Pharma Companies Win Case Against Drug Price Transparency
July 14, 2019
One of the Trump administration’s promises leading up to 2020 is to reduce prescription drug prices, but the plan has stalled after a big court loss, and other blows to Trump's grand healthcare plan. Wendell Potter discusses the implications.
JACQUELINE LUQMAN Hi. This is Jacqueline Luqman with The Real News Network.
One of the Trump administration’s key campaign promises leading up to 2020 is to reduce prescription drug prices. The idea is really popular among even GOP voters who are just as opposed to giant pharmaceutical companies price gouging prescription drugs as the progressive left is, but Trump has had some trouble getting his much-touted plans off the ground as of late. And that might be an inroad for the Democrats to seize on in 2020. So joining me now to talk about this is Wendell Potter. Wendell is a former health insurance executive, serving as head of corporate communications for Cigna before leaving in 2008 after a crisis of conscience. And now, he’s a consumer advocate and author. His newest project is Tarbell.org, which examines how money and politics impacts millions of Americans. Wendell, thank you for joining me.
WENDELL POTTER My pleasure, Jacqueline. Thank you.
JACQUELINE LUQMAN So let’s talk about Trump’s plan for transparency in prescription drug pricing because that’s what he called it. What was this plan, and what would it have meant for consumers?
As Churchill once quipped, "Americans always do the right thing after trying everything else." So its is with healthcare and its major felon, the pharmaceutical companies. Eventualy the nation will have a rational and equitable healthcare system, but the delaying tactics of Big Pharma and their corrupt allies on Congress will have exacted unnecesary enormous penury and even death from tens of millions of people. —The editor
WENDELL POTTER Well among the various things that he said he would be doing along the lines of transparency, one was to require drug companies in their TV advertising to list the prices of those medications, and that’s not going to happen. There’s been a ruling that says that drug companies don’t have to do that. It’s not constitutional to require them to do that. And so, it’s not going to happen. It would have been probably meaningless in the first place. I think there’s some merit certainly in us knowing how much drug companies are charging for their medications, but the reality is that we pay varying amounts. There’s no one charge. There might be an ultimate list price for some medications but regardless of—Because so many of us have different kinds of health insurance plans. Some of us have to pay a lot out of our own pockets before our coverage kicks in. Some of us are uninsured. It’s almost a meaningless number anyway, but it’s not going to happen. That’s one thing.
JACQUELINE LUQMAN So basically, this plan that Trump touted that would drive prescription drug prices down—And as a matter of fact, he said, or one of his Health and Human Services Department officials said, that forcing pharmaceuticals to publish their prescription drug prices would shame the pharmaceutical companies into reducing their prices. So you’re saying that wouldn’t have happened, even if this ruling went in Trump’s favor?
WENDELL POTTER Oh, absolutely not. Again, there is merit in transparency and knowing how much they actually are trying to get away with and gouge us. But the reality is, they could have done it in a way that—Say for example, you actually need a medication that’s being advertised, and you want to make sure that you’re presumably getting the best medication that’s available for your treatment. A lot of people would say, well, that one that cost $50,000 is better than the one that cost $20,000. Well, I want that $50,000 drug. So, you know, we just have to keep in mind the psychology of so-called consumers or patients. So I’m not sure it would have had the intended effect. In fact, it could have been counterproductive, to tell you the truth.
JACQUELINE LUQMAN Counterproductive in what way?
WENDELL POTTER In that, they could do the advertising in such a way to say, look, our new drug or this new version of a drug, it may cost a lot of money, but it’s far superior than a competitor or a generic. And so people would probably then go to their doctor and say, look, I want the high-priced Cadillac drug, if you will, because it’s my health and my life’s on the line. So I’m not sure that that would actually serve to bring prices down, and I don’t know that—You know, the drug companies have demonstrated they’re not shamed. They can’t be shamed all that much. We’ve seen them get away. There’s been a lot of publicity about the money that they’re taking in, and the prices they’re charging for drugs that just have no bearing in reality in terms of value. It’s just, they just price them based on what they think the market can bear. So there’s been no shortage of publicity. It’s one of the reasons why Americans are outraged, but that outrage hasn’t translated into any changes in terms of pricing by the big drug companies.
