What It Really Takes to Change Washington

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Larry Downing / Reuters

When I started working in the U.S. Senate in the mid-1990s, my then-boss Senator Jeff Bingaman handed me, like he did to every incoming member of his staff, a copy of Eric Redman's book, The Dance of Legislation: An Insider's Account of the Workings of the United States Senate.

The book tells Redman's own story of then working on Senator Warren Magnuson's team and getting to know through error and success the machinery of the Senate legislative process.

Redman learns that gravitational forces work differently for a Senator and his or her staff than they do for others in the administration, or the courts, or in the lobbying and advocacy arena.

Senators, if they desire to, don't have to be spineless and passive -- but can make their own weather. They can write and pass laws - though successful legislating can be an excruciatingly frustrating, irrational process. In the end, Redman plays a tipping point role in getting a National Health Service bill passed.

One can overdo typologies and models in trying to describe social phenomena -- but sometimes they work. When I was absorbing what I could about how the mechanics of politics and policymaking worked, I was influenced by the writing of Ripley and Franklin, who wrote Congress, the Bureaucracy and Public Policy. They suggest that there are many factors -- among them "time", the nature and number of policy actors in a decision, and the regularity or irregularity of the policy under consideration -- that effect legislative and political outcomes.

bill.jpgIn other words, Ripley and Franklin argued that structure and the context in which policy is debated and formed matters -- and Eric Redman shows that empowered political actors who understand the tools
and mechanisms of politics and legislative process can have significant impact.

This is a round about way of saying that I am intrigued by stories of those who try to pass or change legislation. No matter whether the impulse for change is outside the system -- like HIV/AIDS activists were during the Reagan administration battling for attention and resources -- or inside, like Senator Warren Magnusson's legislative assistant -- it's nearly always a byzantine process that changes the roster of winners and losers. It's how American style democracy works, and I find it fascinating.

In part because of America's and the world's growing dependence on China's production muscle, I have been interested in what the U.S. needs to do to prevent its standards from being undermined by lesser standards, poor regulation, illiterate workers, and corruption abroad. What are the legal and regulatory adjustments that need to be made to shore up American standards -- rather than have them slip to levels seen elsewhere around the world?

g242332_u94601_FDR_fireside_chat_March_1933.jpgThe U.S. Federal Food, Drug, and Cosmetic Act, passed in 1938, and only modified in minor ways since was originally introduced because more than 100 patients died because of a highly toxic hospital-administered drug. Today, there are scores of stories emerging around the world in which counterfeit drugs are proliferating in a lightly, often corruptly, regulated global drug industry. The media in China, India, countries in Africa and Southeast Asia often run stories about deaths and illness stemming from drugs being taken that are unsafe.

In the past, when the American drug and pharmaceuticals industry was mostly based inside the borders of the country, the regulatory and inspection scheme provide by the 1938 Food and Drug Act was adequate. But those days are gone. 

Today, roughly 80 percent of the active ingredients for drugs sold inside the United States are manufactured abroad -- often in lightly regulated environments, or ones where corruption
undermines what is often just a façade of regulation.

The 1938 Federal Food, Drug, and Cosmetic Act is anachronistic in the sense that the law doesn't give the Food and Drug Administration (FDA) the resources or authority to adequately regulate and inspect incoming drug and pharmaceuticals stock from international sources. The vulnerability of U.S. citizens to dangerous drug materials has been increasing -- but virtually nothing (until recently) has been done to wave red flags that U.S.-focused food and drug regulators are no longer really inspecting what U.S. consumers, popping pills made in Xian, China and elsewhere.

Writing about some new possible deals that might fix this regulatory blind spot and major health risk to Americans, the New York Times' Gardiner Harris writes:

Although branded drugs usually have more secure supply chains than those of generics, major pharmaceutical companies have moved aggressively into China in recent years and often rely on rarely inspected suppliers.

Federal officials for years have expressed concerns about the nation's growing reliance on sometimes mysterious foreign drug suppliers, but they had largely despaired of fixing the
problem. Congress had never given the FDA the money it needed to inspect these plants, and for nearly two decades the generic industry to pay inspection fees.

The industry changed its stance for several reasons. First, the heparin scandal scared everyone. The fake ingredient was good enough to pass a sophisticated test, so the conspirators probably knew that deaths would result, reflecting a callous level of
greed. And the Chinese government refused to allow the FDA to investigate, suggesting that the perpetrators were not only smart but politically well connected.

heather bresch.jpgIn his interesting Times piece, Gardiner outlines other reasons why the U.S. drug industry and American regulators may be ready to strike a new deal overhauling the out-of-date law. 

A key reason he highlights is the policy agitating of an individual, Heather Bresch, the recently appointed 42-year old CEO of Mylan Inc., a Pittsburgh-based generic
drug firm ranked No. 396 on the Fortune 500.

If Eric Redman was updating his fascinating book, written originally in the 1970s, he might focus on what an outsider like Bresch with insider DNA (her dad is Senator Joe Manchin III of West Virginia) was doing to change a major regulatory framework and shake up the drug industry and those who regulate it.

Bresch has been with Mylan for about 20 years -- working up the ladder from a job she got typing drug labels at what was then Mylan's sole drug plant in Morgantown, West Virginia. She knows the drug industry line by line and term by term, all the pharma-speak slang and acronyms. She told me that for decades, the FDA has kept two inspectors on site at the Morgantown facility, which is huge. But through globalization and mergers with other firms, Mylan has operations all over the world today -- but there is no consistent inspection regime overseeing these other facilities.

