Drug Company Stands To Benefit From Legislation

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A drug company stands to financially benefit from proposed state legislation that could invalidate a class-action invasion-of-privacy lawsuit against it.

The bill, introduced by state Sen. Ron Calderon, D-Montebello, passed the Senate on Thursday. It allows pharmacies to partner with drug companies to send out letters reminding patients to refill their prescriptions.

Adheris, the company that sponsored the legislation, had a suit filed against it in 2004 for sending out personalized letters on behalf of pharmacies and pharmaceutical companies.

"When people go to the pharmacy, they assume their information will only be used to refill their prescriptions," said Jeffrey Krinsk, the San Diego-based lawyer who is suing Adheris. "Instead, it was sold for use to pharmaceutical companies."

Adheris used to send letters to California patients until 2004, when the lawsuit and legislative changes prompted the company to stop.

According to Rocky Rushing, Calderon’s chief of staff, the bill, S.B. 1096, would "invalidate" the lawsuit against Adheris. Krinsk said if the bill is signed into law, he would have difficulty winning the suit.

Adheris CEO Daniel Rubin denies, however, that the bill would affect the suit.

"S.B. 1096 has no impact on the lawsuit filed by Mr. Krinsk. We strongly believe that the lawsuit has no merit," Rubin wrote in an e-mail.

The intention of Calderon’s bill, according to Rushing, is to get patients to follow their prescriptions.

"California is behind most other states in terms of patients taking the drugs they are prescribed," Rushing said. "That means huge health-care costs when those patients suffer more serious health problems."

But privacy advocates contend that the bill opens the door to pharmaceutical companies to promote their products in the guise of a reminder letter, and for pharmacies to make a profit by selling private information about their customers’ prescriptions.

"The drug companies want a way to promote brand allegiance in consumers and boost sales," said Jerry Flanagan of the Consumer Watchdog group. "That is their only interest in this legislation."

Rubin rejects the idea that Adheris is advertising drug products.

"These letters are not trying to promote or sell a new product to a patient. They are only encouraging a patient to adhere to a course of therapy that has already been prescribed by the patient’s physician," Rubin wrote.

The new law would restrict Adheris from advertising any products that were not prescribed to the patient.

A copy of a sample patient letter was filed by Adheris in the lawsuit:

"We want to let you know your prescription to Plavix is about to run out. Talk to your doctor about renewing your Plavix prescription. If your doctor wants you to keep taking Plavix, you’ll need to get a new prescription now."

Adheris operates in every state except California, Rubin wrote.

Krinsk originally filed suit against the company in Massachusetts, where it is based.

Adheris then went by the name Elensys. Krinsk said the change was because Elensys had a lousy public image.

"There was some public backlash about invasion of privacy," Krinsk said, "so they just made the switch."

A Washington Post article from 2000 detailed public outrage in the D.C. area over the letters, which led to pharmacy chains CVS and Giant cutting ties with Adheris and publicly apologizing.

Rubin, however, denies that the name change had anything to do with bad publicity, saying instead that the company "changed names from Elensys to Adheris in early 2000 as part of a corporate branding strategy."

The bill passed on Thursday with 21 votes, the minimum it needed to move on to the Assembly. The bill was voted down last week, after falling short by four votes.

"The drug industry was lobbying very heavily," said Flanagan, who attended hearings for the bill in Sacramento. "They were short votes… it took a lot of political muscle to get it through."

In 2007, Calderon received more than $15,000 in contributions from pharmaceutical companies and retail pharmacies, records show.

Two of his contributors, Rite-Aid and the National Association of Chain Drug Stores, are supporters of the bill.

The version that was passed was amended from the previous version to include an "opt-out" provision which forces pharmacies to pass out a form allowing customers to decline to receive mailings.

The bill also requires that pharmacies disclose on the mailings whether they received compensation for passing along the information.

Medical groups are split on the bill: The California Medical Association opposed it, and several doctors testified that the letters could lead to patients getting bad medical advice.

"Essentially, this bill allows pharmaceutical marketing entities to practice medicine through the mail, outside of any physician/patient interaction," wrote the California Medical Association in a letter opposing the bill.

However, several groups, including the Mental Health Association in California, say it could help patients be compliant with their prescriptions.

"Compliance with taking medication is a big problem in mental health," said Rusty Selix, the head of the Mental Health Association in California.

Supporters point to a 2007 study that suggests that that forgetting to refill prescriptions costs Americans about $100 billion annually, including roughly $47 billion for drug-related hospitalizations.

The group that did the study was largely composed of organizations that supported the California bill, including the National Association of Chain Drug Stores.

Consumer Watchdog
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