340B & Pharmaceutical Profiteers: Connecticut Attorney General William Tong on Going After Illegal Price Gouging By Big Pharma

Dr. William Tong

Female : Welcome to Conversations on Health Care with Mark Masselli and
Margaret Flinter, a show where we speak to the top thought leaders
in health innovation, health policy, care delivery, and the great minds
who are shaping the hea lth care of the future.

This week Mark and Margaret speak with Connecticut Attorney
General William Tong leading a group of attorneys general from 51
states and territories in a large antitrust suit against multiple
pharmaceutical entities accused of colluding in a generic drug price -
gouging scheme, probably the worst drug cabal in history. He's also
taking on pharmaceutical companies intimidating safety net providers
protected by 340 B drug pricing allowing them to offer low cost drug s
to their vulnerable patients.

Lori Robertson also checks in, the Managing Editor of F act C heck.org
looks at misstatements spoken about health policy in the public
domain, separating the fake from the facts . We end with a bright idea
that's improving health and well - being in everyday lives. If you hav e
comments, please e - mail us at [email protected] or find us on
Facebook , Twitter , or wherever you listen to podcast. You can also
hear us by asking Alexa to play the program . Now stay tuned for our
interview with Connecticut Attorney General William Tong here on
Conversations on Health Care.

[ Music ]

Mark Masselli: We are speaking today with Connecticu t Attorney General William
Tong, the first Asian - Pacific American a ttorney g eneral elected
statewide in Connecticut' s history. Prior to becoming AG, he served
for 12 years in the Conne cticut House of Representatives.

Margaret Flinter: From 2015 to 2019 , Tong served as House C hairman of the Judiciary
Committee where he was responsible for all of Connecticut's legal
syste m matters. Following the Sandy Hook School shooting, he was
instrumental in passing a number of new gun laws. Now he leads a
national coalition of attorneys general in a large antitrust suit against
multiple generic drug manufac turers for alleged price fix ing. Attorney
General To ng , we welcome you to Conversations on Health Care .

Dr. William Tong: Th ank you both. Glad to join you.

Mark Masselli: Well, Attorney General Tong, I think you know that community health
centers provide quality affordable health car e to 30 million of the
nation's vulnerable populations , and critical to that mission is securing
afford able life savings drugs for low income patients. In 1992,
Congress passed the 340 B Drug Pricing P rogram . Now that may not be
a program that rolls off the tongue of many Americans but it makes
life saving drugs affordable to millions of them. Recently , some major
drug manufacturers have issued some very restrictive protocols that

Dr. William Tong

will undermine the integrity of that program and potentially put many
lives at risk. Really , on the heels of those actions you sent request to a
number of these drug makers demanding they abandon these
unlawful actions threatening access to affordable prescriptions. I
wonder if you could tell ou r listeners more about that.

Dr. Willi am Tong: Yeah, well first of all, thank you both for having me and thank you for
the work that you and community health centers do across
Connecticut and across the country. Really just providing health care
and services to people in your communities and a lso particularly to
vulnerable populations and people who really need your help. That's
what the 34 0B D rug P ricing P rogram is about. When Congress can get
together on important legislation as it did in 1992 and as it did on the
Affordable Care Act, it can really make a huge difference in the lives of
people and their access to health care. Not just life saving but life
enabling drugs, right, the drugs and medicines and pharmaceut icals
that we rely on every day. I hope we get a chance to talk about
generic d rugs in a minute because , again, it's not just drugs for major
heart conditions or cancer . I t's the antibiotics that we take every day.
It's the drugs that people need to have a good and strong quality of
life and health for themselves and their families.

Congress made a determination now almost 30 years ago, that it was
going to help community health centers , safety net hospitals, various
other types of clinics that help targeted populations, pay for and
afford these drugs that every year get ever more exp ensive. For
reasons that I cannot discern , major drug companies including
AstraZeneca and others, Eli Lilly and Sanofi, have decide d to cut us out
of that program, cut community health centers out of that program
unilaterally . There is very little explanat ion given as to why they've
done that.

