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Defending Big Pharma

Greg Nash

For Lori Reilly, executive vice president for policy and research at the Pharmaceutical Research and Manufacturers of America (PhRMA), the constant struggle to find new cures and treatments hits close to home.

“Since I started at PhRMA, my mom was diagnosed with ALS, or Lou Gehrig’s disease, a terminal illness for which there is no cure and only one medicine on the market,” Reilly said in a recent interview with The Hill.

“Unless we have a policy environment that rewards innovation in this country, patients like my mom may never have an effective treatment for their disease. … I am driven by patients — like my mom.”

Reilly’s job is to develop federal legislative, regulatory and political strategies. She not only fights criticism of the pharmaceutical industry on multiple fronts, but also promotes healthcare reforms that reflect the industry’s interests.

One current fight involves Gilead’s $1,000-a-pill Hepatitis C drug Sovaldi, which lawmakers, insurance companies and pharmacy benefit management companies say could bankrupt families and the healthcare system.

Even though Gilead isn’t a PhRMA client, the lobby group has come to its defense, saying Sovaldi might sound pricey but in the long run it actually saves money.

While Sovaldi may cost $84,000 or more for an individual patient’s 12-week treatment, Reilly argues it will save money by decreasing the need for liver transplants for patients whose organs fail.

“But while the attention right now is very much focused on this drug… [it] is a new twist on a story that’s been going on for a while,” Reilly said.

Reilly pushes back against congressional leaders who are challenging the rising cost of specialty drugs and want the Department of Health and Human Services (HHS) to negotiate down the price of treatments like Sovaldi in Medicare Part D plans.

Reilly warns the fight isn’t just about one Hepatitis C drug but future drugs that could save the healthcare system billions of dollars by reducing costs such as chronic care and hospital bills.

 Reilly also says if drugmakers aren’t able to recoup their research and development dollars for diseases like cancer and Alzheimer’s, new drugs won’t come to the market.

“With regards to Alzheimer’s, since 1998, companies have made just over 100 attempts to develop a medicine to treat this disease, while only three medicines have been approved,” said Reilly. “For every one success, there have been about 34 failures.  We need a vibrant research ecosystem to absorb the inevitable failures and continue to move research forward.”

She also notes if an Alzheimer’s drug that could delay the onset of the disease were to come to market today, it would save Medicare and Medicaid $100 billion annually by 2030.

Reilly grew up in Laurel, Md., and initially thought about becoming an agent with the FBI because her dad was one during the height of the Cold War. However, she was turned down because of her eyesight, which she has since had corrected through Lasik surgery.

She studied law at the University of Nebraska and worked for the state’s attorney general and a county attorney’s office in her senior year. She decided to move back east to become a prosecutor and ended up landing several jobs on Capitol Hill.

She was a counsel on the House Energy and Commerce Committee before taking a position as a policy director at PhRMA, where she worked her way up over the next 13 years.

“My ultimate goal is being a good role model for my children,” she said. “While it is often stressful managing my current job and being a good mom, it is important for my children to understand that hard work pays off.”

Reilly said that, while she is dedicated to her job, she leaves her work behind when she leaves the office so she can focus on her family, and she feels fortunate that PhRMA lets her maintain that work-life balance.

“I don’t know if I’ve ever gotten an email from [PhRMA CEO John Castellani] after 5 p.m. He really respects the boundaries of home life, which is nice. And if you’re doing what you’re supposed to be doing, he’s kind of hands off.”

As with other healthcare-related enterprises, PhRMA is very focused on how the Affordable Care Act (ACA) is being implemented and how it can leverage the law to the benefit of its members.

“We supported the passage of the Affordable Care Act, but as it’s been implemented, we’ve had some concerns with regards to patient access to therapies,” Reilly said. “We’ve seen many instances where certain types of medication are all placed on the highest tier formulary for a given plan. It makes them difficult for patients to access.”

Reilly’s comments echo PhRMA’s recent turf war against America’s Health Insurance Plans (AHIP), the main insurance company lobby group.

While AHIP has continually attacked the rising cost of prescription drugs, PhRMA says the real problem is how much co-pay insurance companies are asking of consumers.

“The discussion of prescription drug costs has ramped up at a time when prescription drug cost growth is at historic lows,” she said. “We also need to recognize that inadequate insurance coverage is a key barrier to affordability for patients.”

Reilly said that, while insurance companies on average require patients to pay 4 percent of their hospital bills, they are often asked to pay 40 percent or more for certain drugs, such as antiretrovirals to treat HIV.

To fix this, she said, HHS could implement rules under the ACA requiring insurers to pay for a larger share of drug costs and reduce the burden on consumers.

“If you’re buying a silver plan, and you’re expecting the plan is going to pay 70 percent of the cost of it, well [insurance companies] shouldn’t be able to treat drugs at a very low percentage relative to other healthcare services,” Reilly said.

She also said health exchanges need to implement an out-of-pocket calculator that was promised in the ACA so consumers could determine how much their chronic drug coverage will cost based on their plan.

Reilly said the Food and Drug Administration needs to change the way it approves new drugs.

“As a first step, FDA should apply fully the existing broad regulatory flexibility granted under the Federal Food, Drug, and Cosmetic Act, and also enhance its ability to make decisions regarding therapeutic benefit based on real-world evidence as a supplement or potentially as a replacement for randomized controlled trials,” Reilly said.

But Reilly is skeptical that Congress will be able to move any sort of legislation that deals with updating the ACA in the foreseeable future.

“My assumption is, given the politics of the situation, we’re not quite there yet,” she said.

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