PINKERTON: A New Vision for Big Pharma and for the American Patient in the Trump Era

PINKERTON: A New Vision for Big Pharma and for the American Patient in the Trump Era

by James P. Pinkerton21 Feb 2017

http://www.breitbart.com/big-government/2017/02/21/pinkerton-new-vision-big-pharma-american-patient-trump-era/

First of Four Parts…

The Pharma Companies In the Crosshairs 

During last year’s presidential campaign, candidate Donald Trump said that if elected, he would save the federal government billions by forcing the pharmaceutical companies to negotiate—that is, lower—their prices.

On January 11, 2017, President-elect Trump said that the pharma companies were “getting away with murder” in their pricing, and reiterated his demand for new competition policies aimed at bringing down costs.

On January 31, President Trump met face-to-face with top executives and offered a more nuanced exposition of his thinking.  First, he reiterated his oft-expressed point about the value of market forces:

US drug companies have produced extraordinary results for our country, but the prices have been astronomical.  . . . We have to get the prices down.  . . . Competition [is] the key to lower drug prices.

Second, Trump demonstrated that he fully understood the life-saving value of medical innovation: “New drugs have led to longer, healthier lives—we all know that—but we have to do better accelerating cures.”  (This author has taken note of Trump’s advocacy of a “Cure Strategy” many times, including here and here.) 

“Big Pharma” ought to take all of Trump’s words to heart, because the President is putting forth a balanced package that includes a carrot, as well as a stick. By contrast, most other politicians, at least the ones who are most vocal, are brandishing only the stick. 

In the meantime, today, Big Pharma certainly is getting sticked.  And many would say that the industry deserves every last whack.  We can quickly review the parade of horrible headliners—from just the past year—that have been hauled before Congress for a televised whupping: 

*Turing Pharmaceuticals LLC acquired the anti-bacterial drug Daraprim, which has been used since 1953, and immediately raised the price from $13.50 a dose to $750 a dose—a 5550 percent increase.  

*Valeant Pharmaceuticals International bought the rights to a 30-year-old drug, Syprine, used to treat Wilson’s Disease, in 2010 and raised the price by more than 3000 percent.  Prices for other drugs from that company were raised between 300 percent and 700 percent. 

*Mylan Pharmaceuticals hiked the price of its epinephrine injector EpiPen, used to treat emergency allergic reactions, by 600 percent. 

*Kaléo Pharma, which competes with Mylan, raised the price of its epinephrine injector, Evzio, by 650 percent. Indeed, it’s, uh, interesting that Mylan and Kaléo seemed to have been raising their prices in lockstep. 

*Marathon Pharmaceuticals jacked up the price of its decades-old drug, Emflaza, which treats Duchenne’s Muscular Dystrophy, by 50,000 to 70,000 percent. 

We must quickly declare that there are two sides to each of these stories.  For example, the stated prices of these drugs is just that—the stated price.  The actual price paid, after haggling by insurance companies or pharmacy benefit managers, is often much, much lower. 

However, because of the initial “optics” of the price hikes, the political damage has been done, and the political consequences have been felt.  Citing the most recent horrible headliner, Marathon, Axios’ Bob Herman explains: 

Several years ago, Marathon’s drug price hike would have floated under the radar.  But this is the clearest example yet of what will happen if drug companies price medications beyond what is acceptable by the public and Congress.

Indeed, pharma-bashing has burnished the cable-TV presence of such top Democrats as Sen. Bernie Sanders, Sen. Elizabeth Warren, and Rep. Elijah Cummings, of Maryland. 

Meanwhile, some Republicans are catching up.  For instance, Rep. Greg Walden of Oregon, chairman of the powerful House Energy and Commerce Committee, recently declared, “For those in industry who think it’s OK to corner a market, drive up prices and rip off consumers, know that your days are numbered.”  And in fact, bipartisan legislation to address the drug-pricing issue is reportedly coming soon.  

In the meantime, the public is right there with the lawmakers.  A 2016 Gallup Poll found that the pharmaceutical industry ranks 24th in popularity among 25 institutions surveyed; it ranked behind, even, such legendary low-rankers as advertisers and lawyers.  Only the federal government rated worse.  