JACQUELINE LUQMAN And, you know, one of the three large pharmaceutical companies put out a statement after this ruling came out in their favor, saying that they were happy with the ruling and that what they were going to do now was to focus on the real problem, which was making sure that American consumers who can’t afford their medications are able to afford their medications. But they said they would do it in a way that sounds interesting to me. They said that they’re going to work with their stakeholders to address this issue. Now, we’re talking about pharmaceutical companies here, Wendell. Who are their stakeholders? And how is the pharmaceutical company working with their stakeholders going to help Americans who can’t afford the prescription drugs able to afford them? That’s confusing to me. Is it a little bit confusing?
WENDELL POTTER No, it is. And as a former corporate executive I can tell you that their number one stakeholder is their shareholder, or their shareholders plural. These companies are in the business to make money. They happen to make medications or drugs— in many cases, lifesaving drugs— but their number one priority is to make money, to enhance shareholder value. So that’s stakeholder number one. Who knows who they really have in mind when they’re talking about stakeholders? The ultimate stakeholder, of course, is the patient. But it also involves employers because many of us get our coverage, our health insurance coverage, through our employers. It includes insurance companies, it includes policy makers, so who knows? It’s just one of those words that really hasn’t a lot of meaning. It just is a nothing statement, a nothing word to use, a word that some politicians have sometimes used that signifies absolutely nothing. It just means that they’ve gotten a bit more time to baffle us with BS.
JACQUELINE LUQMAN [laughs] Now it’s worth noting that among the events of this week that seem to be kind of full of setbacks for the Trump administration in regard to his prescription drug plan that he had pretty laid out with a lot of fanfare, it’s worth noting that the ACA was also in court—Is also in court right now this week as arguments are being heard again as to the constitutionality of the ACA because of the ruling of the unconstitutionality of the individual mandate. So we’re waiting for a ruling on that. We don’t know how long it’s going to take for that ruling to come out.
But also, the Trump administration was pretty much backed into a corner and forced to withdraw their plans for a rule that would end negotiating, or that would end rebates for prescription drugs. And when that rule, or the withdrawal of that rule was announced, health care providers’ stocks skyrocketed in the stock market. What does all this mean for the Trump administration’s prescription drug plan? And what does all this mean for consumers who need these lifesaving drugs, and millions of Americans cannot afford them, and there doesn’t seem to be much relief for them in sight?
WENDELL POTTER What it means is our so-called free market in health care is just completely out of control and pretty much immune to what the Trump administration and Republicans in Congress have come up with as ideas for how to bring prices down. Now there are some bipartisan efforts to try to address prescription drug prices, but the reality is that most of what has been proposed are just completely ineffectual. And what we’re seeing here in this this particular thing is a contest between powerful lobbyists in Washington. On the one hand you’ve got the drug manufacturers. And on the other, you’ve got the insurance industry and this other middleman.
Insurance companies are middlemen, but there’s another one called pharmacy benefit managers that work closely with drug companies and employers to theoretically try to bring the price of medications down. Because they’re middlemen, in many cases, there’s no way of knowing whether they do that at all, or if they’re just adding to the total cost of health care and prescription drugs. But anyhow, at the end of the day, what happened was that the insurance companies and the pharmacy benefit management companies prevail. It was sort of a setback for the drug companies. It’s almost obscure to try to explain exactly what happened to, you know, a regular person because our system is so complicated. But the bottom line is, we’re getting no relief. This is not something that the administration is able to pull off. And so, it’s kind of back to square one.