The re also it appears , and I say it appears because it's not clear what's
going on here . I t appears that they're adding new conditions to the
program. W ere they to resume providing drugs at a discounted price
under 34 0 B ? T hey require extensive new information from
community health centers about you and your business model and
also your patience, which to me, by the way, I do a lot Connecticut is a
leader in data privacy and cyber security th at also gives me great
conce rn. At the urging of you and your colleagues and many other
health care providers that need this l ifeline 340B, I sent a letter to a
numbe r of manufacturers, asking them what's going on here? Why --
and that was to , Eli Lilly, AstraZeneca, Merck, Sanofi an d Novartis so
far, why have you cut communities, not just community health
centers but communities out of the 340B P rogram? You appear to be
breaking the law. It is contrary to the 340 B law passed by Congress, I
want an explanation . T hat’s usually how this starts.

Dr. William Tong

An attorney general , my job is to protect consumers and to protect
the people in my state and exercising that authority. This often begins
with a letter , an inquiry that says, look you're doing something that I
think is unlawful, I want you to exp lain it to me before I take further
action. If I don't get a satisfactory response, that's when I look at all
the range of actions and options that are at my disposal as attorney
general and I can take the next step. Sometimes that includes further
investi gation , could include a lawsuit , could include -- and this is
where you really AGs in action, linking arms with other AGs as we did
in Big Tobacco as we're doing in my generic drug price fixing case and
taking action as a multi state and coordinated coalit ion.

Margaret Flinter: Well, Attorney General Tong, you clearly really understand and get
the impact of the 340 B P rogram on people's lives. Thank you for the
recognition of the work t hat community health centers do, not just
here in Connecticut, but all ac ross the country. For our listeners,
federally qualified health centers are already pretty heavily
scrutinized and monitored by HRSA , the Health Resources and
Services Administration at HHS, which also oversees the 340 B Drug
Pricing Program . It’s pretty we ll documented by research that FQHCs
are a model of cost effective and high quality care, particularly
primary care and particularly for people who are at high risk because
of social determinants of health and other issues. The only system in
the country o rganized around meeting the needs of the uninsured
and low - income people.

Just for our listeners I want to make it clear how critical thi s issue is.
Take diabetes, health centers take care of 2.7 million diabetics and
the first drugs they went after were t he insulins. What ’s motivation
from the industry and also from the White House that issue d that
executive order at this point?

Dr. William Tong: Money. I don't mean to be facetious about that. It's hard to discern
any rational policy motive . Frankly , it's hard to discern a rational
policy motive for attacking the Affordable Care Act or attacking access
to reproductive health care . Particularly in the middle of a global
pande mic and public health emergency, the likes of which I have
never experienced in my l ife time, and most people today have not ,
why an attack from the federal government on health care ? I cannot
tell you. I can tell you that based on my experience, confronting taking
on the big pharmaceutical companies, not just in this space in terms
of 340 B, but in the generic drug price fixing case , in my work on
opioids . I'm on the National Executive Committee of attorneys
general, fighting the opioid crisis. We unfortunately see a
preponderance , a significant number of major companies,
pharmaceutical com panies across the country across the globe, who
in these respects are bad actors and have broken the law. From what I
can tell it's motivated by their bottom line and desire to maximize

Dr. William Tong

their profits. I have no other explanation. I hope they can give me on e
but I'm not terribly hopeful.

Mark Masselli: Attorney General Tong, o bviously, these actions the drug
manufacturers taking or impacting patients, Margaret talked about
those facing dealing with chronic and complex diseases like diabetes
and hypertension. Patients are impacted, health centers are
impacted , safety net providers , and as you ’ve s aid communities in all
50 states and the territor ies. You also, and I just want to pick up on
the thread talking about your role as an attorney general is protecting
the people in your state.

