JOHN YANG: The drug companies named in the lawsuit have strongly denied any wrongdoing
and have pledged to vigorously defend themselves in court.
Chip Davis is the chief executive officer of the trade group that represents the makers
of generic prescription drugs, the Association for Accessible Medicines.
Mr. Davis, thanks so much for joining us.
CHIP DAVIS, CEO, Association for Accessible Medicines: Thanks for the opportunities to
be here.
JOHN YANG: You heard what the attorney general said, largest corporate cartel in history,
overt, brazen collusion.
What's your response?
CHIP DAVIS: Yes.
Again, well, thank you for having me.
My initial response to what General Tong said is that facts are important here.
Conjecture isn't.
Speculation isn't.
Trying a case in the court of public opinion that should be tried in the courts is not
the way to ensure that patients have access to safe, affordable, and effective medicine.
You even referenced in your introduction with the general that nine out of every 10 prescriptions
in the United States are now generic.
We just released on behalf of our members a report that says that 90 percent of all
prescription drugs are available for only 22 percent of total cost to the health care
prescription drug dollar.
That's an amazing value proposition that you can't see anywhere else in health care.
So to suggest that an entire industry is engaged in some sort of corporate criminal cartel
is not just a disservice to the industry.
It's a disservice to the patients who rely on the industry.
JOHN YANG: But he also pointed out that some of the data that the industry has pointed
out showing the decrease in generic drug prices...
CHIP DAVIS: Sure.
Yes, we put that out.
JOHN YANG: ... that there was a spike.
There was a spike from 2012 to 2014, which is the period they're talking about that this
activity took place.
CHIP DAVIS: Well, in your interview, what I saw, it was very hard to tell if General
Tong was talking about present day or a time period that you just referenced, which the
2011-to-'14 time frame.
Full candor, that preceded my time at the association.
When I came, it was Generic Pharmaceutical Association.
We're now AAM.
But here's what I will tell you.
The reference and the example he uses, because it's the drug he's on, doxycycline, he talks
about a price increase back in that time frame that had a significant percentage price increase.
Now, remember, percentage price increases off of a low cost look different than a small
percentage over a high-priced biologic drug.
But do you know what the cost of doxycycline is today?
Fourteen dollars for a 30-day supply.
He conveniently and the other attorney generals conveniently leave out the fact that there
have been 37 straight months of generic price deflation in this industry, in part because
of the evolution and the consolidation of health care buyers.
This industry is actually facing real sustainability challenges.
They aren't focused on colluding with each other.
They're trying to figure out a way that they can sustain their business operations, so
that patients can continue to benefit from the drugs that they provide.
JOHN YANG: What about getting back to some of the specifics of what Mr. Tong had to say?
He said he has -- that they were able to subpoena in their investigation text messages, in which
discussions about price increases and the response by a particular manufacturer, and
then the response by the other manufacturers that we will go along, we will play nice?
They talk about accepting their fair share, rather than competing.
CHIP DAVIS: Well, I can't comment on any of the specifics of the investigation.
AAM is not a party to it.
What I will stipulate too is that these are serious allegations.
And if there is any evidence of anti-competitive behavior by a small subset of the industry,
then that will ultimately be borne out and those individuals and the companies they work
for will be held to account.
But he talked about -- roughly about 100 drugs, if my memory serves me correctly.
On any given day, there are over 2,000 generics on the marketplace.
So that's -- that's 5 percent of the total number of generics on the marketplace today,
and a smaller percentage of the total of 10,000 generics that have been approved by the Food
and Drug Administration over the years.
So, this effort in the public domain to cast an entire industry, where -- and I have heard
him say that people wake up every day, go to their place of business and commit crimes
-- I think that's actually, with respect to the general, an irresponsible statement.
The members that I know and the people that work there get up every day with one mission
in mind.
They want to make sure that they can go and produce safe, high-quality, effective medicines
at a price that patients can afford.
There's no way you're 90 percent of scripts and 22 percent of total costs unless that
is your mission, pure and simple.
JOHN YANG: Chip Davis, CEO of the Association for Accessible Medicines, thank you very much.
CHIP DAVIS: Thank you for your time.