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http://www.ocregister.com/ocregister/homepage/abox/article_860358.php

BY : Hanh Quach

It started in 1999 with a field trip: Seniors with osteoporosis, high blood pressure and other ailments boarded a bus in Biddeford, Maine, at dawn -- picking up others waiting at rest stops along Interstate 95 on the way north to the border town of Calais. There, a doctor with both American and Canadian licenses wrote prescriptions for the two dozen seniors who made the six-hour trek. Then the seniors crossed the St. Croix River into St. Stephen, New Brunswick, Canada, where they filled the prescriptions for a fraction of what they would have paid in the United States. The organizer was John Marvin, a retired union activist who was using his expertise to dramatize the high cost of prescription drugs. Marvin's bus trips set in motion a fight that would spread across the country as citizen activists rebelled against rapidly rising drug prices and fought for a reprieve for seniors like 78-year-old Fern Pirkle of Corona del Mar. Prescription drugs eat up 17 percent of Pirkle's monthly income, she said. That's if her doctor is able to slip her some samples of Actonel for her osteoporosis. "He saves me $80 a month right there. But that's iffy," Pirkle said. She scrimps on pain medication to save more money. It's these kinds of dilemmas that have bred resentment among citizens. "Money is no object with (drug companies) because that's how they make their mega-billions," Pirkle said. "We're the only western country in the world that has the system we do." There's a reason for that, industry officials say: research and innovation. The kind of discount programs citizens are demanding amount to price controls that would cut into the money that drug companies need to maintain research. "Yeah, we do end up paying a higher price for innovation and discovery. But as a cancer survivor, I am grateful," said Billy Tauzin, executive director of Pharmaceutical Research and Manufacturers of America, the trade organization for more than 100 drug companies. "We can't (control prices) because we're jealous of a European country's drug costs." The trade organization lost the battle in Maine, but it would soon became efficient at eliminating threats before they could do any harm. learning experience Bus trips to Canada soon became bus trips to the Maine Capitol in Augusta, where activists lobbied for a discount program with teeth. Drug companies would be asked to provide discounts. If the state decided the discounts weren't good enough, it could sue those companies for profiteering. If the law passed, it would set a precedent for other states to follow. The industry fought hard, but a cavalry of pharmaceutical lobbyists, jetting in on private planes, was no match for the armada of seniors who would arrive for hearings early, take up all the seats and crowd out drug lobbyists, advocates said. The Legislature passed the bill in 2000, and the governor signed it. Drug companies spent the next five years fighting the law, all the way to the Supreme Court, only to lose in the end. Maine's concession was to drop the provision allowing suits for profiteering. Instead, it changed the law to use the state's Medicaid program as leverage, potentially making it harder for Medicaid patients to buy drugs from companies that didn't offer sufficient discounts. In the meantime, the push for discounts was spreading to other states. And this time, drug companies were geared up to fight it. Strong measures A coalition led by union leaders in Ohio wanted to put a discount program like Maine's on the ballot in 2003, so they started gathering signatures from 100 Ohioans seeking permission to circulate petitions more broadly. Drug companies struck quickly, challenging the validity of the signatures, calling eachperson who signed the petition into court. "Then we knew what we were in for," said Cathy Levine, executive director of Universal Health Care Action Network, Ohio. Advocates rescinded their petition and resubmitted 100 signatures, this time from lawyers, judges and other people they believed the drug industry would not challenge. It worked. But not for long. As a coalition of nonprofit organizations began collecting thousands of signatures statewide to put the measure on the ballot, the pharmaceutical industry responded by challenging signatures in separate legal actions in41 of the state's 88 counties. Legal expenses mounted as the industry subpoenaed volunteers and the paid signature gatherers. The trade group challenged signatures that weren't dated, weren't written entirely in cursive (as Ohio law requires) or looked similar to signatures above them, said Don McTigue, lawyer for the coalition of consumer groups. For drug companies, it was a fight for their livelihood. "If people want to turn us into a European price-control structure, we're going to battle them," Tauzin said. By the end, although the group of nonprofits had enough signatures, they wound up at the bargaining table with drug companies. What they ultimately got was a drug-discount plan proposed by the industry, with discounts that would be offered voluntarily. The pharmaceutical trade organization spent more than $15 million in that fight. But Ohio wasn't the only battleground -- the efforts were spreading to other states. The activism spreads As a contingent of drug-company lawyers fought Ohio's ballot initiative, more had to be dispatched to capitols in West Virginia, Oregon, and Washington to cool discount drug proposals. The companies hired lobbyists, sent their own, and countered with smaller-scale plans. They succeeded. "When you're playing at the Legislature, you're playing in their court," said Lauren Moughon, AARP's lobbyist in Washington state. That's what the industry tried to do here in California. In January, drug companies teamed up with Gov. Arnold Schwarzenegger to propose CalRx, a similar plan to what was implemented in Ohio when the activists relented. Much was at risk for drug companies in California, where 10 percent of the nation lives. Mandatory Maine-style discounts here could drive discounts even deeper elsewhere, dragging down the federal government's prices with it and affecting the industry's bottom line. But the industry's proposal stalled in the Legislature. In response to the drug company's alliance with Schwarzenegger, though, a coalition of consumer groups and union organizers put together what would become Proposition 79, a drug discount plan much like Maine's, which would use the power of Medicaid -- called Medi-Cal here -- to force the industry's hand. The pharmaceutical industry group sued to keep Proposition 79 off the ballot. That didn't work. So the drug companies did on the ballot what they had done successfully in other state legislatures: proposed a smaller-scale competing plan -- Proposition 78 -- essentially, the Ohio program. The industry raised $80 million in eight months -- the most ever for any state initiative in the nation -- and began launching television ads that told potential voters the union-supported initiative would limit their access to prescription drugs. Proponents of Proposition 79 were never able to match the pharmaceutical industry's advertising budget. From the start, public opinion polls indicated voters were confused about which initiative was sponsored by whom. Come Election Day, both measures failed. "Now, we're back to where we wanted to be a year ago," the drug company's Tauzin said. The future Tauzin and industry observers agree that the pharmaceutical industry needs to mend its reputation. "Frankly, drugs and the pharmaceutical industry are a dirty word for consumers," said Zach Wagner, pharmaceuticals analyst for investment firm Edward Jones. "I think it's a freight train that's moving rapidly and they're not going to be able to stop it." Affordability is a key issue, and the industry is taking some steps to address it. This year, the drug trade group set up an organization to help the poor and uninsured find the right free and discount drug program for them, supplementing the $4 billion a year in free medications the companies give to doctors. But image is important as well, observers say. "Clearly, research is the primary purpose or goal of these organizations. The pendulum has probably swung too far toward marketing. Now it's swinging back to research," Wagner said. Tauzin said the industry is addressing that too. This month, drug company executives discussed new industry codes of conduct for television advertising that would be more "informational" and "balanced" rather than strictly promotional. But more fights in legislatures and at the ballot box are looming. In California, Tauzin's trade organization plans to pick up with CalRx again next year. And activists in Oregon, having lost in their legislature, are now aiming for a ballot initiative in 2006. "We'll go in and fight it as well," Tauzin said. "We're not going to give up in this country," Tauzin said. "It's the last best chance for cures and remedies for disease, (and) if the people want to turn us into a European price-control structure, we're going to battle them."