Bitter pill slipped into the prescription price gouging bill

State senators gutted a drug price gouging bill last week in a gift to Big Pharma, advocates for the bill say.

The bill would create a Prescription Drug Affordability Board to set limits on drugs with prices deemed unreasonable.

Last week on the Senate floor, Sen. Paul Utke, R-Park Rapids, got the bill amended to exclude from the board’s review all rare disease treatments, and drugs that have been on the market for less than seven years. His amendment narrowly passed, 34-33. The House version is expected to hit the floor this week.

“It’s a poison pill; it guts the entire bill by excluding nearly all high-cost drugs from being reviewed,” said Kenza Hadj-Moussa, spokesperson for progressive political group TakeAction Minnesota. 

Under the 1983 Orphan Drug Act, the FDA encourages pharmaceutical companies to research and develop drugs to treat rare diseases — dubbed orphan drugs — with seven years of market exclusivity. That prevents competition and drives up the cost of the drugs.

Pharmaceutical companies get public funding to develop rare disease drugs: Research is funded through FDA grants and the federal government waives millions of dollars in licensing fees, provides tax credits for clinical trial costs, and gives seven years of protection from market competition. That’s why pharmaceutical companies have been pushing to exclude orphan drugs from the bill, she said. 

“Orphan drugs are the most profitable for the industry,” Hadj-Moussa said. 

Senate Republicans said the bill wouldn’t cut drug costs, but would reduce access to drugs, raise costs and limit development of new drugs. They didn’t have the votes to kill the bill, but Utke said his amendment exempting orphan drugs would ensure no delays in making the drugs.

Hadj-Moussa said the amendment’s other key provision is problematic too: excluding drugs that have been on the market less than seven years also helps the drug companies because they obtain multiple designations for the same drug, staggered a few years apart, excluding competition and driving up prices. She said most new drugs on the market are orphan drugs because that’s where the money is.

“It’s a racket,” Hadj-Moussa said. “No other country in the world allows Big Pharma to rig the system like this.”

Sen. Matt Klein, DFL-Mendota Heights, who is a doctor, spoke against the Utke amendment.

“This is an example of the type of truthspeak that comes out of the pharmaceutical industry: The exact opposite is the case for rare diseases,” he said.

Sen. Zach Duckworth, R-Lakeville, said price caps would increase costs and decrease options. 

Big Pharma finds DFL allies

Sen. John Hoffman, DFL-Champlin, was the only Democrat to vote for the amendment. He didn’t respond to a request for comment.

Despite its wide-ranging ramifications, drug price caps have gotten little attention in a jam-packed legislative session in which Democrats are rushing to use their newfound power to pass a slew of long-sought legislation. Meanwhile, Big Pharma has launched a pricey campaign against the drug board bill, targeting lawmakers in competitive districts with billboards and advertisements portraying the bill as a gift to insurance companies and middlemen. 

Aside from Hoffman, the amendment has key Democratic backers, including lobbyist Sarah Erickson of United Strategies — a DFL consulting firm which helped Gov. Tim Walz’s re-election campaign and whose founder is now the governor’s deputy chief of staff. The firm is lobbying for BIO, a trade organization that represents biotechnology companies.  

One of the pharmaceutical groups that lobbied for the amendment, Alexion, makes one of the most expensive drugs in the world — it costs $500,000 per year — to treat rare blood and kidney diseases.

Minnesota newspapers have featured letters to the editor written by cystic fibrosis patients, for which the only treatment, Vertex, is one of the most profitable drugs in the world.

A letter to the Duluth News Tribune was written by John “Cz” Czwartacki, who was named by Politico as the highest-paid West Wing staffer in the Trump White House in 2019. He has multiple sclerosis.

After working in various Capitol Hill government and lobbying jobs, Czwartacki started a patient advocacy group called Survivors for Solutions to promote development of new drugs. He wrote in the News Tribune that the Minnesota board would be “a group of bureaucrats playing god and determining if saving a life with a breakthrough treatment is affordable” and called it “a tool for big insurance companies to avoid paying for patient needs.” 

Big Pharma often funds patient groups to influence the debate, Hadj-Moussa said.

“When they lobby against these bills in D.C., they don’t send people in slick suits, they send very sick patients to go say ‘Don’t do this bill, you’re going to take away my innovation, you’re going to take away my hope,’” she said.

Klein said opponents of the bill have it exactly wrong.

“If any population of patients is more vulnerable to an overpriced, gouged-priced drug, it is people with rare diseases who really have very limited options where they can receive their medications,” Klein said on the Senate floor last week. 

But Klein’s peers weren’t persuaded. 

Six states — Colorado, Maine, Maryland, New Hampshire, Ohio and Oregon — have passed similar bills creating drug boards, and other states are considering doing so, according to the National Conference of State Legislatures.