand the game that’s at play Californians should not be asked to pay
higher monopolistic prices for their drugs they are robbed of the opportunity
to pay for and to acquire the types of medication they need at lower prices in
an open and competitive environment studies have shown that generic drugs
when they enter the market over time they end up reducing the cost of the
medication that Americans use by some seventy to ninety percent over what the
price of those brand-name drugs were these agreements that we call
pay-for-delay agreements cost consumers some three and a half billion dollars
each year in higher healthcare costs with today’s legislation we’re
announcing that it’s our expectation that the California Department of
Justice will be able to increase and expedite our legal challenges to these
types of agreements this legislation would make it clear that in certain
certain circumstances pay-for-delay agreements will become illegal from the
start it would also make clear that drug companies cannot simply withhold
evidence – what is behind these collusive
agreements I’m looking forward to helping assembly member would make the
case for this legislation before his colleagues we remain committed to do all
we can to try to protect the health of all of our people in California and
doing everything we can to keep the price of prescription medication
affordable for all with that let me now ask assembly member wood for his remarks first of all I want to say thank you to
the Attorney General for working with us on this very important topic I look
forward to this in the upcoming months and I look forward to his assistance as
I work with my colleagues to explain this challenge and do what we can to
help reduce drug prices for for Californians first of all good good
afternoon everyone I’ve been fighting against the high cost of prescription
drugs since being elected whether it’s creating transparency in price hikes
regulating the extremely profitable pharmacy benefit managers or prohibiting
the use of marketing coupons to keep patients on higher priced drugs for
longer when equally effective lower priced
generics are available I’ve been there not only to protect patients but for
those who feel the squeeze of ever-increasing health care costs it’s
unfortunate unfortunate that the egregious actions of some drug companies
taint the entire industry but when those actions continue to put profits over
patients we absolutely must act we’re here today to stop stuff to stop this
calculating pay for delay it’s a scheme it really is a scheme nothing quite tops
drug companies that pay manufacturers not to produce lower priced generics
after their patent patent runs out in this process generic companies make
money for doing nothing and what do patients get nothing but artificially
increased prices for drugs these pay for delayed agreements hurt consumers twice
once by delaying the introduction of an equivalent generic drug that’s almost
always cheaper than the brand name and twice by stifling additional
competition when we know that when multiple manufacturers of generic drugs
compete with one another prices can be up to 90 percent less less than what the
original drug costs generic drugs have saved us
the US healthcare system one point six seven trillion dollars from 2007 to 2016
an FTC study concluded that the contracts that we’re talking about these
pay-for-delay agreements have led to three and a half billion dollars in
additional cost to consumers every year this expense is passed on directly to
consumers to health plans the government and taxpayers affordability is a
critical issue in health care and this calculating practice makes it worse and
we need to stop it now thank you

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