FDA – R&R – Reachout and Rebuild

Exclusive: White House Task Force Echoes Pharma Proposals

David Posnett — Tue, 20 Jun 2017 21:02:36 +0000

KAISER HEALTH FOUNDATION

By Emily Kopp June 16, 2017

President Donald Trump speaks during an event in the Roosevelt Room of the White House. (Jabin Botsford/The Washington Post via Getty Images)

President Donald Trump repeatedly talks tough about reining in the pharmaceutical industry, but his administration’s efforts to lower drug prices are shrouded in secrecy.

Senior administrative officials met Friday to discuss an executive order on the cost of pharmaceuticals, a roundtable informed by Trump’s “Drug Pricing and Innovation Working Group.” Kaiser Health News examined documents that shed light on the workings of this working group.

The documents reveal behind-the-scenes discussions influenced by the pharmaceutical industry. Joe Grogan, associate director of health programs for the Office of Management and Budget (OMB), has led the group. Until March, Grogan served as a lobbyist for Gilead Sciences, the pharmaceutical company that priced its hepatitis C drugs at $1,000 per pill.

To solve the crisis of high drug prices, the group discussed strengthening the monopoly rights of pharmaceuticals overseas, ending discounts for low-income hospitals and accelerating drug approvals by the Food and Drug Administration. The White House declined to comment on the working group.

The group initially met May 4 in the Eisenhower Executive Office Building and has since met every two weeks. In addition to OMB, the working group includes officials from the White House National Economic Council, Domestic Policy Council, Health and Human Services, the FDA, the Federal Trade Commission, the Department of Commerce, the Office of the U.S. Trade Representative and the Department of Justice.

According to the documents — the latest of which is dated June 1— the working group focused on the following “principles” and “talking points”:

Extending the patent life of drugs in foreign markets to “provide for protection and enforcement of intellectual property rights.” This will ensure “that American consumers do not unfairly subsidize research and development for people throughout the globe.”

Extending monopoly protections for drugs overseas has been one of the pharmaceutical industry’s top priorities since the Trans-Pacific Partnership was defeated last year.

That policy would push up global drug prices, according to Médecins Sans Frontières.

Promoting competition in the U.S. drug market — both by “modernizing our regulatory and reimbursement systems” and limiting “barrier to entry, including the cost of research and development,” according to the documents.

The working group also discussed two broad policy ideas that have been championed by the pharmaceutical industry, according to sources familiar with the process:

Value-based pricing, when pharmaceutical companies keep the list prices of drugs unchanged but offer rebates if patients don’t improve. It’s unclear who would audit the effectiveness of the drugs, what criteria they would use to evaluate them and who would receive the rebates. Grogan invited Robert Shapiro — an adviser for Gilead and former secretary of Commerce under President Bill Clinton — to brief the working group on value-based pricing on May 18. Shapiro is the chairman and co-founder of Sonecon LLC, a Washington, D.C., firm that consulted with Gilead, Amgen and PhRMA, according to his curriculum vitae.

Grogan and Shapiro also discussed issuing 10-year U.S. Treasury bonds to drug manufacturers to pay for expensive, hepatitis C drugs like Sovaldi and Harvoni under Medicare and Medicaid, to avoid rationing drugs to the sickest patients. The 2015 Senate investigation, for example, found that though Medicaid spent more than $1 billion on Sovaldi, just 2.4 percent of Medicaid patients with hepatitis C were treated.

After the working group’s first meeting on May 4, Grogan distributed detailed policy recommendations on expediting generic drug approvals, creating a new tax credit “of up to 50 percent” for investments in generic drug manufacturing, distribution and research and development. The documents also propose scaling back the 340B program, which requires drug manufacturers to provide some medicines at a discount to hospitals that treat low-income patients.

Most of these policies would not ease patient costs, and at least one would increase prices, say experts who reviewed the documents at the request of Kaiser Health News.

“This six-page document contains the kind of solutions to the cost-of-drugs problem that you would get if you gathered together all the executives of pharma and asked them ‘What sort of token gestures can we do?’ ” said Vinay Prasad, a professor of medicine at Oregon Health and Sciences University who studies the costs of cancer drugs.

