Revisiting PhRMA’s drug-pricing pitch to Trump

Oct 29, 2024

Driving The Day

Former President Donald J. Trump walking up stairs to the stage at his rally at Madison Square Garden.

A 2017 document reveals PhRMA's five-point plan to influence former President Donald Trump's drug pricing policies during his early days in the White House. | Angelina Katsanis/POLITICO

PhRMA’S 2017 WISH LIST FOR TRUMP — Could the past be prologue if former President Donald Trump wins the 2024 election? Shortly after taking office in January 2017, Trump had a “follow-up assignment” for drugmaker lobby PhRMA after his initial meeting with industry CEOs: Come up with a plan to address prescription drug costs.

The group’s five-point plan provides a window into how drugmakers hoped to influence Trump — who initially backed Medicare negotiations on the campaign trail in 2016 — during the early days of his term in the White House.

PhRMA did not respond to requests for comment.

Trump campaign spokesperson Karoline Leavitt said the former president “is extremely aware” of the “high price of healthcare and insurance.”

“By increasing transparency, promoting choice and competition and expanding access to new affordable healthcare and insurance options, President Trump will make healthcare affordable again,” Leavitt said.

Two of the five asks remain top priorities for the drug industry today: targeting the scope of pharmacy benefit managers’ role in drug pricing and whether a program intended to help hospitals provide drugs to low-income patients that the industry argues has outgrown its initial scope.

The five points the industry wanted to present to Trump officials:

— “Value Based Contracting — FDA piece is around communications”

— “Promote Generic Entry — mostly FDA”

— “Improved Trade Agreements”

— “Regulatory Relief — Some FDA, but a lot of 340b”

— “Middlemen Share the Savings— CMS”

That’s according to an email — obtained by consumer advocacy group Public Citizen via the Freedom of Information Act and shared with POLITICO — sent by then-PhRMA deputy vice president Alicia Hennie to Anna Abram, who was a special assistant at HHS during the early months of the Trump administration.

Peter Maybarduk, director of Public Citizen’s access to medicines group, claims that PhRMA’s five priorities were echoed in a draft executive order that leaked later that year and was subsequently criticized for being too friendly to the pharmaceutical industry.

“Comparing PhRMA’s message to Trump’s draft order suggests to us that the former president made PhRMA’s wish list the core of his drug-pricing plans,” Maybarduk said.

But Joe Grogan — who worked in Trump’s Office of Management and Budget as an associate director of health programs at the time and met with PhRMA in 2017 about the plan — pushed back against that characterization.

“I met with everybody: people who hated PhRMA, people like PhRMA, BIO, individual companies, patient groups,” Grogran said. “Nothing in the list is particularly shocking, and it’s my read that PhRMA only got two of the five, and [generic competition and value-based contracting] shouldn’t be controversial at all.”

IT’S TUESDAY. WELCOME BACK TO PRESCRIPTION PULSE. One of your authors is not sure what to make of “Megalopolis” after a weekend hate-watch.

Send tips to David Lim (dlim@politico.com or @davidalim) and Lauren Gardner (lgardner@politico.com or @Gardner_LM).

In the Courts

An employee fills blister packs with capsules.

Three drugmakers are heading to court to take a legal stand against the Medicare drug pricing negotiation program. | Jean-Christophe Verhaegan/AFP/Getty Images

DRUGMAKERS’ IRA APPEALS DEBUT — On Wednesday, three pharma companies will present their first appellate-level challenges to the Inflation Reduction Act's drug price negotiation program, claiming that it violates a handful of constitutional tenets.

AstraZeneca, Bristol Myers Squibb and Janssen have had their claims consolidated into one oral argument at the 3rd Circuit Court of Appeals in Philadelphia. AstraZeneca lost its initial challenge in the U.S. District Court in Delaware, while a New Jersey district court judge rejected suits from BMS and Janssen — a Johnson & Johnson subsidiary now known as Johnson & Johnson Innovative Medicine.

