Drug industry faces Trump-fueled storm over prices

Drug industry faces Trump-fueled storm over prices
© Greg Nash

Drugmakers are trying to navigate a growing storm over high drug prices as President TrumpDonald John TrumpForget the spin: Five unrefuted Mueller Report revelations Lara Trump: Merkel admitting migrants 'one of the worst things that ever happened to Germany' Financial satisfaction hits record high: survey MORE prepares to unveil new actions on the issue. 

The drug industry has traditionally been able to beat back actions from Washington, notably escaping unscathed in the fight over ObamaCare. But the climate appears to be changing. 

Trump has railed against drug companies for their prices, saying they are “getting away with murder.” And Congress, where pharmaceutical companies have traditionally had allies in both parties, dealt the industry a rare defeat earlier this year by shifting more costs onto drugmakers in Medicare. 

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It’s up to Steve Ubl, the CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), to make the case for the industry as Trump prepares to give a speech on drug pricing actions, which is expected next week. 

Ubl, in an interview with The Hill at the group’s Washington office, said he understands where Trump is coming from when it comes to his criticism of drug pricing. But he says policymakers need to look at the bigger picture. 

“His comments are reflecting this very real populist impulse which is patients are paying more for their healthcare, they are paying more for their medicine, and what we're doing is trying to open the aperture on this discussion and really look at all the factors that bear on what patients pay out of pocket,” Ubl said when asked about Trump’s “getting away with murder” comments.

Ubl said policymakers should look at other groups that affect what patients pay for drugs, including insurance companies and negotiators known as pharmacy benefit managers.

Advocates for lower drug prices dismiss PhRMA’s argument that insurers and pharmacy benefit managers are to blame for high prices.

“That is an argument that pharma would love for everyone else to believe,” said Ben Wakana, executive director of the advocacy group Patients for Affordable Drugs. “The fact is the biggest problem is the price and that price is set by pharma.” 

It remains to be seen how far Trump will go in his drug pricing speech next week.

So far during his administration, advocates have lamented that his actions on drug pricing have fallen short of his rhetoric. The administration has yet to target the pharmaceutical industry in any significant way.

But Wakana said he is “hopeful” that Trump’s speech next week will be a turning point. 

He said polls show public opinion is firmly against PhRMA. A Kaiser Family Foundation poll in March, for example, found that 52 percent of the public said legislation to bring down the price of drugs should be a "top priority,” above action on infrastructure, immigration or ObamaCare. 

A separate poll from the group in 2015 found 24 percent of those who take prescription drugs had not filled a prescription in the past year because of cost. 

Ubl, for his part, says he realizes his group needs to stay on its toes. The group’s lobbying spending reached a new high of almost $10 million in the first quarter of this year as PhRMA sought to get its message out in Washington. 

“We know what's at stake in this discussion and we want to make sure that we're carefully threading the needle,” Ubl said.

But Ubl had some praise for actions the administration has taken so far, such as the Food and Drug Administration’s moves to approve more generic drugs and whittle down the backlog of applications.

“In general, I think the administration has taken some concrete steps in the right direction,” he said. 

Congress, though, recently took a direct shot at drug companies. As part of the bipartisan budget deal in February, lawmakers shifted a higher share of costs onto the industry as part of filling a gap in Medicare coverage known as the “donut hole.” 

The change caught drug companies by surprise, and spurred an intense lobbying effort to roll back the move in the omnibus spending bill in March that was unsuccessful. Some observers took the episode as a sign of lawmakers turning against the industry, though in an election year further major congressional action seems unlikely. 

Ubl acknowledged the episode was a loss.

“I think we were surprised by the magnitude of the policy change initially,” he said.

“We remain concerned about the policy,” he added. “We were disappointed that it wasn't addressed in the omnibus and we'll remain focused on it.”

Despite the Medicare defeat, PhRMA remains one of the most powerful players in Washington, often taking heat from both the left and the right.

“I'm certainly proud of our team; I think that we are an effective advocacy organization,” Ubl said. “But again, I think the influence comes from coming to the table with real reforms.”

He said he is trying to shift the organization to putting forward its own ideas rather than just defeating bad ones. Its push to get insurers to pass discounts on to consumers has already borne some fruit, with Aetna and United Healthcare recently announcing they would do so for many customers.

“I think the organization has always been adept at defeating bad policy ideas, but the muscle around developing third way proactive solutions has been less well developed, and so one of the things that I've tried to do is bring this more proactive approach,” Ubl said.

The group also faces pressure on the epidemic of opioid overdoses. Sen. Ron WydenRonald (Ron) Lee WydenCongress can retire the retirement crisis Dems accuse White House of caving to Trump's 'ego' on Russian meddling The difference between good and bad tax reform MORE (Ore.), the top Democrat on the Senate Finance Committee, has called on drug executives to be called to testify on their role in the crisis. 

Asked about drugmakers’ responsibility, Ubl said, “I think it is a terrible public health crisis that's multifactoral in terms of its origin, and it's going to take all stakeholders, manufacturers, providers, state and local governments, law enforcement to come together to solve it.”

He noted PhRMA has endorsed limiting opioid prescriptions for acute pain to seven days.

The most immediate action, though, is coming next week, when Trump is expected to give his speech. And Ubl says it’s difficult to know for sure what the president will say.

“It's hard to speculate what the administration will or won't do,” he said.