I'm just wondering, for our health centers or patients across the
country, how might they approach their own attorney general's office
in terms of communicating their concern? What type of information
do you look at when someone b rings it? I also want you to just pick up
on the thread, you're on the executive director of the AG a ssociation,
but you've led and participated in many state c oalitions of a ttorney
g enerals in bipartisan actions . Maybe walk us through how one should
appro ach their attorney general's office, and then talk a little bit
about the coalition that might be built on a potential action here.

Dr. William Tong: Let me just say, first of all, that health care is extraordinarily
complicated . I don't live and breathe i t like you do and the people in
your health centers do. I can't profess to be an expert in all of the
various levers in the health care industry . It is confounding, I'm sure
even to you , right, and dizzying the number of different levers and
inputs and out puts and factors. But for me it's pretty simple , okay,
and so I guess I'm just a country lawyer from Connecticut, right, and
it's pretty basic . I get a phone call from a community health center
and t hey say, we’re under attack by some of the biggest
pharma ceutical companies o n Earth. We need you to help us , right?
My response is, how can I help ?

That plays out over and over again, with our constituents who call and
say for example, I went down to buy hand sanitizer at my local
convenien ce store and I think they're gouging us in the middle of the
pandemic . They’re charging us 30 bucks for a bottle of hand sanitizer.
I say, how can I help, right? I sent an investigator down to check it out.
I send a letter to the big pharmaceutical companies to check it out.
T hat's how it started with General Blumenthal more than 20 years
ago, when people in Connecticut said you really ought to help us stop
this epidemic of youth smoking and the targeting of young people , i t
is more than 20 years ago . Because I was targeted , I was a generation
of kids that were targeted by appealing advertising. Joe Camel was
the character that came on cigarettes used to target young people to
get us to smoke . General Blumenthal joined with 45 other attorneys
general across the country and broug ht the biggest multi state

Dr. William Tong

consumer protection action in history, which resulted in the biggest
multibillion dollar settlement in history. We've since cut smoking by
half in this country. People generally regard the Big Tobacco case as
the b ig b ang in a tto rney g eneral multi state coordination .

The generic drug price fixing case that actually started , that was also
pretty simple. A couple of lawyers in our office read an article in New
York Times about a heart drug Digoxin , in the New York Times and
how it h ad shot up 500% over a couple of years. They took the article
upstairs to my predecessor George Jepsen. They said, George, this is
weird , can we look at this? George said, go ahead , let’s do it. That
started now 49 state coalition taking on what I have cal led the largest
corporate cartel in American history, the generic drug industry, which
I have very strong evidence is engaged in a widespread conspiracy to
fix prices and divide market share in violation of our state and federal
antitrust laws. Then the fi nal thing I say is, of course, opioids. I don’t
have to tel l you where that comes from , t hat comes from the
tremendous pain and suffering and death and destruction that we see
in our communities across Connecticut.

We lose 1000 people a year and growing. W e lose more than $10
billion in terms of economic damage to our state from the opioid and
addiction crisis. I hear all the time from families , from survivors , from
victim s about how they were targeted by opioid manufacturers,
distributors, retailers, healt h care providers . I am ashamed to say that
one of the prime bad actors in the opioid industry is a Connecticut
based company in my home city of Sta mford, Purdue Pharma. That
means to me that I have a special responsibility and obligation to be
aggressive. Joined with almost every other state we're taking on the
addiction industry , and that comes from people that we're fighting for
who are suffering every day in our state. The answer to your question
is, it happens any number of ways , but it usually happens by
somebody picking up the phone or sending us an e - mail and saying
we got a problem.

