Facing bipartisan attacks, PhRMA goes on offensive

The pharmaceutical industry is going on the offensive against the barrage of political attacks from all directions over skyrocketing drug prices.

Pharmaceutical Research and Manufacturers of America, or PhRMA, which represents dozens of the world’s highest-grossing drug companies, is trying to escape the brunt of that assault, in part by blaming insurers and federal regulators for the increased costs.

{mosads}“Just looking at the list price doesn’t tell the full picture of what’s going on in the marketplace,” Lori Reilly, executive vice president for policy at PhRMA, told reporters during a briefing at the trade group’s downtown office.

“We think it’s fair to have a conversation about costs, but if we’re going to do that, let’s have a conversation about costs generally, and where costs in the healthcare system are coming from,” Reilly said as she delivered a 30-slide presentation with topics such as “benefits of medicines to patients” and “putting prescription drug spending in context.”

PhRMA is responding to a slew of political attacks against drug companies, mostly by Democrats such as presidential hopefuls Hillary Clinton and Sen. Bernie Sanders. But drug companies are becoming a bipartisan target, with GOP contender Marco Rubio recently taking a stab at the industry.

“It has become a major consumer issue. Anyone who isn’t talking about it is going to be seen as tone-deaf to the concerns of American consumers,” said Dan Mendelson, president of the healthcare consulting firm Avalere.

As drug politics heat up, Mendelson said most pharmaceutical companies “have not effectively communicated their messages around science, innovation and kind of the value they bring to healthcare.” And with companies, including the now-infamous Turing Pharmaceuticals, making headlines for potentially abusive practices, it’s easier for drug companies to be portrayed as the enemy.

But in the 90-minute briefing with reporters, Reilly and other top officials delivered their rebuttal to the drug company blamegame, one of the most hotly contested healthcare policy debates on Capitol Hill.

The executives argued that health insurers, not drug companies, are forcing patients to shoulder more of the costs through higher deductibles and copays while also adding coverage restrictions. Reilly argued that insurers have a stronger role in pricing because they determine what prices each patient will see on his or her bill.

She also pointed to the slowdown in government approvals of new drugs and the quickening pace of patent expirations and detailed the costly and time-intensive process of developing drugs.

“There are things in the system today that are based on a model that existed 20-plus years ago, and that world has changed, and we need to look at some of the rules that stand in the way,” Reilly said.

There’s more pressure for pharmaceutical companies to go up against insurers after the rollout of the healthcare reform law.

“[Pharma companies] have to be active because of the environment. They have to get their message out,” Mendelson said. “The government and the plans are aligning, and as a result, the pharmaceutical industry has to be active.”

For its part, the insurance industry, represented in Washington by the powerful America’s Health Insurance Plans (AHIP), has also highlighted the spiking drug prices.

“Over the past several months, consumers — as well as hospitals, providers, employers, and state Medicaid directors — have grown increasingly frustrated by drug costs that show no sign of slowing down,” AHIP’s new leader, Marilyn Tavenner, who was administrator of the Centers for Medicare and Medicaid Services, wrote in a statement last month.

Tavenner condemned ideas from Clinton and Sanders that would force government negotiation of drug prices or create caps on insurance coverage and instead stressed that the transparency of drug prices — a subtle jab at drug companies.

Drug politics have grabbed hold of the 2016 campaign, with the two leading Democratic presidential candidates accusing the industry of price-gouging in stump speeches across the country.

Both Sanders and Clinton have vowed to crack down on the drug companies, promising federal controls on prices. Clinton also declared drug companies a top enemy in last month’s nationally televised debate.

But the attacks against PhRMA are also coming from the GOP, the party that is traditionally aligned with the industry. In a campaign event last October, Rubio skewered drug companies that raise the price of products to make up
for falling demand, a practice he called “pure profiteering.”

“These companies decide, ‘We can get away with charging it, and so we do,’ ” Rubio said at a campaign event in Portsmouth, N.H.

On Capitol Hill, a group of House Democrats is set this week to roll out a new task force on drug prices led by one of the industry’s toughest critics, Rep. Elijiah Cummings (D-Md.).

In a statement to The Hill, Cummings assailed drugmakers “that increase their prices exponentially — often overnight and with no apparent link to any increases in their expenses or costs — to rake in obscene profits for themselves and their shareholders.”

The White House also announced this week it would create a public forum on drug prices amid intensifying scrutiny of the issue. The forum in Washington on Nov. 20 will bring together drug companies, insurers, consumers and other stakeholders to discuss the issue.

The drug company backlash is coming to a head after more than a year of friction, with headlines focused on Sovaldi’s hepatitis C drugs, which are draining state Medicaid budgets, and the practices at Valeant Pharmaceuticals, which precipitated a nosedive in stocks.

The biggest shock likely came from Turing Pharmaceuticals, which raised the prices of a life-saving drug commonly used by HIV patients more than 5,000 percent overnight.

PhRMA has sought to distance itself from both companies, and one way of doing so is through Twitter.

In a tweet last month, PhRMA wrote, “Unlike Valeant and Turing, innovative biopharma companies have #research at the core.”

The same day, the group also tweeted, “The biopharma industry spends more on R&D than the entire NIH operating budget.”