To be precise about it, the drugmakers enjoy positive feelings among just 28 percent of Americans, while 51 percent feel negatively; that’s a net negative of 23 points.  

The biggest reason for this unpopularity, of course, is prices.  According to a Kaiser Family Foundation poll, a full 73 percent of Americans think that the cost of prescription drugs is “unreasonable.” When further asked why drug prices are so high, 76 percent blamed the companies themselves, as opposed to other possible miscreants, such as trial lawyers and government regulators.  

We might pause to observe that many experts believe that these latter miscreants are a far greater cost-problem than most people realizes; today, the cost of bringing a single new drug to market is $2.6 billion, and that cost has risen 145 percent over the previous decade—thank you, litigators and regulators.  And yet the public doesn’t know this, and so long as the news is only about jacked-up prices, it never will.

Without a doubt, the US spends a lot of money on medical drugs; in 2015, the total was $324.6 billion.  But then, just about every dollar-total in the US is enormous.  

In fact, a more useful metric is the proportionate share of the total that’s spent on healthcare by the whole country.  And here we see that drugs count for only about 10 percent of the National Health Expenditure, which in 2015 totaled $3.2 trillion. (Medical equipment, durable and non-durable, accounts for another four percent of GDP.)

In fact, if we think about drugs within the context of healthcare overall, we quickly realize that of all the possible kinds of health therapies, taking effective medicine is almost always better than, say, surgery and an extended stay in the hospital.  In other words, we would better off if medicine was more of a factor in the healthcare equation.  

Yet in the meantime, in this supersaturated political environment, Big Pharma is a juicy target.  Last year in California, liberal activists put up a ballot referendum, Proposition 61, which would have price-capped drug prices in the Golden State.  Industry-backed opponents of the measure outspent proponents by a 7:1 margin, eking out a 53:47 victory.  

Yet now that the smoke has cleared, we might survey the ruins: The pharma industry spent at least $109 million in opposing Prop 61, and what, exactly, does it have to show for the expenditure?  Yes, it missed the ballot-bullet, and yet it’s $109 million poorer, and probably even less popular.  

So the ideological left in California is sure to make another run at the industry, in the form of another referendum, or action by the Democratic governor, or the Democratic legislature—or all three.  Meanwhile, progressives in other states, notably Ohio, are cooking up similar price-controlling proposals.  

In belated response to such threats, the industry is trying to clean up its act.  For instance, in January, Pfizer CEO Ian Read drew a bright line between the larger, more established companies, and the newer and more piratical upstarts.  As Read put it, “Most of the problem of reputation is coming from those that I don’t consider part of the ethical pharmaceutical business”; Read then name-checked Mylan, Turing, and Valeant.

More recently, the case of Marathon has been so egregious—and so harmful to the industry’s image—that the leading pharma trade association, PhRMA, has begun to take action that goes beyond words.  Under the February 15 headline, “Pharma Lobby May Boot Company That Introduced High-Priced Drug,” Bloomberg News reported that PhRMA is taking a hard look at possibly ejecting Marathon from its membership.  According to Stephen Ubl, CEO of PhRMA, Marathon’s “recent actions are not consistent with the mission of our organization.”

Translation: PhRMA is thinking about a membership purge—always a difficult step for a member-based organization. 

Now if we step back a bit, with history in mind, we can be reminded that, as a general rule, when an industry finds itself afflicted with “bad apples,” its first instinct is to police itself.  That is, self-regulate.

Yet it may be too late for self-regulation: Here’s a thought sure to send a chill up and down the spine of pharma, courtesy of Bloomberg columnist Joe Nocera: He predicts that pharma companies will be seen in the same bad light as the tobacco companies and the banks.  Those two industries, we recall, were confronted by scads of bad press and were, as a result, litigated or regulated to new heights—or, some would say, new depths. 

By this reckoning, it’s easy to see trouble ahead for pharma.  One possibility is direct price regulation, akin to the old Interstate Commerce Commission, which was created by Congress in 1887 to regulate railroad rates.  (The ICC, which many economists blame for bankrupting just about every rail carrier that it red-taped, was abolished in 1996.)  More recent regulatory models are the public-utility commissions in every American state—and those aren’t going anywhere.  