Margaret Flinter: Well, Attorney General Tong, it strikes me that health care is one of
those areas that people often don't really understand these issues
until they are personally affected by it. If you have great health
insurance, low copays, not that many plans like that around anymore,
low deductible s . I f you're very healthy, you might be spared first hand
knowledge of how bad the issue of pricing is in the industry. I
remember a couple years ago the congressional hearings, when the
cost of an Epi pen, something not optional for a family that has a child
with serious allergies to have one at home, one at school , shot up to I
think $400 or more and some action was taken. But w e seem to be
unique in America in this particular problem. Prescription medicines
are not something people take casually , right? They take it because
their provider said they really needed it to treat a condition or

Dr. William Tong

prevent worsening of a condition. O ther countries seem to have a
handle on this. I wonder if you have any thoughts about what other
countries do to not have this issue of making drugs unaffordable to
people who absolutely need them . I f you looked at other models
around the world or other fi rst world countries.

Dr. William Tong: Yeah, it's really hard to extrapolate one answer , right , there are
o bviously, countries like Canada a n d the United Kingdom that have a
much more nationalized and government sponsored or government
run or government en couraged health care system. W e've all engaged
in these policy debates on what's better, what are the pluses and
minuses, right. T he argument that people in our country wouldn't
want the type of health care that's provided in those countries or
wouldn't st and for the waiting, or the lack of comprehensive care.
Frankly, it's hard for any of us to know, because you read about it, but
we don't live in those countries, we don't experience it.

H ealth care, for example, and other places particularly in Asia can b e a
matter of cash, right , cash and carries. I f you've got money, you can
get health care , if you don't have money, good luck. T hat's certainly
not a system , I think , that anybody believes that we should have in
this country, and would be very destructive. I think the overall , the
real challenge is that there isn't enough accountability in our
healthcare system a nd people are unchecked and untethered. L et me
just say that in the generic drug industry, generic drugs account for
90% of our nation's prescripti ons , 90% o kay. W hen you say maybe
some of us can get away without feeling the effects of this. I doubt
there are that many people that haven't taken a generic drug at some
point or another in the past six months or a year. I do. I have R osacea,
which I sha re with the nation on 60 minutes. I t requires a basic
antibiotic called D oxycycline, which was developed before I was born.

Margaret Flinter: Exactly .

Dr. William Tong: T he time period for recouping the cost of developing that drug have
lost , it’s past, ok ay, and t hat drug decade ago was like, 40 bucks , 20
bucks, right? It's shot up 8 000%. There's no reason for that. Why is
Digoxin 8000% more expensive than it was a decade ago ? Another
drug I hope I pronounce it correctly , M etronidazole is a topical , again,
skin ointment that use for inflammation, I also have that it's made by
a gene ric drug manufacturer named Taro which I have sued. T hat drug
has shot up a considerable amount over the past few years. I have e -
mails, phone records, text messages that demonst rate widespread
collusion by the generic drug manufacturers to artificially fixed prices
and to raise them. That's illegal. Everybody knows that.

And I have e - mails, text messages, testimony, diaries, phone records
that show that generic drug manufacturers are talking amongst
themselves and colluding to divide marke t share . H ey you can sell to

Dr. William Tong

C V S, I'll sell the Walgreens, let's not compete with each other, and
everybody wins. That's also highly illegal. You don't have to go to law
school to know that . M ajo r companies cannot collude on price , a nd
they can't collude on market share to prejudice consumers, but they
do a nd they get away with it. P eople ask me, this is shocking. Mr .
Tong how can they get away with it? T he answer is because if banks
were too big to fail, these companies have gotten too big to care. I
think it's just become a routine part of making money in this business.

T here isn't enough accountability , meaning there ar en't enough of us
to say you just can't do that . W hat shocks me is how brazen t his is,
right? Not circumstantial evidence. It's not saying that I pieced
together and you can infer that this is happening. I have the goods ,
a nd they still tell me , n ot true. We're not doing it. You're under
indic tment by the Justice Department you've entered into a
settlement with the Justice Department admitting this wrongdoing.
Yeah General Tong is wrong.

