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Editorial: Just Wondering, Where Does All the Money Go?

Where do all the "fees and fines" go that are levied against firms by the FDA, EPA, DOJ, and other agencies? It has been reported that a significant portion of the FDA's budget is not provided by Congress allocations but comes from PDUFA fees and possibly other sources.

PDUFA: A summary shows PDUFA fees of $597,648 of a $2,793.812 budget in 2009 has grown to $1,523,376 of a budget of $4,031,658 in 2011. PDUFA fees levied on a company are $1,178,000 per drug application with clinical data and $589,000 with no clinical data.

Fines: As just a sampling of income from fines, in recent years, the following actions have occurred. Pfizer paid $1.3 billion in criminal fines for "misbranding" drugs; the total package was $2.3 billion after adding the DOJ fees and costs. Fines for promoting off-label use of drugs include $2.3 billion from Pfizer, $1.4 billion from Lilly, $875 million from TAP, $704 million from Serono, $520 million from AstraZeneca, $435 million from Schering-Plough, $430 million from Pfizer (Neurontin), $425 million from Cephalon, $422.5 million from Novartis, and $266 million from AstraZeneca. KV Pharmaceutical paid a $1 million fine and $900,000 in forfeit for distributing oversized morphine sulfate tablets.

Food User Fees: The FDA is looking to make up the shortfall resulting from the mandate to improve U.S. food safety across the board with fees. Neither the Legislative Branch nor the Executive Branch has given FDA the money for the new food safety programs; so, the companies may be required to pay. The FDA has said it hoped to recoup about $25 million from such fees. The fees are almost certain to create costs to the industry that will be passed on to the consumer

Questions:

• Where does all the money go?
• Is Congress aware of this additional "outside" income and is it considered in the budgeting process?
• Is the "fox guarding the henhouse" relationship going on here?
• Why is one "483" issued to U.S. companies every 50 minutes throughout the year but the vast majority of pharmaceutical companies in China have never been visited once? (It seems easier to do business in China!)

The bottom line is that the consumer pays, since any fee, fine, or whatever is simply passed on in the cost of the product being purchased. Since these fees and fines are in many cases arbitrary, it seems that this is a way to generate money for the government through the back door. The companies pay the government; the taxpayer and consumer pay the companies; and yes, in between somewhere are the exorbitant fees and practices paid to the third-party payors that have also positioned themselves at the feeding trough.

NICE-approved Drugs Banned by a Quarter of Health Authorities in the UK
Cutting-edge drugs have been blacklisted by a quarter of local health authorities, even though they have already been approved by the NHS funding watchdog. Physicians are being told not to prescribe the drugs to help make budget savings. At least 14 drugs have been put on "black" or "double-red" lists by primary care trusts, despite the fact that a NICE approval should mean GPs are free to prescribe them to appropriate patients.
http://www.telegraph.co.uk/health/healthnews/8910912/Nice-approved-drugs-banned-by-quarter-of-health-authorities.html

$400 Million May be Paid by Ranbaxy to Settle FDA Issues
Ranbaxy Laboratories Ltd. may have to pay a penalty of up to $400 million to settle issues with the FDA, which could allow the Indian drug maker to launch its generic version of cholesterol-lowering drug Lipitor in the U.S.

Ranbaxy is likely to make the drug at its manufacturing facility in New Jersey. Ranbaxy is a unit of Japan's Daiichi Sankyo Co. and is seeking to launch a generic version of Pfizer Inc.'s top-selling Lipitor. However, quality-control and data reporting issues at Ranbaxy have delayed approval from the FDA.
http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201111242223dowjonesdjonline000524&title=ranbaxy-may-pay-400-million-to-settle-fda-issuesallowing-company-to-sell-cholesterol-drug-report

Merck to Pay $950 Million to Settle Vioxx Investigation
The U.S. DOJ announced that drug maker Merck will pay $950 million to resolve investigations into its marketing of the painkiller Vioxx. The agency said Merck will pay $321.6 million in criminal fines and $628.4 million as a civil settlement agreement. Part of the deal is that they will plead guilty to a misdemeanor charge that it marketed Vioxx as a treatment for rheumatoid arthritis before getting FDA approval.
http://www.google.com/hostednews/ap/article/ALeqM5glYtsgviwjvmZOUjDfvfUJNpSFpA?docId=524d948a27384190a4ed6ad2d0fc19f7

UK Lawmakers to Probe Medicine Shortages
Members of Parliament will investigate a continuing shortage of some essential medicines in Britain, following complaints by pharmacists that vital supplies are being lost to exports. Lloydspharmacy, a unit of Germany's Celesio, said earlier this month that a survey of 396 of its pharmacists around Britain found 80 percent were unable to dispense certain items because of shortages. Lloydspharmacy also stated that lower prices relative to other European countries have fueled exports from the country, leaving many pharmacies scrabbling for supplies. http://www.reuters.com/article/2011/11/21/us-uk-shortages-idUSTRE7AK2JK20111121