The problem with such regulation, of course, is that it tends to squelch innovation.  And yet, if present trends continue, the industry’s self-regulation notwithstanding, new governmental rules are inevitable.   

So before the situation gets out of hand, we might pause to consider the stakes—for each one of us.  And here President Trump seems to have the right policy perspective: Yes, we need reasonable drug prices, and yet we also need new medical cures.  

After all, the right drug can save lives.  And while drugs can be expensive, it’s worth remembering that being sick—or being dead—is even more expensive.  

Mass-Producing Medical Miracles 

A case in point is the drug Sovaldi, which reliably cures Hepatitis C, a liver-wasting disease that can cause disability, even death.  When Sovaldi was introduced in 2013, its maker, Gilead Sciences, caused a ruckus by announcing that it was charging $1000 a pill, or $84,000 for the needed 12-week regimen.  That was a high price, for sure, and political fireworks ensued, and yet nothing changed the fact that the drug worked—it was a cure.  And a cure was cheaper than a lifetime on, say, the federal SSI program for the disabled.  Indeed, if Hep C victims can be healed and returned to the taxpaying workforce, it’s a win-win, for both patients and taxpayers.  

In fact, over the past four years, the familiar combination of price-haggling and new competitors entering the market has served to drive down prices for Hep C treatment.  Today, there are no less than 31 drugs on the market to treat Hep C, and some are rated even higher than Sovaldi. 

So how do we get more success stories like that?  How do we get more private-sector-generated drugs that serve the public interest?  More cures that save lives, and save money? 

We’ll take that up those questions in the succeeding installments.

Pharmaceutical Research and Manufacturers of America “Big Pharma”

Akin, Gump, Strauss, Hauer & Feld, LLP was a lobby firm for the Pharmaceutical Research and Manufacturers of America “Big Pharma” Johnson & Johnson, the Monsanto Company, and is the lobby firm for Pfizer Inc.

Note: Johnson & Johnson was a funder for the Bill, Hillary & Chelsea Clinton Foundation.

Monsanto Company was a funder for the Bill, Hillary & Chelsea Clinton Foundation.

Pfizer Inc. was a funder for the Bill, Hillary & Chelsea Clinton Foundation.

Vernon E. Jordan Jr. is a senior counsel for Akin, Gump, Strauss, Hauer & Feld, LLP, Valerie B. Jarrett’s great uncle, an honorary trustee at the Brookings Institution (think tank), a director at the American Friends of Bilderberg (think tank), and a 2008 Bilderberg conference participant (think tank).

Valerie B. Jarrett is Vernon E. Jordan Jr’s great niece, the senior adviser for the Barack Obama administration, and a member of the Commercial Club of Chicago.

Commercial Club of Chicago, Members Directory A-Z (Past Research)

Tuesday, December 17, 2013

http://thesteadydrip.blogspot.com/2013/12/commercial-club-of-chicago-members.html 

Cyrus F. Freidheim Jr. is a member of the Commercial Club of Chicago, and an honorary trustee at the Brookings Institution (think tank).        

Foundation to Promote Open Society was a funder for the Brookings Institution (think tank), and the Aspen Institute (think tank).

George Soros was the chairman for the Foundation to Promote Open Society, and is the founder & chairman for the Open Society Foundations.

Open Society Foundations was a funder for the Bill, Hillary & Chelsea Clinton Foundation.   

Mylan Inc. was a funder for the Bill, Hillary & Chelsea Clinton Foundation.

Mylan's $5.3 Billion Inversion Acquisition of Abbott's Generic Drug Business

https://www.cravath.com/Mylans-53-Billion-Inversion-Acquisition-of-Abbotts-Generic-Drug-Business/

Abbott Laboratories was a funder for the Bill, Hillary & Chelsea Clinton Foundation.

William M. Daley was a funder for the Bill, Hillary & Chelsea Clinton Foundation, a director at Abbott Laboratories, the chief of staff for the Barack Obama administration, a director at World Business Chicago, and is a member of the Commercial Club of Chicago.

Marathon Pharmaceuticals

https://en.wikipedia.org/wiki/Marathon_Pharmaceuticals

Jeffrey S. Aronin is the founder of Marathon Pharmaceuticals, and the chairman & CEO for Paragon Pharmaceuticals.

