Hillary & Trump: Who's better/worse for affordable drug prices?
Philadelphia tort attorney Stephen Sheller argues in his new book that the 2000 election of George W. Bush brought about what he calls "Pharmageddon," in which pharmaceutical industry CEOs "were permitted to buy elections, purchase state legislatures, appoint judges, and write laws to benefit themselves."
Sheller details how both Bush presidents, several of their cabinet members and other appointees acquired stock in Eli Lilly and, in various ways, "were beholden to the industry."
Although Sheller makes a compelling case, the pharmaceutical industry has paid politicians to rig the system in its favor long before 2000. The industry's corrupting influence goes back to at least the 1950s. Under Senator Estes Kefauver, the U.S. Senate Antitrust and Monopoly Subcommittee investigated economic concentration across the U.S. economy and found monopoly pricing in pharmaceuticals and several other sectors. In May 1963 the Subcommittee issued a major report that was highly critical of what it termed pharma's "excess profits."
The Kefauver committee started its inquiry into the pharmaceutical industry in 1959 and within a year or two, Congress was aware that the eventual report would expose legislative subservience to the drug industry. To preempt some of the damage, Congress passed the Kefauver-Harris Drug Control Act of 1962, requiring drug companies to prove efficacy and safety (including disclosing side-effects) for receiving FDA approval. The law also created a path for approving generic versions of drug compounds.
So the political fix favoring pharma existed long before the Bushes and politicians of both major parties have eagerly played that rigged game. Just this month, for example, Pfizer's CEO, Ian Read, told attendees at a Sanford Bernstein investors conference that he doesn't see much difference between the policies of Hillary Clinton and Donald Trump as far as helping or harming pharma.
Although Hillary voiced support for giving Medicare the authority to negotiate drug prices, Trump has also supported the idea. On the other hand, both candidates have taken positions to support pharma's profiteering at the expense of U.S. consumers and taxpayers. As noted by journalist Lee Fang, when Hillary was a Senator she supported legislation that extended exclusivity for biological drugs to twelve years, "making it harder to bring cheaper generic drugs to market." Then last fall, as a candidate, she favored a contrary position that would end exclusivity after seven years.
"Trump's health care policy plan," according to Fang, "includes an idea to turn Medicaid into a block grant, meaning states may shift money allocated for health care to other priorities."
In one of her televised debates with Bernie Sanders, Hillary dismissed the idea that huge donations from Wall Street and the drug companies influence her policy positions. An example of her disingenuousness emerged last week.
Going back over a period of four years, Novartis and the Colombian government have been jousting over the cost of Gleevec, a leukemia medication. Price controls in the South American nation have lowered the drug's price to a fraction of its U.S. cost, but it still remains approximately 172 percent higher than comparable medicines in Colombia and almost double that country's per capita, gross national income.
With Novartis adamantly refusing to lower the Gleevec price, Colombia's health minister threatened to issue a compulsory license, that is, break the patent.
When negotiations reached a standoff, some observers wondered what America's "health care president," Barack Obama was going to do. The president lived down to expectations when he sent staffers from the US Trade Representative's office to the Colombian embassy in Washington DC. They threatened that the U.S. would withdraw its support for a free trade agreement involving Colombia and also withhold $450 million of American funding to enhance a peace initiative between that government and Marxist rebels there.
Why would the U.S. president try to strongarm a foreign nation on behalf of a pharma company that is not even based in this country? The chief international trade counsel for the Senate Finance Committee stated that "the US pharmaceutical industry is very worried by the fact that such a case might become a precedent" that would embolden other countries to exert compulsory licensing.
But such an explanation is just lawyer's sophistry. The fact is that Obama cut a deal with pharma's lobby, the PhRMA, in 2009 so they wouldn't run George-and-Martha television ads against his pending legislation for the Affordable Care Act. At the time he feared that such an ad blitz would doom the legislation the way pharma sank the Hillarycare proposal in 1993-94. The Obama administration's current effort to muscle Colombia is part of the quid pro quo he promised pharma for their acquiescence on the ACA.
So contrary to Hillary's shrug about donations not influencing policies, it matters who gives money to presidential candidates and it's also important to uncover the kinds of deals the candidates make with those donors in return for the contributions.
Is there much room to choose between Hillary and Trump when it comes to taking up the interests of the American public on drug prices? Pfizer's CEO Read has carefully examined their policies with an investor's eye and his subordinates have spoken with representatives of both campaigns at length. As noted above, he doesn't see much difference and, frankly, he doesn't really think either one offers much reason for him to worry.
Odd as it may appear, we agree with Mr. Read on this one.
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