Mark Masselli: We're speaking today with Connecticut Attorney General William
Tong . H e recently sent a notice to pharmaceutical companies warning
t hat they were crossing a dangerous line . G eneral Tong the pandemic
is still going on , a nd unfortunately, probably no end in sight in terms
of waiting for a vaccine and then trying to figure out its efficacy. But
there are millions of newly uninsured Americ ans who've lost their jobs
and lost their health insurance and w ith the Affordable Care Act really
hanging in the balance in the courts right now , a nd no viable
alternative insight. Why are actions like yours and those of your
fellow attorney generals so i mportant in protecting the rights of the
American h ealth consumer?

Dr. William Tong: Every action that we're taking, and we're just -- we're talking about
the tip of the iceberg . T here are so many other regulatory rulemaking
actions in front of the various federal agencies that touch in the
health care system that we ’ re engaged in. There's so much going on ,
and ev ery piece of it is important and every bit helps . T he Affordable
Care Act litigation , t hat's us. My colleague unfortunately in Texas and
a coaliti on of 18 attorneys general have sued as proxies for the
President to repeal the Affordable Care Act, and they're not successful
yet. But that cases in the Supreme Court and I'm joined with a
coalition of attorneys general defending it.

Frankly, God bless i f they're successful, because there isn't a good
answer about what replaces it. G od bless him their success with 340B,
frankly, because there isn't a good answer about what community
health centers are going to do if we don't have access to 340B . All of
th ese are profound risks to the health care system, and to families
and individuals in our communities. L et me just say one more thing.
This is a health care talk and not a policy or politics talk. But number

Dr. William Tong

one, I think most of us understand how important this election is , s o
you got to vote. Get out there and vote. It matters to the health care
system. You want to talk about what you can do ? V ote, okay, to drive
down the cost of health care, that's number one.

But number two is, even if we although -- the election goes off
without a hitch, and f rom my perspective, we have a change in
leadership. That doesn't mean everything goes back to being great
tomorrow , o kay . T remendous damage has been done to the health
care system . That Affordable Care Act case will continue , right, w e'll
still have all of these issues, the opioid crisis doesn't just go away. All
of these initiatives are not only important, but they're ongoing and
they will be ongoing for some time. That's why we just have to hunker
down and fight the se fights.

Margaret Flinter: We've been speaking today with Connecticut Attorney General
William Tong, you can learn more about his important work by going
to portal.ct.gov/AG , or follow him on twitter @AGW illiam T ong . We
want to thank you so much for your dedication to advocating for the
American h ealth consumer, for the most vulnerable among us for
speaking truth to power a nd for your obvious understanding that
healthcare can't be separated from policy and politics when we care
about making sure that every one has the care they need. Thank you
so much for joining us on Conversations on Health Care today.

Dr. William Tong: Thank you both.

[Music]

Mark Masselli: At Conversations on Health Care we want our audience to be truly in
the know when it comes to the f acts about health care reform and
policy. Lori Robertson is an award winning journalist and Managing
Editor of FactCheck.org, a nonpartisan, nonprofit consumer advocate
for voters that aim to reduce the level of deception in US politics. Lori,
what have yo u got for us this week?

Lori Robertson: President Donald Trump has touted an 85% decline in the nation's
COVID - 19 case fatality rate since April, and has attributed the drop to
improvements in treatment. But better treatment is only part of the
story. Expe rts say part if not most of the decline can be explained by
expanded testing and a shift toward younger people rather than
higher risk older folks catching the c oronavirus. Since the end of July,
Trump has included the impressive sounding statistic in pres s
briefings and rallies. In a July 27 briefing in North Carolina , Trump
said , “ D ue to the medical advances we've already achieved and our
increased knowledge in how to treat the virus. The mortality rate for
patients over the age of 18 is 85% lower than it was in April. ” The case
fatality rate is the percentage of deaths from the coronavirus among
the confirmed cases.