Jeffrey S. Aronin is the founder of Marathon Pharmaceuticals, the chairman & CEO for Paragon Pharmaceuticals, a director at World Business Chicago, a member of the Commercial Club of Chicago, was a fellow at the Aspen Institute (think tank), the president & CEO for Ovation Pharmaceuticals, Inc.

Ovation Pharmaceuticals, Inc. is a member of the Pharmaceutical Research and Manufacturers of America.

Bloomberg Family Foundation was a funder for the Aspen Institute (think tank), the CDC Foundation, and the Bill, Hillary & Chelsea Clinton Foundation.

Colleen A. Goggins was a board member for the CDC Foundation, the worldwide chairman, consumer group for Johnson & Johnson, and a director at the Valeant Pharmaceuticals International.

Michael R. Bloomberg is the founder of the Bloomberg Family Foundation, and the founder of Bloomberg LP.

Bloomberg Government is a division of Bloomberg LP.

Bloomberg Media Group is a division of Bloomberg LP.

Bloomberg News is a division of Bloomberg LP.

Bloomberg Politics is a division of Bloomberg LP.

Walter Isaacson is a director at the Bloomberg Family Foundation, and the president & CEO for the Aspen Institute (think tank).

James S. Crown is the vice chairman for the Aspen Institute (think tank), and a member of the Commercial Club of Chicago.

Rahm I. Emanuel is a member of the Commercial Club of Chicago, the Chicago (IL) mayor, Ari Emanuel’s brother, and was the White House chief of staff for the Barack Obama administration.  

Ari Emanuel is Rahm I. Emanuel’s brother, and the co-CEO & director for William Morris Endeavor Entertainment.

James J. Cramer is a William Morris Endeavor Entertainment client, the president of Harvard Crimson, and a Martin Shkreli was his college intern.

Martin Shkreli was James J. Cramer’s college intern, and the founder of Turing Pharmaceuticals.

Shkreli, Drug Price Gouger, Denies Fraud and Posts Bail

Arrested Thursday, accused of Ponzi-like scheme

By Christie Smythe and Keri Geiger | December 17, 2015

https://www.bloomberg.com/features/2015-martin-shkreli-securities-fraud/

Martin Shkreli, a boastful pharmaceutical executive who came under withering criticism for price gouging vital drugs, denied securities fraud charges on Thursday following an early morning arrest, and was freed on a $5 million bond.

R. Eden Martin is the president of the Commercial Club of Chicago, and counsel at Sidley Austin LLP.

Newton N. Minow is a member of the Commercial Club of Chicago, and a senior counsel at Sidley Austin LLP.

Michelle Obama was a lawyer at Sidley Austin LLP, and Camille Y. Johnston was her communications director for the Barack Obama administration.

Camille Y. Johnston was Michelle Obama’s communications director for the Barack Obama administration, and is the VP for the Siemens Corporation.

Siemens

https://en.wikipedia.org/wiki/Siemens

The principal divisions of the company are Industry, Energy, Healthcare, and Infrastructure & Cities, which represent the main activities of the company.^[3][4][5] The company is a prominent maker of medical diagnostics equipment and its medical health-care division, which generates about 12 percent of the company's total sales, is its second-most profitable unit, after the industrial automation division.^[6] The company is a component of the Euro Stoxx 50 stock market index.

Barack Obama was an intern at Sidley Austin LLP, and Obamacare is his signature policy initiative.

Sidley Austin LLP was the lobby firm for the Pharmaceutical Research and Manufacturers of America “Big Pharma”, and Pfizer Inc.

Valeant Pharmaceuticals International is a member of the Pharmaceutical Research and Manufacturers of America “Big Pharma”.

Colleen A. Goggins was a director at Valeant Pharmaceuticals International, a board member for the CDC Foundation, and a worldwide chairman, consumer group for Johnson & Johnson.

Bloomberg Family Foundation was a funder for the CDC Foundation, and the Aspen Institute (think tank).

Ann Dibble Jordan was a director at Johnson & Johnson, is an honorary trustee at the Brookings Institution (think tank), and her husband is Vernon E. Jordan Jr.

