Ch-ch-changes for generics trade

Apr 13, 2023

With Megan R. Wilson and Alice Miranda Ollstein

Driving the day

This photo shows tablets of ibuprofen in New York.

A leading trade organization for generic drugmakers is facing internal tensions, several people told POLITICO. | Patrick Sison/AP Photo

AAM AT A CROSSROADS — Simmering tensions inside one of the nation’s leading trade organizations for generic drugmakers could threaten its lobbying clout at a crucial time for the industry, Megan reports.

The Association for Accessible Medicines has lost some members or reduced dues to keep others, contributing to the need for more than $4 million in budget cuts that culminated in layoffs of top public affairs, trade policy and advocacy executives, as previously reported by POLITICO, and its smallest overall revenue in seven years. It comes as the organization attempts to raise its profile with the public and policymakers — including pushing for expanded access to generics and biosimilars — and it searches for a permanent CEO.

Ten people with knowledge of AAM's inner workings said the turmoil imperils the industry’s position in Washington. The people — including former employees, people who’ve worked in association management and lobbyists who’ve represented generic drugmakers — were granted anonymity to discuss the sensitive topic.

“In baseball, there's something called the Golden Sombrero — it's when a guy strikes out four times in a game. It's really embarrassing,” said an executive who has worked at several health care trade associations and was given anonymity to speak about the situation. “Their Golden Sombrero is a dysfunctional board, no money, no staff, no agenda. That's a pretty bad combination.”

While the people said AAM has a promising vision for elevating the generic and biosimilar industries, they worry the group may be too under-resourced to execute it. And a diminished trade group for the industry could have negative consequences for its members.

In an email to POLITICO, AAM broadly disputed the characterization, saying the organization is “right-sized” and its board is united in its defense of an industry critical to American medicine, accounting for 91 percent of drugs sold in the U.S., but 18 percent of spending on medicines. And the group is active on Capitol Hill: This week, interim CEO David Gaugh was part of a small, closed-door roundtable of experts advising the Senate HELP Committee as it works to draft drug pricing legislation covering generic drugs and pharmacy benefit managers.

But the group is down to only 19 people on staff, following a number of departures last year, the layoffs and the recent exit of Steve Selde, the former director of its Biosimilars Council, who went to the Centers for Medicare and Medicaid Services. There are two federal lobbyists in AAM’s government affairs shop and three lobbyists handling state issues. AAM said it wants to add a third lobbyist to its federal team and will be filling positions in other areas. However, its stable of lobbying, public relations, research, advertising and legal firms is likely to shrink, said five people familiar with the situation.

A diminished generic and biosimilars trade group could have negative consequences for its members: Only eight of its 23 member companies employ in-house lobbyists in Washington, outside firms or both. Three others disbanded their lobbying representation in recent years, disclosures show.

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Abortion

APPEALS COURT KEEPS MIFEPRISTONE ON THE MARKET BUT SHARPLY LIMITS ACCESS —A federal appeals court agreed late Wednesday to maintain the availability of an abortion pill but only under strict conditions that prohibit its use beyond seven weeks of pregnancy and bar its distribution by mail.

In a 42-page order, a three-judge panel of the 5th U.S. Circuit Court of Appeals agreed to temporarily block the central aspect of a Texas-based federal judge’s ruling that suspended the FDA’s 2000 approval of the drug, mifepristone. But by a 2-1 vote, the panel permitted other aspects of that ruling to take effect that would block a seven-year effort by the FDA to widen access to the drug.

The Justice Department on Wednesday had asked the 5th U.S. Circuit Court of Appeals to issue a stay by noon today.

Also on Wednesday, U.S. Attorney General Merrick Garland, during a meeting of the White House’s Interagency Task Force on Reproductive Healthcare Access, warned that upholding the ruling would invite challenges to other FDA-approved drugs and discourage pharmaceutical companies from developing and seeking approval for new treatments.

“This could impact any medication Americans rely on, no matter how essential it is and no matter how long ago it was approved,” he said.

CAN’T ALWAYS GET WHAT YOU WANT — Democrats on the House Energy and Commerce Committee want a hearing on the Texas court ruling that would suspend FDA approval of an abortion medication.

But they may not get it as quickly as they’d like in a Republican-controlled committee, POLITICO’s David Lim reports.

Every Democrat on the committee signed the letter to Chair Cathy McMorris Rodgers (R-Wash.) and Health Subcommittee Chair Brett Guthrie (R-Ky.). They argue the decision endangers access to abortion and the FDA’s drug approval regulatory authority.

“The District Court’s ruling in Alliance for Hippocratic Medicine could also have far-reaching effects beyond abortion access, by second-guessing the expertise of our public health agencies and creating uncertainty for Americans who rely on life-saving medications approved by FDA every day,” the Democrat lawmakers wrote in the letter.

But Republicans control the House and the committee schedule, meaning the request from Democrats may not be heeded.

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In Congress

DRUG PRICING POLICY DELAYS — The Senate HELP Committee is postponing a bipartisan hearing on a drug pricing bill to gather more information, Megan reports.

The panel, led by Sen. Bernie Sanders (I-Vt.), hoped to mark up the yet-to-be-seen legislation focused on pharmaceutical middlemen and generic drug policy on April 19, shortly after the spring recess.

But closed-door roundtables with experts and representatives from the pharmacy benefit manager and generics industries are prolonging the timeline, according to committee documents and a congressional aide familiar with the process.

The planned legislation’s details are still unclear, but some clues may be found in earlier bipartisan options, like some provisions from a 2019 offering introduced by former Sen. Lamar Alexander (R-Tenn.), who chaired the health panel at the time, and Sen. Patty Murray (D-Wash.).

IN THE STATES

JUUL SETTLES — E-cigarette maker Juul has reached a $462 million settlement with New York and several other states, POLITICO’s Beth Belton reports.

The company, one of the largest e-cigarette makers in the U.S., agreed to pay six states and the District of Columbia after it was sued for its allegedly “deceptive and misleading marketing.”

Seven AGs – California, Colorado, the District of Columbia, Illinois, Massachusetts, New Mexico and New York — claimed the company’s advertising practices led to a significant increase in underage vaping between 2014 and 2019.

The agreement includes language that says nothing in it may be “taken as or construed to be an admission or concession of any liability, wrongdoing or violation of any source of law, or of any other matter of fact or law.”

“With this settlement, we are nearing total resolution of the company’s historical legal challenges and securing certainty for our future,” Austin Finan, a Juul company spokesperson, said in a statement.

Names in the News

Parth Mehrotra, has been named Privia Health’s CEO. He was previously president and COO at the company.

What We're Reading

The Washington Post reports that the safety practices in China’s labs haven’t kept up with the billions of dollars put into their expansion.

STAT reports that Sanders plans to bring insulin executives to the Senate to testify.

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