The pharma-friendly recommendations appear to clash with earlier press reports indicating that OMB Director Mick Mulvaney was considering requiring drugmakers to pay rebates to Medicare patients, a measure the pharmaceutical lobby fiercely opposes.

Brand-name drug prices — which account for 72 percent of drug spending — go untouched in the handouts, said Fiona Scott Morton, a Yale economics professor and former attorney with the Justice Department’s antitrust division.

“The changes to generic markets to promote competition look helpful, but there need to be some more ideas to create more competition for branded drugs or consumers aren’t really going to notice this,” Scott Morton said.

Some of the text in the document is cribbed directly from policy papers published by the pharmaceutical industry’s powerful lobby — Pharmaceutical Research and Manufacturers Association (PhRMA).

Under the subtitle, “Encourage Use of 21st Century Tools for Drug Evaluation, Review and Approval,” one handout proposes the FDA use less rigorous clinical trial standards to speed drug approvals.

The handout cites a PhRMA paper from March 2016 that includes an identical subtitle, “Encourage Use of 21st Century Tools for Drug Evaluation, Review and Approval,” and recommends the FDA implement less rigorous clinical trial standards.

These recommendations would not lower drug prices, experts say.

Such measures “would be like a firefighter spraying gasoline on your burning garage,” Prasad said.

Another section — which recommends giving the FDA more discretion to evaluate generic copies of complex drugs — closely resembles a National Law Review article written by two lobbyists in the pharmaceutical division of Foley & Lardner, whose clients include generic drugmakers.

The handouts further recommend allowing drugmakers to supply data and off-label information to insurers and pharmacy benefit managers during the clinical trial period, before they secure FDA approval.

That’s a “terrible idea,” said Jerry Avorn, a professor at Harvard Medical School and the chief of the Division of Pharmacoepidemiology and Pharmacoeconomics at Brigham and Women’s Hospital. “That’s why we have the whole approval process, to determine what’s actually true,” he said.

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

Kaiser Health News, a nonprofit health newsroom whose stories appear in news outlets nationwide, is an editorially independent part of the Kaiser Family Foundation.

Descent Into Secrecy: Senate Health Talks Speak To Steady Retreat From Transparency

David Posnett — Mon, 19 Jun 2017 21:16:31 +0000

Kaiser Health News

REPEAL & REPLACE WATCH

By Julie RovnerJune 14, 2017

(Photo courtesy of the Office of the Architect of the Capitol)

Congress struggling to finish a huge budget reconciliation bill. A GOP president pushing a major overhaul of federal payments for health insurance that could transform the lives of sick patients.

Sound familiar? The year was 1986. I was a rookie health reporter on Capitol Hill and watched a Medicare bill move from introduction, to hearings, to votes in subcommittees, to full committees and then to the entire House — an operation that took months and was replicated in the Senate, before the two chambers got together to iron out their differences for final passage. Everything was published in the official Congressional Record in almost excruciating detail for everyone to see — as long as they could read really tiny type.

Since then, in three decades of reporting, I’ve had a front-row seat to Congress’ slow, stuttering retreat from such step-by-step transparency, a process known as “regular order.”

It has now culminated in the Senate GOP leadership’s top-secret process to try to write a health bill that could change the formula for nearly one-fifth of the nation’s economy, with a vote they want to cast by July 4. In fact, a GOP Senate aide told the news site Axioson Monday that no details would be forthcoming until the bill is finished, adding, “We aren’t stupid.” That means bypassing the debate that traditionally went into lawmaking, in order to achieve consensus.

The extreme secrecy is a situation without precedent, at least in creating health law. Still, it’s not hard to see how we got here — and there is plenty of bipartisan blame to go around.

Since 1986, I have chronicled the passage (and repeal) of the Medicare Catastrophic Coverage Act, the fight over President Bill Clinton’s health proposal, passage of the Medicare prescription drug bill and passage of the Affordable Care Act, in addition to a dozen budget reconciliation measures that altered health care, often in fundamental ways.

Despite promises from incoming Democratic and Republican leaders over the past decade to restore a time-honored process, regular order has not returned. In fact, not only has it become increasingly rare, but the legislative process itself has become ever-more truncated, with Congress skipping steps it deemed inconvenient to partisan ends, particularly as leaders have “end run” the committees that are supposed to do the lion’s share of legislative work.

