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Big Pharma Thinks Ad Campaign Makes Drug Prices Palatable


— January 26, 2017

Now that the post-inauguration dust has mostly settled, the new Commander-in-Chief is setting about the task of fulfilling his promise to “Make America Great Again.” One of his targets is Big Pharma and the industry’s fondness for jacking drug prices so high you almost need the Hubble telescope to see them. Of course, the industry is not about to take this without fighting back. Even Martin Shkreli, Big Pharma’s former bad boy, has some things to say about it (and not what you’d expect). I’m glad I’m sitting down to write this because I’m about to say something I never imagined: I agree with both of these gentlemen, Trump and Shkreli, on this issue.


Now that the post-inauguration dust has mostly settled, the new Commander-in-Chief is setting about the task of fulfilling his promise to “Make America Great Again.” One of his targets is Big Pharma and the industry’s fondness for jacking drug prices so high you almost need the Hubble telescope to see them. Of course, the industry is not about to take this without fighting back. Even Martin Shkreli, Big Pharma’s former bad boy, has some things to say about it (and not what you’d expect). I’m glad I’m sitting down to write this because I’m about to say something I never imagined: I agree with both of these gentlemen, Trump and Shkreli, on this issue.

Now that I’ve picked my jaw up off the floor after that last statement, let’s take a look at the issue.

PhRMA, the Pharmaceutical Research and Manufacturers of America, Big Pharma’s high-powered Washington lobbying group, is mounting a defense to all the anger Americans (including the man in the Oval Office) are aiming at the industry over its nasty habit of increasing drug prices. What’s the plan?

Stephen Ubl, CEO of PhRMA said, “We are going on offense. We are launching the most comprehensive campaign we’ve ever embarked on.”

No kidding. The group has plans to dump tens of millions of dollars a year over the next four to five years into ads and other PR attempts to make price hikes acceptable in the name of good research and drug development. Tens of millions of dollars every year. Yeah, all that money from price hikes gets pumped back into R&D. Sure, it does. And I will be the 46th President of the United States, winning on a platform of sarcasm and dry toast.

Big Pharma thought it was home free when Trump defeated Clinton, whose campaign featured heavy criticism of the industry and its increase of drug prices. As a Bloomberg article reported, the man Big Pharma thought would let them do whatever they wanted stated that a bidding process would be fairer and that “they’re [pharmaceutical companies] getting away with murder.”

Heh. So much for home free. You may want to put down your beverage of choice and swallow before reading what comes next. If you don’t, I cannot be held responsible for soaked or ruined laptops and keyboards.

Mr. Ubl, of the mistaken assumption that commercials will make people feel better about paying thousands of dollars a pill on certain drugs said, “This industry is a crown jewel of the American economy. We have a great story to tell and we’re going to start telling it.” A crown jewel of the American economy. If you can keep your last meal down after that, you’re better than I, my friends.

It gets better, though. Mr. Ubl avoided commenting on Trump’s plan to make Big Pharma bid for government contracts, but did say that “innovative contracting” is an industry goal. What does that mean? Plans like “value-based pricing,” a buzz-wordy way of saying that prices would be based on each drug’s clinical benefits.

Celgene, Inc. Chairman Robert Hugin was interviewed by Bloomberg Television. In that interview, he stated “We think we should always be value-based. If the drug doesn’t provide value to the system and to the patient, we shouldn’t have price increases, or the price will change.”

So, it’s OK to jack drug prices through the roof as long as the drugs benefit patients. If they don’t, then the drugs stay affordable. I’m still looking for the logic in that statement. Beneficial products like Epi-Pens should bear higher prices because they save lives? Higher prices often mean the folks whose lives are being saved can’t afford the products. That’s the whole point of the argument! “Value-based” is a bad joke and the punchline is suffering patients.

For the second time during the writing of this piece, I’m forced to admit that I agree with a group that is normally on my “list”: insurance companies. They, along with other health care companies, have formed the Campaign for Sustainable Rx Pricing (CSRXP). The group’s website says:

“Drug prices in the United States are too high and sharply rising prescription drug prices threaten the affordability of health care and the vitality of our entire economy. The current system is simply unsustainable — not only for families but also for American businesses and our economy, state, and federal governments. Rising prices drive up health care costs for all of us. Businesses are forced to raise costs and cut wages. Consumers are forced to choose between paying for medicine and paying the bills. Workers delay care, live sicker, and are less productive.”

