Over at Forbes, John Osborne adds some details to what has been apparent for some time now: the drug industry seems to have no particular friends inside the Obama administration:
Earlier this year I listened as a recently departed Obama administration official held forth on the industry and its rather desultory reputation. . .the substance of the remarks, and the apparent candor with which they were delivered, remain fresh in my mind, not least because of the important policy implications that the comments reflect.
. . .In part, there’s a lingering misimpression as to how new medicines are developed. While the NIH and its university research grantees make extraordinary discoveries, it is left to for-profit pharmaceutical and biotechnology companies to conduct the necessary large scale clinical studies and obtain regulatory approval prior to commercialization. Compare the respective annual spending totals: the NIH budget is around $30 billion, and the industry spends nearly double that amount. While the administration has great affection for universities, non-profit patient groups and government researchers (and it was admirably critical of the sequester’s meat cleaver impact on government sponsored research programs), it does not credit the essential role of industry in bringing discoveries from the bench to the bedside.
Terrific. I have to keep reminding myself how puzzled I was when I first came across the “NIH and universities discover all the drugs” mindset, but repeated exposures to it over the last few years have bred antibodies. If anyone from the administration would like to hear what someone who is not a lobbyist, not a CEO, not running for office, and has actually done this sort of work has to say about the topic, well, there are plenty of posts on this blog to refer to (and the comments sections to them are quite lively, too). In fact, I think I’ll go ahead and link to a whole lineup of them – that way, when the topic comes up again, and it will, I can just send everyone here:
August 2012: A Quick Tour Through Drug Development Reality
May 2011: Maybe It Really Is That Hard?
March 2011: The NIH Goes For the Gusto
Feb 2011: The NIH’s New Drug Discovery Center: Heading Into the Swamp?
Nov 2010: Where Drugs Come From: The Numbers
August 2009: Just Give It to NIH
August 2009: Wasted Money, Wasted Time?
July 2009: Where Drugs Come From, and How. Once More, With A Roll of the Eyes
May 2009: The NIH Takes the Plunge
Sep 2007: Drugs From Where?
November 2005: University of Drug Discovery?
October 2005: The Great Divide
September 2004: The NIH in the Clinic
September 2004: One More On Basic Research and the Clinic
September 2004: A Real-World Can O’ Worms
September 2004: How Much Basic Research?
September 2004: How It Really Works
There we go – hours of reading, and all in the service of adding some reality to what is often a discussion full of unicorn burgers. Back to Osborne’s piece, though – he goes on to make the point that one of the other sources of trouble with the administration is that the drug industry has continued to be profitable during the economic downturn, which apparently has engendered some suspicion.
And now for some 100-proof politics. The last of Osborne’s contentions is that the administration (and many legislators as well) see the Medicare Part D prescription drug benefit as a huge windfall for the industry, and one that should be rolled back via a rebate program, setting prices back to what gets paid out under the Medicaid program instead. Ah, but opinions differ on this:
It’s useful to recall that former Louisiana Congressman and then PhRMA head Billy Tauzin negotiated with the White House in 2009 on behalf of the industry over this very question. Under the resulting deal, the industry agreed to support passage of the ACA and to make certain payments in the form of rebates and fees that amounted to approximately $80 billion over ten years; in exchange the administration agreed to resist those in Congress who pressed for more concessions from the drug companies or wanted to impose government price setting. . .
Tauzin’s role, and the deal that he helped cut, have not been without controversy. I’ve always been worried about deals like this being subject to re-negotiations whenever it seems convenient, and those worries are not irrational, either:
. . .The White House believes that the industry would willingly (graciously? enthusiastically?) accept a new Part D outpatient drug rebate. Wow. The former official noted that the Simpson-Bowles deficit reduction panel recommended it, and its report was favorably endorsed by no less than House Speaker Boehner. Apparently, it is inconceivable to the White House that Boehner’s endorsement of the Simpson-Bowles platform would have occurred without the industry’s approval. Wow, again. That may be a perfectly logical assumption, but the other industry representatives within earshot never imagined that they had endorsed any such thing. No, it’s clear they have been under the (naïve) impression that the aforementioned $80 billion “contribution” was a very substantial sum in support of patients and the government treasury – and offered in a spirit of cooperation in recognition of the prospective benefits to industry of the expanded coverage that lies at the heart of Obamacare. With that said, the realization that this may be just the first of several installment payments left my colleagues in stunned silence; some mouths were visibly agape.
This topic came up late last year around here as well. And it’ll come up again.