So long as there is bipartisan agreement, regular order can still prevail. A major bill completed in 2015 to reconfigure how Medicare pays doctors was the product of 15 months of work by Democrats and Republicans in the House and Senate, and passed three committees in open session by unanimous roll call votes.
But it has become progressively — and distressingly — more acceptable to set transparency aside in lawmaking over the years.

In the 1980s, Rep. Bill Natcher (D-Ky.) routinely closed the subcommittee markup of the spending bill to fund the Departments of Labor, Health and Human Services, and Education, even when there was no particular controversy to avoid. Reporters got to see the bill for the first time at the full Appropriations Committee markup.

Markups at the House Ways and Means Committee under Chairman Dan Rostenkowski (D-Ill.) also were frequently closed to the press and public, mostly for tax bills. Still, once I personally held up a health subcommittee markup for nearly a half-hour because the vote to close the session required a majority of members present. I refused to leave until a couple of committee members could be located and brought to the room to vote in person and kick me out.

Even meetings open to the press were sometimes less than revealing. In House-Senate conference meetings, members would frequently refer to what they were talking about using numbers on notes that were not shared with the audience, including reporters. So they basically spoke in code, and if you didn’t have the key you were just out of luck.

Of course, today there are fewer and fewer formal conference committees, places the two sides hammer out their differences in the public eye. Often the final versions of contentious bills are worked out behind closed doors, often without all of the members of the conference committee. In 2003, House Ways and Means Committee Chairman Bill Thomas (R-Calif.) retreated with all the Republican conferees and two of seven Democrats into his Capitol hideaway office in a group he called “the coalition of the willing.” They wrote the final bill in secret while reporters and lobbyists stood outside in the hall for weeks on end. (Sitting in the Capitol is considered civil disobedience and is strictly forbidden.) We were there so long and got to know one another so well that on my birthday someone got all the conferees in the room to sign a birthday card for me.

The final version of that bill was the one that passed the House in the dead of night – Republicans purposely scheduled the vote to begin at 1 a.m. (on the theory it would be easier to get wavering members to vote yes if only to go home to bed). The vote didn’t end until nearly 6 a.m., after President George W. Bush reportedly got the last few members to switch, via phone calls.

In 2009, creation of the Affordable Care Act was both open and closed. There were hundreds of hearings and markups that lasted days, or, in the case of the Senate Health, Education, Labor and Pensions Committee, months. But the unsuccessful effort by Senate Finance Committee Chairman Max Baucus (D-Mont.) to bring Republicans into the fold consisted of weeks of closed-door discussions, and the Senate bill that would ultimately become the foundation of the ACA was written in Senate Majority Leader Harry Reid’s office before being debated on the Senate floor for almost a month.

We got a sneak preview of how the GOP might shepherd its health bill through in 2015, when Republicans — who by then controlled Congress — orchestrated a “dress rehearsal” ACA repeal bill that was vetoed (as they knew it would be) by President Barack Obama. The bill was prewritten by leadership, approved by the relevant House committees, passed by the House and sent to the Senate. The Senate passed it with small changes (and without committee consideration). Rather than having a conference, the amended Senate bill was then simply approved by the House and sent to Obama for his veto.

That secretive process is being reiterated now. Only this time a Republican, Donald Trump, is president and the potential for change is real. People are outraged over the lack of transparency and the loss of regular order. But both Democrats and Republicans have laid the track on which this train is rolling.

Kaiser Health News, a nonprofit health newsroom whose stories appear in news outlets nationwide, is an editorially independent part of the Kaiser Family Foundation.

Tom Price Bought Drug Stocks. Then He Pushed Pharma’s Agenda in Australia.

David Posnett — Thu, 01 Jun 2017 21:26:12 +0000

Before he was named Trump’s health secretary, Price took a congressional trip to Australia and pressed officials to extend protections for drug companies in an international trade agreement.

by Robert Faturechi
ProPublica, June 1, 2017, 8 a.m.

In the spring before the 2016 presidential election, the Obama administration’s 12-nation trade agreement known as the Trans-Pacific Partnership, or TPP, was still alive. Negotiators worked on details as Congress considered whether to ratify the pact.