JACQUELINE LUQMAN So you mentioned the bipartisan legislation that is being introduced or that’s been drafted to address this issue. Is any of that legislation, do you see any of that legislation making headway in this administration? Do you think Trump is more likely now that he’s suffered some setbacks in this area to work more with the Democrats to advance some of that legislation? What do you see happening?
WENDELL POTTER I’m not very optimistic that you’re going to see anything that gets through Congress. I may be wrong, and I hope I am wrong because it is, I guess, conceivable that Republicans and Democrats could agree on something that might be of relief to patients. There is agreement broadly that drug prices are too high and that there should be some bipartisan effort to do that. There have been hearings. There has been agreement among Democrats and Republicans on the broad strokes of legislation, but broad strokes don’t result in actual legislation. You have to have details and the devil is in the details. When you start adding the details, that’s when you start losing support on one side of the aisle or the other, and that’s why I’m a little skeptical.
JACQUELINE LUQMAN So last question, as we wrap this up. Now, Bernie Sanders has been a longtime advocate for addressing or challenging, really holding accountable the big corporate interests, including the pharmaceutical companies in this country. He has been very pointed in saying that he is going to address the prescription drug crisis. He went so far as responding directly to a tweet that President Trump recently tweeted out— probably, you know, during one of his morning tweet storms— saying that, and this was in January, that in 2018, the price of prescription drugs were at their lowest point in 50 years, [laughs] I think he said. And Sanders’s response was pointedly to tell Trump that that’s a lie. Well, to tell his supporters, his followers on Twitter that that’s a lie. And then Sanders went on to say that when we win, we are not going to wait for the pharmaceutical companies to reduce their prices; we’re going to reduce their prices for them. Wendell, how likely is it that Bernie Sanders, or anybody else who is president, is able to get the pharmaceutical companies to reduce their prescription drug prices if it’s been so difficult up to this point?
WENDELL POTTER It’s going to take, kind of, a sea change. Certainly, the current leadership in Washington is not going to make this happen. Bernie Sanders does have some solid and bold ideas. He advocates for moving us to an improved and expanded Medicare program in which all of us would be covered by Medicare, and allowing the Medicare program to actually negotiate with drug companies for lower prices. We should have that. The drug companies and the insurance industry lobbied against that and have successfully kept Medicare from being able to do that. That’s going to change. One reason it’s going to change is that business leaders are beginning to step up to the reality that they’ve been sold a bill of goods by insurance companies and by pharmaceutical companies over many years. So there’s going to be growing support. There is growing support for what Bernie Sanders is advocating, what Congresswoman Pramila Jayapal on the House side is advocating. Which is, expanding the Medicare program to cover all of us and getting that program, which has been around for 50 years, the authority, the ability to really do something to bring costs down.
Every other country in the developed world has a system like what Sanders and Congresswoman Jayapal are advocating. We will get there, but it is going to have to come from government. These companies, these industries are not interested in changing from within. It’s got to be bold change. And that’s going to require Democrats hanging on to control of the House, taking over the Senate and the White House. No easy lift, but that’s what’s going to be required, and I frankly am optimistic it’s going to happen. And I think, as I said earlier, one of the new things I’m doing is leading an effort to bring the business voice into this work. To get business leaders who are already outraged in the game and say, enough is enough. We want the solid kind of change that Senator Sanders and Congressman Jayapal and many others in Congress are advocating.
JACQUELINE LUQMAN Well, this is really an interesting turn of events for the Trump administration in this particular issue with the claims that he is going to reduce prescription drug prices— something that even his base voters desperately want and desperately need. And we will continue to watch how this issue plays out not just for this administration, but for whatever administration we have in 2020. But in the meantime, we have to leave this discussion right here. Thank you so much, Wendell Potter, for joining me today.
WENDELL POTTER My pleasure, Jacqueline. Thank you very much.
JACQUELINE LUQMAN And thank you for watching. This is Jacqueline Luqman with The Real News Network in Baltimore.
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License