Dr. William Tong

The President is correct that the case fatality rate has fallen
substantially since April. We calculated a crude case fatality rate of
7.7% f or all ages for April. That dropped 8 3% to 1.3% in the month of
July, and further dropped to 0.9% for the month of August for a total
decline of 88% since April. But Trump is wrong to attribute the steep
decline only to treatment improvements when other fa ctors are also
at play. In the beginning of the pandemic when testing was still
extremely limited US was not capturing many of the lists of your
COVID - 19 cases, which led to an artificially high case fatality rate.
During the month of April, only about 5.3 million test were
performed. But in July and August 23 million tests were performed in
each month according to t he COVID tracking project. It also matters
who is getting sick, and that has also changed over time.

One expert told us that early on many outb reaks occurred in nursing
homes where COVID - 19 mortality is very high. But now more younger
people are becoming infected and they are at lower risk of death. The
Centers for Disease Control and Prevention said people ages 20 to 29
accounted for more than 2 0% of coronavirus cases from June to
August. T hat's my fat check for this week. I'm Lori Robertson,
managing editor of factcheck.org.

Margaret Flinter: FactCheck .org is committed to factual accuracy from the country’s
major political players and is a proje ct of the Annenberg Public Policy
Center at the University of Pennsylvania. If you have a fact that you’ d
like check, e - mail us at chcradio.com, w e’ll have FactCheck .org’s Lori
Robertson check it out for you here on Conversations on Health Care.

[Music]

Ma rgaret Flinter: Each week Conversation highlights a bright idea about how to make
wellness a part of our communities and everyday lives. People living
in Sub - Saharan Africa have tougher odds of overcoming diseases. T he
problem is not just the lack of acces s to health care providers. But
once someone is diagnosed with an illness, access to vital life saving
medicine is out of reach for many who are sick simply because they
can't afford them.

Gregory Rockson: Africa has some of the highest drug prices in the world, simply
because it's a free pricing market. Y ou can take a single medicine and
two pharmacies next to each other will sell that same drug at wildly
different prices.

Margaret Flinter: Gregory Ro ckson is the founder of mP harma, a nonprofit organizatio n
that seeking to address inequities in drug prices in Africa and the
supply chain that often puts these life saving drugs out of reach of the
people who need them. mP harma operates in four African countries,
it decided to tackle the problem by redirecting the supply chain that
forces small independent pharmacies and clinics to source their own

Dr. William Tong

drugs , and help offers these entities the chance to outsource their
procurement for pharmaceuticals .

Gregory Rockson: W e realized that if we could begin to bring tog ether all these
independent pharmacies and remove the pressure that they have to
face in sourcing their own drugs, we can begin to address the issue of
medicine availability and affordability.

Margaret Flinter: Rockson says they help improve the drug procu rement supply chain
by collecting data on actual drug sales, which allows health care
entities to avoid over or under stocking, and it reduces their
vulnerability to fraud and corruption, which sadly is rampant in d rug
supply chains in parts of the world.

Gregory Rockson: The beautiful thing about the service that we offer them is that not
only are we taking ownership of the supply chain, we ar e also
providing the financing to purchase the inventory. We offer them a
simple value proposition , pay only when y ou dispense the drug to the
patient. Beyond having the parts available, we actively help them
manage their inventory.

Margaret Flinter: Rockson says another important benefit more affordable drug
supplies help clinicians better manage patient outcomes. mP h arma
was a 2019 recipient of the S chool Foundation's Entrepreneurship
Award .

Gregory Rockson: W ith ou r focus on bringing down the cost of drugs that there wi ll be a
systemic change that even other actors will be forced to reduce their
prices .

Margaret Flin ter: mP harma , a nonprofit entity that utilizes reliable data on drug usage ,
eliminates fraud and waste in the drug supply chains , makes life
saving medications more readily available to some of the world's most
vulnerable people, improves outcomes and save s money. Now that's
a bright idea.

[ Music ]

Mark Masselli: You've been listening to Conversations on Health Care. I'm Mark
Masselli.

Margaret Flinter: And I'm Margaret Flinter.

Mark Masselli: Peace and h ealth.

Female : Conversations on Health Care is recorde d at WESU at Wesleyan
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