Drug Industry Mounts Defense of Pricing

 A TV ad in opposition to Proposition 61, a ballot proposal in California aimed at restricting drug prices.ENLARGE
A TV ad in opposition to Proposition 61, a ballot proposal in California aimed at restricting drug prices. PHOTO: NO TO PROPOSITION 61 CAMPAIGN

The pharmaceutical industry is spending millions of dollars to fight groups advocating lower drug costs, as criticism of high prices mounts.

Drug companies have long lobbied to protect their interests, but the industry-funded push is “more extensive this time,” said K.J. Hertz, a legislative representative for senior-citizen advocacy group AARP, which supports reining in drug prices.

In some cases, self-described patient advocacy groups receiving industry funding are speaking out against efforts to curb drug spending.

Rick Claypool, research director for the Washington nonprofit Public Citizen, a frequent critic of the drug industry, called the involvement of industry-funded patient groups a conflict of interest. “It should be understood that they have this relationship which should give them the incentive to take the industry side,” he said.

The industry is also financing a $109 million offensive against a closely watched California ballot proposal in the Nov. 8 election that would require state agencies to pay the same discounted prices for drugs as the U.S. Department of Veterans Affairs.

The industry lobbying group Pharmaceutical Research and Manufacturers of America recently raised dues from its member companies for 2017, to help fund efforts including defending its positions on the cost of medicines, a spokeswoman said, though she declined to say by how much. PhRMA raised more than $200 million in dues in 2014, according to a tax filing for the most recent year available.

One of the biggest targets of the criticism from the drug industry and patient groups is the Institute for Clinical and Economic Review, or ICER, a Boston nonprofit that analyzes drug costs and sometimes concludes medicines are overpriced—research that some insurers are using to bargain with drugmakers.

Drugmakers and their lobbying group say market competition is driving down the cost of medicines for many diseases, and that government pricing measures—such as the California ballot measure—could backfire. They also say ICER’s research undervalues the benefits of drugs, and could lead to insurance restrictions.


“We think ICER’s approach has some significant flaws,” Eli Lilly CEO John Lechleiter said in an interview. “We understand we need to prove the value of our drugs. We don’t believe the approach ICER is taking should be the final word on what constitutes value.”

In June, an industry-funded group called Patients Rising started a website called “ICER Watch” to challenge ICER reports, with posts like “Cost-Cutting Proposals Could Cost Life Spans.”

In May, two days before a planned ICER meeting in St. Louis to review new multiple-myeloma drugs, Patients Rising founder Jonathan Wilcox held a news conference at a St. Louis hotel to air his concerns about the group. He also attended the ICER meeting, and criticized the group’s findings during a public-comment session. “Has this think tank stopped thinking?” he asked.

Mr. Wilcox, a corporate-communications consultant and former political speechwriter, co-founded Patients Rising in Washington last year, and says it receives financial support from PhRMA and drugmakers Amgen Inc. and Celgene Corp. Mr. Wilcox said the group aims to help patients obtain medications. His wife, Terry Wilcox, also a co-founder of Patients Rising, said that “supporters do not dictate our positions or programs.”

A Celgene spokesman said the company supports Patients Rising and other groups because they promote patients’ access to medicines. An Amgen spokeswoman said the company provides grants and donations to groups that help make the patient’s voice heard. A PhRMA spokeswoman said the group has engaged with Patients Rising to hear its perspective on various issues. She said PhRMA “does not determine the advocacy agenda for patient organizations.”

Also criticizing ICER at the Patients Rising press conference was Robert Goldberg, co-founder of Center for Medicine in the Public Interest, a New York nonprofit that receives funding from the pharmaceutical industry. Pfizer Inc. gave the group $105,000 last year and $15,000 in the first quarter of 2016, according to Pfizer disclosures. PhRMA provided $75,000 to the group in each of 2013 and 2014, according to PhRMA filings with the Internal Revenue Service. Contribution data from more recent years isn’t publicly available. Mr. Goldberg said the funding was unrestricted. A Pfizer spokeswoman said the company’s funding of Center for Medicine in the Public Interest is for work on health policy issues including innovation and patients’ access to medicines.

Mr. Goldberg later emailed a member of the ICER advisory committee, Ryan Barker, who had voted that the new multiple-myeloma drugs weren’t cost-effective. Mr. Goldberg wrote: “So if it’s your kids dying of myeloma, I expect you [to] reject using…any drug that doesn’t have the evidence you needed to vote yes on net health benefit.”

Mr. Barker, a health policy expert, said in an interview he viewed the email as “a personal attack against my family.” Mr. Goldberg said people judging the value of drugs should live by their decisions.

Steven Pearson, founder and president of ICER and a lecturer at Harvard Medical School, says ICER is “seeing groups that are funded by pharma who are more vocal in criticizing us.”


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Another fight is targeting an Obama administration proposal that would curb Medicare spending by reducing doctors’ financial incentives to administer more expensive drugs.

A Washington-based group called the Partnership to Improve Patient Care, or PIPC, was among those sending letters to the Medicare agency this year objecting to the proposal. The group says its mission is to promote a “patient-centered health system.” Its steering committee includes PhRMA and another industry group, the Biotechnology Innovation Organization. PIPC receives financial or in-kind support, or both, from steering committee members, said its chairman, Tony Coelho. He declined to say how much.

PIPC’s campaign includes an online tool people can use to send pre-written emails to members of Congress opposing the Medicare proposal.


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