The new head of D.C.’s biggest drug lobby has a strategy to help overcome a tortuous year of bad publicity on pricing: More lab coats on Capitol Hill.
Steve Ubl, president and CEO of the Pharmaceutical Researcher and Manufacturers Association (PhRMA), plans to deploy top scientists and researchers to meet with lawmakers in a potentially make-or-break year for the industry.
It’s a marked shift for a drug lobby that Ubl acknowledged has “focused on defense” since it became a political target during the early days of the Affordable Care Act, and even more recently during the fierce debate over drug pricing.
“I think it's fair to say this represents a bit of a pivot for the organization. We’re going to develop a proactive policy agenda, and we’re going to drive it,” Ubl said in an interview in his downtown D.C. office this month.
“The industry has had a bit of a bunker mentality,” added Ubl, PhRMA’s first new CEO in six years.
Since September, Ubl has been working to spot clean a public image that has been badly tarnished this year by individuals like Martin Shkreli, seen by some as public symbols of greed.
Shkreli’s former company, Turing Pharmaceuticals, drew national scorn last year for hiking up the costs of a decades-old drug used by AIDS patients by 5,000 percent. The pricing scheme from the so-called “pharma bro,” plus similar tactics by Valeant Pharmaceuticals, grabbed headlines nationwide and became the subject of rare bipartisan probes on Capitol Hill.
About a year before that, the drug lobby was under fire for a Hepatitis C cure that was draining state budgets at an initial cost of $1,000 per pill. (Today, Ubl says he stands by that price: “Even the launch price, which nobody’s paying anymore, is a bargain.”)
As tensions flared about drug prices last fall, PhRMA focused on making clear that neither Turing nor Valeant Pharmaceuticals were part of their organization. Neither is Gilead, the company that created the costly Hepatitis C drug.
Over the last year, PhRMA tried to push back against the outrage over drug pricing with press briefings and extensive explanations of the complex world of drug pricing.
Starting now, the organization also hopes to push out the federal policy changes that it believed can actually limit price increases.
“When I talk about going on offense, yes I want to educate about the myopic debate, the misinformation about the way the market is working, but I’m referring to a sort of proactive agenda,” Ubl said.
This month, PhRMA released a 10-page “policy platform,” a wonky wish list of long-sought changes to policies under the Food and Drug Administration.
One example is freeing up clinical data after a drug goes on the market that would allow PhRMA to help make its case for the success rates of its drugs. Another would be a loosening of the criteria for clinical trials, which are currently governed by a strict, decades-old design.
Some of PhRMA’s proposals have gained momentum on Capitol Hill. Leaders of the House and Energy Commerce Committee recently led an FDA overhaul package called “21st Century Cures” that was passed nearly unanimously on the House floor.
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“Our industry has become an easy political target,” Kenneth Frazier, the president and CEO of Merck & Co., who is a member of PhRMA’s board, said this month. “We’ve seen politicians from both sides of the aisle singling out our industry as the source of the problem.”
As drug pricing heats up on both sides of the 2016 campaign, PhRMA has been hitting the airwaves to offer a brighter side of the business. In February, the company announced a multimillion-dollar ad campaign called “From Hopes to Cures” in D.C., aimed at lawmakers.
The organization also recently tapped Biogen CEO Dr. George Scangos, who brings decades of experience in research and development, to become the chairman of its board.
“It’s just the perfect moment to have a researcher as chairman of the organization,” Ubl said.
The former CEO, John Castellani, who passed the mantle last fall after six years leading PhRMA, didn’t shy away from the drug pricing debate. He would often dispute PhRMA’s perceived role in the growing costs of medicine. But in many statements and letters to the editor, he spent more time blaming the “outdated insurance model” than pitching new policies.
When Ubl talks about PhRMA’s focus as a whole this year, he paraphrases the famous line from a “Tale of Two Cities”: It’s the best of times and the worst of times.
Within the last two years, federal health officials approved 44 new drugs, marking an 18-year high, with a pipeline of “blockbuster” drugs that is expected to keep growing. Researchers have also hailed breakthroughs in curing diseases like Hepatitis C and key advances in cracking the human genome.
But he’s also aware that PhRMA needs to retool its image.
The most public signs of that rebranding effort were showcased at an annual conference in Washington, D.C., last month.
The two-day conference featured forward-focused speeches from PhRMA leaders including Ubl and Scangos. The speeches focused on “groundbreaking science” that will lead to breakthroughs in diseases like Alzheimer's and diabetes within the next decade.
Andy Slavitt, who leads the powerful Centers for Medicare and Medicaid Centers (CMS), addressed the concerns about drug prices during a panel discussion on stage at PhRMA’s conference.
“This is America. We want to have our cake and eat it, too. We want innovation, but we also want to be able to afford it,” Slavitt said, while he repeatedly shied away from backing specific policy recommendations.
Echoing a common PhRMA line, Slavitt said “there are a lot of things that happen” to a drug’s price after it is manufactured. “There is a whole bunch of complexity. Nobody in the American public understands it,” he said. “We all have a difficult time understanding it.”