In both courts, the judges ruled that Medicare is a voluntary program and the negotiations don’t force companies to participate.

The 5th Circuit sided with PhRMA in a September opinion, but that decision focused on the group’s standing to sue in Texas instead of on the case’s merits.

Argument recap: Each company makes various constitutional arguments against the program, which gives Medicare the power to negotiate prices with drugmakers for a certain number of drugs each year.

AstraZeneca’s lawsuit focuses on alleged violations of the Administrative Procedures Act, arguing that CMS’ implementation guidance flouts the law by defining a “qualifying single source drug” to cover all dosage forms and strengths of a drug marketed with the same active ingredient. It also argues the law violates the due process clause of the Fifth Amendment.

Meanwhile, BMS’ arguments center on alleged violations of the First Amendment’s free speech protections and the Fifth Amendment’s takings clause, which requires the federal government to pay fair compensation when taking private property for public gain. Janssen makes similar claims.

The three-judge panel hearing the arguments includes judges Thomas Hardiman, a George W. Bush appointee; Peter Phipps, a Trump appointee; and Arianna Freeman, who was nominated by President Joe Biden.

Novartis and Novo Nordisk have separately appealed their district court losses to the 3rd Circuit, where briefing is ongoing.

A Novo spokesperson had no additional comment. A Novartis spokesperson said the company believes the program “will have long-lasting negative consequences for patients by limiting access to medicines now and in the future.”

AROUND THE AGENCIES

TARGETING KIDS’ CANCER DRUG SHORTAGES — The president’s cancer moonshot initiative said Monday it’s launching a pilot program before the end of the year to “maintain uninterrupted access” to seven pediatric cancer drugs to help mitigate shortages.

“Our goal is to build a collaborative, scalable, and transparent ecosystem that will provide effective treatment and improved care for children and families impacted by cancer,” Danielle Carnival, deputy assistant to the president for the cancer moonshot and deputy director for health outcomes at the Office of Science and Technology Policy, said in a statement. “This new pilot will improve our supply chain, provide more timely and uninterrupted care to children facing cancer, and, ultimately, save lives.”

Program participants will work to identify shortage risks and promote “transparent inventory awareness” to help prevent disruptions in patient care. The pilot will run into 2025, and a coalition of drug companies, supply chain specialists and health systems will publish a report on lessons learned.

BIRD FLU

RESEARCHERS: ISOLATED HUMAN BIRD FLU CAN INFECT ANIMALS — An avian flu virus obtained from an infected dairy worker killed mice and ferrets in a study conducted in a high-containment lab published in Nature on Monday. The farmworker who was infected with the virus did not have severe illness.

The researchers from the University of Wisconsin at Madison, alongside partners from Shizuoka and Tokyo Universities and the Research Center for Global Viral Diseases in Japan, also found that the virus could spread via respiratory droplets between separated ferrets — and that it might be able to bind and replicate in human respiratory tract cells.

They found the virus is vulnerable to antiviral drugs favipiravir and baloxavir marboxil, as well as neuraminidase inhibitor zanamivir, according to the study. But it is less sensitive to a commonly used medicine, Tamiflu.

Pharma Moves

Medtronic appointed Dr. Matthew Kroh as chief medical officer for advanced surgical technologies and general surgical technologies.

Jocelyn Wiles is joining Akin Gump Strauss Hauer & Feld, where she’ll be a senior policy adviser. She previously worked at the Pharmaceutical Care Management Association.

WHAT WE'RE READING

Political candidates up and down the ballot blame fentanyl traffickers for high rates of drug use, focusing more on law enforcement than public health initiatives expanding access to treatment, POLITICO’s Carmen Paun reports.

CMS is prepared to work with either president-elect’s team on the next set of drugs subject to Medicare price negotiations, POLITICO’s Robert King reports.

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