Retail Medical Clinics Growing
A new study shows that Americans are increasingly turning to retail medical clinics in pharmacies, grocery stores, and other shopping outlets to treat the flu, ear infections, bronchitis, and other ailments. Use of clinics is growing particularly among young, healthy, and higher-income patients who live close to the facilities. During 2007 to 2009, the rate at which patients visited retail clinics on a monthly basis rose nearly 10-fold—from 0.3 visits per 1,000 people to 2.7 visits per 1,000. http://latimesblogs.latimes.com/money_co/2011/11/more-people-using-retail-medical-clinics.html

Lipitor May Gain New Life for Pfizer
Pfizer appears to be moving into the retail market place. In an effort to retain sales of Lipitor, Pfizer is planning to sell the drug at generic prices directly to patients. If successful, the risky move could change the pharmaceutical distribution system in the U.S.
http://online.wsj.com/article/SB10001424052970203710704577052350701638614.html

Ireland Faces $26 Billion Export Headache as Drugs are Lost
Five of the world's top-selling twelve drug products are produced in Ireland. Their sales will fall 52 percent to $13 billion by 2013 from $27 billion in 2010 as their patents expire. As they come off patent, it is immediately reflected in export figures. Ireland is the largest net exporter of finished pharmaceutical and medical products and organic chemicals in the world. Eight of the 10 biggest drug companies in the world have Irish facilities.
http://www.bloomberg.com/news/2011-11-22/ireland-faces-26-billion-export-headache-as-drugs-stop-working.html

Texting Disallowed for Ordering Medications According to Joint Commission
The Joint Commission has decided that its accredited hospitals and other healthcare settings may not accept as legitimate original orders any directions that physicians or licensed independent practitioners "text" to facilities' personnel.
http://www.jointcommission.org/standards_information/jcfaqdetails.aspx?StandardsFAQChapterId=79&StandardsFAQId=401

Viagra Makers Jailed in China's 'Whac-a-Mole' War on Fakes
China jailed eight fake drug makers and raided more than 1,400 drug dens this month as the government stepped up its fight to control an estimated $3 billion of fake drugs in the world's fastest-growing pharmaceuticals market.

China criminalized the manufacture of counterfeit medicines this year and raised maximum penalties to the death sentence to try to contain illegal production in a market that researcher IMS Health estimates will swell 17 percent to $48 billion in the next year. Online sales and a growing health-conscious middle class, coupled with the government's desire to consolidate the industry, is creating "the perfect storm" of fake drugs as some smaller producers turn to unlicensed copies to stay in business. It's like a game of Whac-a-Mole—you knock one problem down and bam, another one pops up!

China's tougher regulations reflect the dangers of fake medicines compared with other counterfeit issues in the country. "Copying software, T-shirts, or DVDs is an intellectual property issue but it is something entirely different when vulnerable people get sick or die because of counterfeit/fake medicines."
http://www.bloomberg.com/news/2011-11-17/sex-pill-makers-jailed-as-china-plays-whac-a-mole-with-fake-producers.html

Tauzin's $11.6 Million Made Him Highest-Paid Health-Law Lobbyist
Billy Tauzin, former congressman and CEO of the Pharmaceutical Research and Manufacturers of America (PHARMA), was paid $11.6 million in 2010, the year he brokered a deal with President Barack Obama that helped pass the healthcare overhaul.

Tax records show that after the law was signed, Tauzin left his job as head of PHARMA as the highest-paid lobbyist among groups most involved in the overhaul debate. Karen Ignagni, leader of the insurer lobby, was paid $1.5 million in 2010 while Tom Donahue at the Chamber of Commerce made $4.8 million.

The disclosure of Tauzin's salary, reported in IRS filings, is renewing questions about the revolving door between government and industry. It feeds the public perception that members are doing big industry's bidding so they can cash out. Some have said that being a member of Congress is just a way-station on the way to a highly paid lobbying job.
http://www.bloomberg.com/news/2011-11-29/tauzin-s-11-6-million-made-him-highest-paid-health-law-lobbyist.html

�that switching your Christmas decorations to LED lights will save a lot of money in operating and replacement costs over the next several years?

Christmas Needs
As the year draws to a close and the Christmas season is upon us, please remember that there are those that need your financial help and support, including the organizations in your area that serve as a means of support.

For those that remember the Burma Shave signs along the roadways back in the 50s and 60s, we will include one per issue for a while. This was a great marketing program!

Don't lose your head,
To gain a minute,
You need your head,
Your brains are in it.

--Burma Shave

Oakdell Pharmacy - Initial Accreditation: Jeff Carson RPh, Chief of Staff, San Antonio, TX; Sterile and Nonsterile compounding

All Care Pharmacy - Initial Accreditation: Indu Joshi, PhD, Director of Compounding Services, Allen Park, MI; Nonsterile Compounding

Tristate Pharmacy - Reaccreditation: Joshua Benton, PharmD, Weirton, WV; Sterile and Nonsterile Compounding

Compared to 100 PCAB accredited pharmacies this time last year, there are now 134 PCAB accredited pharmacies.