So, again, where’s the logic in “value-based” pricing? People are being forced to choose between dinner and medications! How is that serving anyone but Big Pharma’s executives and shareholders? It also highlights the ridiculousness of the statement that Big Pharma is “a crown jewel” of America’s economy. I’m no economist, but I don’t have to be one to see that CSRXP’s statement sure doesn’t sound like Big Pharma is doing much for the American economy.

One of the group’s ideas is requiring Big Pharma to submit drug price increases of 10% or greater to the government for review. Currently, the U.S. doesn’t regulate drug prices directly, nor does it work with drug makers for discounts. One Big Pharma executive, CEO of Allergan PLC, Brent Saunders, would like to see the industry police itself in order to escape government interference. Sure, because Big Pharma does such a good job of that now. To his credit, Mr. Saunders announced that Allergan plans to limit annual drug price increases.

Back to the people, the target audience of PhRMA’s ad campaign. CSRXP’s Executive Director John Rother issued an email statement that perfectly sums up the value of the ad campaign. “No amount of advertising will make hardworking families forget the consequences of their out-of-control drug costs. They feel the impact every time they choose between paying bills, buying groceries, or refilling a medication they need to stay healthy.”

And yet, PhRMA plans to dump hundreds of millions of dollars into ads. Why not take that money and strengthen internal programs that assist patients who can’t afford their medicines? The ad campaign budget could help subsidize drug costs for those individuals, in some cases, even providing the drugs at no cost. Such programs exist now at most Big Pharma companies and all these lobbying millions could be put to better use funding those programs.

Instead, we’ll get gems like TV commercials showing brave patients and researchers soldiering on in the war on disease with Dylan Thomas’ poem “Do not go gentle into that good night” as the background. If that’s not enough to make you nauseated (better check that you can afford the anti-nausea drugs!), try the print ads on for size. These beauties will feature such “uplifting” messages as, “Magellan and Columbus explored new worlds. But nothing like this.”

Barf bag, anyone?

PhRMA’s fond hope is that it will still get away with murder on drug prices if only it makes the industry look better. Mr. Ubl went so far as to say there needs to be “less hoodie, more lab coat,” a thinly-veiled jab at former Turing CEO, Martin Shkreli. Mr. Shkreli became the industry’s bad boy when his company increased the price of Daraprim, a drug designed to treat toxoplasmosis, a fatal infection in pregnant women and those with compromised immune systems.

I don’t think (if it’s not obvious by now) that the ad campaign will work. Not unless it’s a crafty way of increasing anti-emetic drug sales (drugs that prevent nausea and vomiting).

What does Mr. Shkreli think of all this? Again, put down your beverage of choice. This time it’s not because I think you’ll do a spit-take in outrage. I think it’ll be from laughter.

Martin Shkreli, image courtesy of www.money.cnn.com.
Martin Shkreli, image courtesy of www.money.cnn.com.

The once-called “Pharma Bro” put up a new website, Pharma Skeletons, in response to the “less hoodie, more lab coat” comment. His point in doing so is that excessive drug price increases are not just his thing, but that pharmaceuticals of all sizes are doing the same thing and have been for years. And, in true Shkreli fashion, he’s naming names and holding nothing back. Don’t say I didn’t warn you.

He lists dozens of fellow pharma companies, and their drug price increases, with links to articles and a liberal dose of his own commentary. One of my personal favorites is Horizon Pharma PLC.

Here’s Mr. Shkreli’s take on Horizon:

“Horizon

LOLOLOLOLOLOLOL. Deep breath. Resume laughing. LOLOLOLOLOL.

PHRMA is defending the poster child of price increases?

Doing a Freidreich’s study that couldn’t have worked doesn’t count as R&D that will magically absolve you.

Horizon is another tax avoider. Ireland headquarters. So much pharma talent there. So many lab coats.”

The Bloomberg article to which Mr. Shkreli links says, in part, “Take Actimmune, developed by Genentech Inc. decades ago. By 2012, sales were fizzling. Then rights to the immune-disorder treatment were acquired by a company backed by private equity. The price climbed, 434 percent in two years, and Actimmune was a hot property. Horizon Pharma Plc snapped it up.”

Granted, there is that old saying about people who live in glass houses not throwing rocks, but I have to give Mr. Shkreli credit for calling out the rest of the industry. He may have been the lightning rod that attracted the ire of a nation, but he’s also the one who really brought the nation’s focus to the problem.

Even so, snarky websites and stupid ad campaigns (seriously, where is that barf bag?) are not going to fix the disaster of out-of-control drug prices. Only some serious policing from outside the industry is going to do that and save those who are forced daily to choose between meals and medicine.

Sources:

Pharma Lobby Fights Back Against Trump Criticism With TV Ads
Shkreli bites back at industry ad campaign

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