In late 2011, Bresch was made CEO of Mylan. If her dad were not a U.S. senator, it would really be a perfect Horatio Alger, from mail room to the top, story -- but spending time with her, it becomes immediately clear that her intellectual dexterity with the details of running a global pharmaceuticals business has nothing to do with family connections. Her father is not my favorite senator -- having missed a key vote on Don't Ask, Don't Tell and as governor of West Virginia suing to block federal regulatory frameworks that would prioritize the health and safety of miners and protect the environment. Senator Manchin, most likely because of how he reads his state's political currents, is often a regulation foe rather than advocate.

That is what makes his daughter's behavior since becoming Mylan's CEO so interesting. Heather Bresch is leaning into and wants more regulation for her own industry.  

When Bresch ascended to her recent perch, she surprised many by not just leaving things as they were when it came to the comfortable, long standing, structured relationship between FDA inspectors and U.S. producers.

Bresch told me she commissioned some work last year that showed that she and the U.S. pharmaceuticals industry writ large were facing enormous liabilities if drugs that they manufactured abroad and sold into the U.S. proved to be fraudulent or 'bad'. She knew after two decades of interaction with FDA regulators at the Morgantown production facility that Mylan's sites outside the U.S. had virtually no regulatory oversight. And this was true for every other major U.S. pharmaceuticals producer.

imgname--china_starts_drug_recall_system---50226711--pills.jpgShe also sensed that the unlevel regulatory playing field, added to other cost factors such as skimpy environmental standards and low wage rates abroad, was going to economically gut punch U.S. producers in the long run. Like so much of the rest of American industry that had off-shored to China, India, Malaysia, Thailand, the Philippines, and more -- the pharmaceutical producers were going to face cost decisions on regulation that could undermine not only the job base of the U.S. but also the physical health of citizens.

So in a move that not many business CEOs typically make (and in my book very consistent with The Atlantic's criteria for "Brave Thinkers"), Heather Bresch began a full board campaign demanding more regulation from the government that would deal with the industry in a global rather than national framework. She strong-armed other of her leading pharmaceuticals industry competitors to join her in proposing a new tax on their industry, called generic drug user fees, of $300 million annually to fund an expansion of FDA regulators.

Her talking points include nods on shoring up American competitiveness against low-regulation, often corrupt competitors abroad and enhancing drug safety for consumers. But these problems have been facing the industry for some time. 

On one level, Bresch's survey of liabilities facing Mylan is sensible and rational -- but the fact that she immediately tried to push both FDA regulators to expand their scope and encourage an industry to invite more inspection seems staggeringly different than the passivity of others staring at the same environment. For this, Bresch deserves recognition.

The 1938 law, as of this moment, still stands -- but Bresch has unified the American industry in pushing for an overhaul, and while some bureaucrats deep in the FDA would like to see things remain as they were, FDA Commissioner Margaret Hamburg has endorsed the user fee proposal from the industry and applauded Bresch for her advocacy of broadened regulatory capacity for what is now a global generic drug industry.

The House of Representatives and Senate are now considering legislation that would achieve what Bresch has put into motion -- and many policy watchers in this arena handicap the chances of these user fees and expanded FDA authority becoming law as very likely.

It's rare to see the significance of a single person move regulation in Washington, but from my vantage point, what Bresch seems to be achieving is akin to what Eric Redman pulled off in his work on the inside as a staffer for Senator Magnuson.

There are more acts left before the 1938 Food and Drug Act is really overhauled and we'll report back as things develop. 

When I asked what other big tasks Bresch was taking on, just to get a sense of whether her work on shaking up both regulators and her industry was just a fluke, she said that her other two major goals were first to blast apart the legal environment and attack the lack of awareness and education that kept a 7-year old child suffering from anaphylactic shock at school from being given an EpiPen, leading to his death. She wants much broader, public availability of EpiPens -- just like heart defibrillators -- with public education and legal waivers given to those who try to help people in need.

Her other bucket of work is working to further expand affordability and access to HIV/AIDS drugs and treatment in the developing world. While she lauds what George W. Bush did in expanding resources for HIV/AIDs in Africa, she said much more needs to be done. She said that on the positive side when the program started there were 4000 people being treated in Africa, and that has risen to 4 million. The problem, Bresch says, is that there are 10 million people who should be treated and aren't. She says that to stem the tide of AIDS in Africa, people need treatment the moment they are diagnosed; treatment can reduce further transmission rates by 98 percent. But she says that "Democrats are not touching this because it's seen as a Republican initiative."

She outlined quickly for me steps she thought were key -- making this work more of a private initiative than one just run by the government, perhaps renaming the initiative, doing more with less, and getting a sustainable diagnosis and treatment model in place rather than the boom and bust model of HIV/AIDS work done in Africa today.

I do know that the structure of the policy making environment matters -- that think tanks are home for governments in exile, that money creatively (and legally) deployed can make a Senator smile, that the mutual back-scratching culture of Washington can seem corrupt, that politicians always feel the tug to run against the realities of power here. But what interests me about this place is that occasionally an Eric Redman wins, a Jacob Hacker (who pushed and lost on the health care public option) can kick a debate out of its grooves, and that a Heather Bresch, regardless of a powerful dad who is not a profile in courage, can set out to overhaul a 74-year old law and probably win.

I think that qualifies as a Brave Thinker (but I'm not the decider) -- but at minimum, as a brave doer.