The Australian government was getting in the way of one change demanded by U.S. pharmaceutical companies. Makers of cutting-edge biological drugs wanted to have data from their clinical trials protected from competitors for 12 years, as they are under U.S. law — not the roughly five years permitted under the TPP. Australian officials insisted that an extension would deprive consumers of cheaper alternatives for too long.

On April 5, 2016, a bipartisan group of U.S. lawmakers arrived in Canberra, Australia’s capital, for meetings with government officials on a broad range of subjects. Among those on the routine congressional trip was Rep. Tom Price, a Georgia Republican who would go on to become President Trump’s secretary of health and human services. Three weeks before the trip, Price had purchased up to $90,000 worth of pharmaceutical stocks — trades that would come under scrutiny after his nomination to Trump’s cabinet.

In Canberra, Price and another Republican, Rep. John Kline of Minnesota, pressured senior Australian trade officials to modify their position on the 12-year extension, according to a congressional aide who was on the trip. The Australians explained that they had no intention of changing their laws or rules in ways that could increase drug prices. Price and Kline continued pushing, according to the aide, asking for a side letter or other written guidance that the period would be extended in Australia even if it weren’t spelled out in the TPP itself.

Price’s lobbying abroad, which has not previously been reported, is another example of how his work in Congress could have benefitted his investment portfolio. He traded hundreds of thousands of dollars’ worth of shares in health-related companies while taking action on legislation and regulations affecting the industry. ProPublica previously reported that Price’s stock trades are said to be under investigation by federal prosecutors.

Price, who did not respond to an interview request for this story, has said he did nothing wrong, that his broker generally chose stocks without his knowledge and that all of his trades were publicly disclosed.

Price’s financial disclosures submitted to the House Office of the Clerk show that on March 17, 2016, he purchased shares worth between $1,000 and $15,000 each in Eli Lilly, Amgen, Bristol-Meyers Squibb, McKesson, Pfizer and Biogen. All six companies had an interest in biological drugs, which are grown from live cells and are known for short as biologics. Eli Lilly, for example, is behind Portrazza, the first biologic approved to treat a common type of lung cancer. Amgen makes a top-seller for rheumatoid arthritis and psoriasis. Biogen developed a biologic for people suffering multiple sclerosis relapses.

Kline, who has since retired from Congress, said he could not recall if he or anyone else raised the biologics issue. His financial disclosures do not show direct holdings in pharmaceutical companies.

Australia has played another role in Price’s financial activities. In 2015 the congressman bought about $10,000 worth of shares in Innate Immunotherapeutics, a small biologics firm with an office in Sydney. After the congressional trip, which also made a stop in Sydney, Price purchased a larger stake in the company, about $84,000 worth, in two private placements, the first of which was announced in June. Price was invited to purchase the shares at a discounted rate.

It’s not known if Price had any contact with the firm while in Sydney. Price didn’t respond to questions about when and where he discussed the discounted offering with company officials. The company’s officials also did not respond.

Traveling congressional delegations typically meet with a variety of local officials, and at the time of the visit to Australia it wasn’t unusual for Republican lawmakers to side with the pharmaceutical industry on the trade deal’s protections for biologics. Price’s advocacy stands out because he pushed the cause directly with foreign officials, while at the same time owning stakes in companies that could have benefited.

An itinerary for the trip reviewed by ProPublica mentions TPP in relation to one of the meetings, but does not list the biologics provision. A former Australian trade official, who asked not to be named and attended one of the meetings, confirmed that the 12-year lockup was addressed, but said he could not recall which Congress members were pushing it.

Others on the trip, organized by the House’s Education and the Workforce Committee, were Robert Scott, D-Va., Ruben Hinojosa, D-Texas, Erik Paulsen, R-Minn. and Dan Benishek, R-Mich. Those members who responded to requests for comment said they could not recall whether the provision was discussed.

The data collected during clinical trials of drugs can save competitors time in developing the cheaper alternatives to biologics known as biosimilars. Keeping the data proprietary longer extends the original drugmaker’s monopoly. While some big brand-name pharmaceutical companies also make biosimilars, they and their trade association — the Pharmaceutical Research and Manufacturers of America — advocated strongly for longer exclusivity.

In the end, the debate over the provision became moot. Trump scrapped the TPP days after taking office. Price divested his drug stocks upon taking the cabinet post. His investment in Innate Immunotherapeutics yielded a profit of at least $150,000.