INSIDE THE CAPITOL

Friday, May 13, 2005

JEFF MAPES

The Oregonian

SALEM -- In 2001, then-Gov. John Kitzhaber battled platoons of pharmaceutical lobbyists to pass a bill giving the state more power to push for lower drug prices.

Four years later, Kitzhaber's drug program has been quietly neutered, with one audit showing it cost the state nearly $12 million in lost savings on drug costs over one recent 15-month period. Gov. Ted Kulongoski's attempt to get the program back on track was summarily shelved recently by the Democratic and Republican budget chiefs in the Legislature.

"It's ironic that legislators who espouse a devotion to markets and to competition . . . don't want it to work for taxpayers in their own area of responsibility," said John Santa, a doctor who headed the Office of Oregon Health Policy and Research under Kitzhaber.

The tale of Kitzhaber's battle with the drug industry is like a dispatch from the front of an epic war that shows no sign of abating.

For the most part, the industry has been able in Oregon to fend off attackers ranging from the AARP to the Oregon AFL-CIO. But spending on prescription drugs -- which quadrupled between 1990 and 2004 -- continues to be a big target for those trying to control health care spending.

Now the drug companies are trying to stop Senate Bill 329, which would allow private employers to join with the state government to bargain for bigger discounts on drug prices.

The industry was once a bit player in Salem. The Pharmaceutical Research and Manufacturers of America didn't even have a lobbyist based here until Jim Gardner took the job in the early 1980s. Gardner and at least 40 other lobbyists now represent the drug industry in Salem.

"There are people I didn't even think of as drug lobbyists who are registered with them," marveled Sen. Bill Morrisette, D-Springfield, the bill's sponsor.

The industry reported spending nearly $642,000 last year on lobbying here, and drug makers also gave about $250,000 to legislative races, mostly to Republicans.

Kitzhaber's 2001 bill called for the creation of a list of preferred drugs that physicians would be encouraged to use when treating patients in the Oregon Health Plan. In many cases, doctors would have to get special authorization to depart from the list.

A former emergency room doctor, Kitzhaber said the state could figure out what drugs are the most effective, encourage their use and then bargain for bigger discounts.

The drug companies spend heavily marketing to doctors and patients "and they really don't want to have this other objective kind of information going to them," he said.

With Kitzhaber out of office in 2003, the industry persuaded the Legislature to prohibit prior authorization. Wanda Moebius, a spokeswoman for the pharmaceutical association, said the industry believes it infringes on the doctor-patient relationship and is especially burdensome on the poor.

The industry did agree to a 2003 law creating a drug purchasing pool open to lower-income Oregonians aged 54 and older as well as state and local governments. Once again, the idea was to give purchasers more leverage to bargain for lower prices.

Morrisette said Gardner, the drug lobbyist, agreed to support the purchasing pool in part to head off the threat of an initiative from the Oregon AFL-CIO. Gardner declined comment.

This time around, the unions and the AARP want to expand the purchasing pool, most notably by allowing private employers to join. The industry says the state could end up forcing companies to accept the equivalent of price controls.

Rep. Mitch Greenlick, D-Portland, a former research director at Kaiser Permanente who also is sponsoring the bill, disputed that. But he said he's ready to accept a much smaller expansion of the drug purchasing pool.

"You're not going to pass something in a Republican-controlled House that (the industry) opposes, period," he said. And so the drug wars continue.

Jeff Mapes: 503-221-8209; [email protected]




INSIDE THE CAPITOL Friday, May 13, 2005 JEFF MAPES The Oregonian SALEM -- In 2001, then-Gov. John Kitzhaber battled platoons of pharmaceutical lobbyists to pass a bill giving the state more power to push for lower drug prices. Four years later, Kitzhaber's drug program has been quietly neutered, with one audit showing it cost the state nearly $12 million in lost savings on drug costs over one recent 15-month period. Gov. Ted Kulongoski's attempt to get the program back on track was summarily shelved recently by the Democratic and Republican budget chiefs in the Legislature. "It's ironic that legislators who espouse a devotion to markets and to competition . . . don't want it to work for taxpayers in their own area of responsibility," said John Santa, a doctor who headed the Office of Oregon Health Policy and Research under Kitzhaber. The tale of Kitzhaber's battle with the drug industry is like a dispatch from the front of an epic war that shows no sign of abating. For the most part, the industry has been able in Oregon to fend off attackers ranging from the AARP to the Oregon AFL-CIO. But spending on prescription drugs -- which quadrupled between 1990 and 2004 -- continues to be a big target for those trying to control health care spending. Now the drug companies are trying to stop Senate Bill 329, which would allow private employers to join with the state government to bargain for bigger discounts on drug prices. The industry was once a bit player in Salem. The Pharmaceutical Research and Manufacturers of America didn't even have a lobbyist based here until Jim Gardner took the job in the early 1980s. Gardner and at least 40 other lobbyists now represent the drug industry in Salem. "There are people I didn't even think of as drug lobbyists who are registered with them," marveled Sen. Bill Morrisette, D-Springfield, the bill's sponsor. The industry reported spending nearly $642,000 last year on lobbying here, and drug makers also gave about $250,000 to legislative races, mostly to Republicans. Kitzhaber's 2001 bill called for the creation of a list of preferred drugs that physicians would be encouraged to use when treating patients in the Oregon Health Plan. In many cases, doctors would have to get special authorization to depart from the list. A former emergency room doctor, Kitzhaber said the state could figure out what drugs are the most effective, encourage their use and then bargain for bigger discounts. The drug companies spend heavily marketing to doctors and patients "and they really don't want to have this other objective kind of information going to them," he said. With Kitzhaber out of office in 2003, the industry persuaded the Legislature to prohibit prior authorization. Wanda Moebius, a spokeswoman for the pharmaceutical association, said the industry believes it infringes on the doctor-patient relationship and is especially burdensome on the poor. The industry did agree to a 2003 law creating a drug purchasing pool open to lower-income Oregonians aged 54 and older as well as state and local governments. Once again, the idea was to give purchasers more leverage to bargain for lower prices. Morrisette said Gardner, the drug lobbyist, agreed to support the purchasing pool in part to head off the threat of an initiative from the Oregon AFL-CIO. Gardner declined comment. This time around, the unions and the AARP want to expand the purchasing pool, most notably by allowing private employers to join. The industry says the state could end up forcing companies to accept the equivalent of price controls. Rep. Mitch Greenlick, D-Portland, a former research director at Kaiser Permanente who also is sponsoring the bill, disputed that. But he said he's ready to accept a much smaller expansion of the drug purchasing pool. "You're not going to pass something in a Republican-controlled House that (the industry) opposes, period," he said. And so the drug wars continue. Jeff Mapes: 503-221-8209; [email protected] ©2005 The Oregonian © 2005 OregonLive.com All Rights Reserved.