[Ip-health] FT: Clinton promises panel to vet drug price rises
thiru at keionline.org
Sun Sep 4 06:34:00 PDT 2016
Clinton promises panel to vet drug price rises
Group of enforcers would hold industry to account for ‘unjustified’ price
SEPTEMBER 2, 2016
by: Barney Jopson in Washington and David Crow in New York
Hillary Clinton has pledged to create a government panel with far-reaching
powers to punish drug companies for price rises in the wake of a
politically charged backlash over the soaring price of the EpiPen.
The Democratic presidential nominee said she would seek to hold
pharmaceutical companies accountable for “unjustified” price increases by
empowering a group of enforcers to penalise bad actors and make alternative
Mrs Clinton has sought to turn the rising price of prescription drugs into
a campaign issue by channelling popular outrage over sudden increases in
the cost of Mylan’s EpiPen injection for allergy sufferers and an Aids drug
made by Martin Shkreli’s Turing Pharmaceuticals.
Her attacks on drug companies have dismayed some pharmaceutical executives,
who say privately they fear Mrs Clinton has decided to make an example of
their industry in the same way Barack Obama vilified Wall Street banks in
2008 during the financial crisis.
While Mrs Clinton’s ties to Wall Street have complicated her position on
bank regulation, polling suggests she is seeking to reflect shifts in
public opinion as the pharmaceutical industry is now viewed less favourably
than the financial sector.
Mrs Clinton said on Friday: “Over the past year, we’ve seen far too many
examples of drug companies raising prices excessively for longstanding,
life-saving treatments with little or no new innovation or R&D.”
I’m ready to hold drug companies accountable when they try to put profits
ahead of patients, instead of back into research and innovation.”
Promising “aggressive” new enforcement tools, she said that as president
she would create a panel that could impose fines on drug companies while
supporting alternative manufacturers and facilitating emergency imports of
Republicans condemned Mrs Clinton’s proposal as an unnecessary expansion of
Terry Haines, an analyst at Evercore ISI, an investment bank, said: “This
‘citizen panel’ is not something that would survive a bipartisan
legislative process, and anything like this would require Congress to
create it, not Clinton to decree it.”
Mr Haines said he did not believe there would be action on drug pricing
unless it were part of a broader reform of the Affordable Care Act,
President Obama’s signature healthcare overhaul.
According to the Edelman Trust Barometer, an annual survey of business
reputation, the pharmaceutical sector has been less popular than Wall
Street since 2014. Some 47 per cent of Americans said they trusted drug
companies this year while 54 per cent trusted financial services.
Healthcare costs have been rising above inflation for years, eating into
families’ disposable income and fuelling a backlash against drugmakers.
Mylan prompted outrage by raising the price of the EpiPen, an emergency
injection for anaphylactic shock, by almost 500 per cent since 2007 to $600
for a pack of two, resulting in large bills for consumers who have to
contribute to the cost of medicines.
Mrs Clinton took a stand last year against Mr Shkreli, the enfant terrible
of drug making, who became a pariah by raising the price of a Turing
medicine for Aids sufferers by 5,000 per cent overnight. Her campaign has
also released a video targeting Valeant, a Canadian drugmaker that has
gained a reputation for sharp price rises.
Shares in pharmaceutical companies have repeatedly fallen following
political interventions and fell again on Friday. Mylan, which is down by
about a third since Mrs Clinton’s first intervention, dropped a further 3.9
Billy Tauzin, a former Republican congressman and ex-head of a
pharmaceuticals lobby group, said Mrs Clinton’s plan was a bad idea.
“It’s an intervention into the very sensitive nature of what physicians do
for patients. The market is already punishing these companies pretty
heavily. You don’t need a government panel. When they do stupid things like
hike prices by 3 or 4 times, the company gets punished dramatically because
every investor in the company is taking it on the chin,” he said.
“If Hillary gets her way we’ll have more government panels than alternative
Americans are slightly more concerned about the cost of prescription drugs
than Mr Obama’s controversial healthcare reforms, according to polling by
the Kaiser Family Foundation. Their biggest healthcare concern, however, is
the future of the Medicare government health plan for retirees.
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