Vernon E. Jordan Jr. is married to Ann Dibble Jordan, Valerie B. Jarrett’s great uncle, an honorary trustee at the Brookings Institution (think tank), a director at the American Friends of Bilderberg (think tank), a senior counsel for Akin, Gump, Strauss, Hauer & Feld, LLP, and a 2008 Bilderberg conference participant (think tank).

Akin, Gump, Strauss, Hauer & Feld, LLP was a lobby firm for Johnson & Johnson, and the Pharmaceutical Research and Manufacturers of America “Big Pharma”, the Monsanto Company, and is the lobby firm for Pfizer Inc.

Johnson & Johnson was a funder for the Bill, Hillary & Chelsea Clinton Foundation.

Monsanto Company was a funder for the Bill, Hillary & Chelsea Clinton Foundation.

Pfizer Inc. was a funder for the Bill, Hillary & Chelsea Clinton Foundation.

Mylan Inc. was a funder for the Bill, Hillary & Chelsea Clinton Foundation.

Mylan's $5.3 Billion Inversion Acquisition of Abbott's Generic Drug Business

https://www.cravath.com/Mylans-53-Billion-Inversion-Acquisition-of-Abbotts-Generic-Drug-Business/

William M. Daley was a funder for the Bill, Hillary & Chelsea Clinton Foundation, a director at Abbott Laboratories, the chief of staff for the Barack Obama administration, a director at World Business Chicago, and is a member of the Commercial Club of Chicago.

Marathon Pharmaceuticals

https://en.wikipedia.org/wiki/Marathon_Pharmaceuticals

Jeffrey S. Aronin is the founder of Marathon Pharmaceuticals, and the chairman & CEO for Paragon Pharmaceuticals.

Jeffrey S. Aronin is the founder of Marathon Pharmaceuticals, the chairman & CEO for Paragon Pharmaceuticals, a director at World Business Chicago, a member of the Commercial Club of Chicago, was a fellow at the Aspen Institute (think tank), the president & CEO for Ovation Pharmaceuticals, Inc.

Ovation Pharmaceuticals, Inc. is a member of the Pharmaceutical Research and Manufacturers of America.

Akin, Gump, Strauss, Hauer & Feld, LLP was a lobby firm for the Pharmaceutical Research and Manufacturers of America “Big Pharma”, Johnson & Johnson, the Monsanto Company, and is the lobby firm for Pfizer Inc.

Johnson & Johnson was a funder for the Bill, Hillary & Chelsea Clinton Foundation.

Monsanto Company was a funder for the Bill, Hillary & Chelsea Clinton Foundation.

Pfizer Inc. was a funder for the Bill, Hillary & Chelsea Clinton Foundation.

George H. Poste is a director at the Monsanto Company, and the CEO for the Health Technology Networks.

Michael R. Taylor was a VP for public policy for the Monsanto Company, and a deputy commissioner for foods for the U.S. Food and Drug Administration (FDA).

Mark B. McClellan was a commissioner for the U.S. Food and Drug Administration (FDA), a senior fellow at the Brookings Institution (think tank), is a director for the Alliance for Health Reform, a director at the National Alliance for Hispanic Health, and a director at the Johnson & Johnson.

Ann Dibble Jordan is an honorary trustee at the Brookings Institution (think tank), her husband is Vernon E. Jordan Jr, and was a director at Johnson & Johnson.

Vernon E. Jordan Jr. is married to Ann Dibble Jordan, Valerie B. Jarrett’s great uncle, an honorary trustee at the Brookings Institution (think tank), a director at the American Friends of Bilderberg (think tank), a senior counsel for Akin, Gump, Strauss, Hauer & Feld, LLP, and a 2008 Bilderberg conference participant (think tank).

Akin, Gump, Strauss, Hauer & Feld, LLP was a lobby firm for Johnson & Johnson, the Monsanto Company, the Pharmaceutical Research and Manufacturers of America “Big Pharma”, and is the lobby firm for Pfizer Inc.

Colleen A. Goggins was a worldwide chairman, consumer group for Johnson & Johnson, a board member for the CDC Foundation, and a director at Valeant Pharmaceuticals International.