Dispatches from the Inquisition

Recently, the New York Times ran an editorial titled, “It’s Time for Pharmaceutical Companies to Have Their Tobacco Moment.” Did the CEOs need a roadmap to know where this is going? Medicines save lives. Tobacco kills. While the headline could be perceived as off-base and objectionable, the prose makes a number of important points that can be summed up in one statement: Pharma has a lot of explaining to do.

In 2014, former Pfizer CEO, Ian Read, wrote:

“I recognize that there are differing views when it comes to society’s perception of the pharmaceutical industry. Many believe we are more focused on making profits rather than finding cures for patients, even though the industry has a long-standing commitment to providing patients access to needed medicines through many different programs globally. There is also a perception that we do not operate in an open and transparent manner when it comes to our clinical data and financial relationships with healthcare providers.”

Today, more than ever it’s time to put up or shut up. Here’s the good news. The recent Senate hearing provided a terrific opportunity to speak truth to power. The day before the hearing, Senator Charles Grassley said:
“I hope that the drug CEOs testifying tomorrow don’t try to blame everyone but themselves or take no responsibility for their role in fixing the problem. We already understand there are other factors to consider. Tomorrow is about the part drug companies can do to lower costs for patients and taxpayers.”
Wise words from a wise man. Merck & Co’s CEO, Ken Frazier, shared Chairman Grassley’s perspective when he said, “Our industry has a duty to be responsible in our pricing practices and contribute to solutions that address the affordability problems facing patients.”

In turned out that those posing the questions during the hearing would be both seeking advice and sharing their own.

There was certainly the expected fair share of "I am Torquemada" moments. Several moments when the committee stated, “Please answer yes or no.” That’s like asking Albert Einstein to explain the Theory of Relativity in a tweet. There was also a lot of repeating the silly shibboleths that the NIH invents almost every important new drug and that pharmaceutical companies spend more on marketing than R&D—both patently proven false. On a positive note, there were many smart and probing questions that lead to important discussions—the most relevant being that every single CEO promised they would pass along rebates to lower patient co-pays if the Safe Harbor for Prescription Benefit Managers (PBMs) was eliminated. That’s precisely what the President and Health and Human Services Secretary, Alex Azar, have proposed.

There were fumbles, traps, and obfuscation but there were also solid policy proposals—or at least the shells of thereof—that should be followed up and developed via collaboration of industry, Congress, government officials, patients, physicians, and a broad swath of the healthcare community.

Pfizer CEO, Albert Bourla, set the tone when he said, “There are two indisputable truths that make this the exact right moment for change: (1) Medicines alleviate human suffering and reduce overall system costs; (2)The horribly misaligned incentives within our healthcare system often prevent medicines from getting into the hands of patients. Our healthcare system is broken, and we need to fix it.”

Dr Bourla’s first recommendation was to pass along all rebates to patients. “Pfizer supports reforms that would create a system in which transparent, upfront discounts benefit patients at the pharmacy counter, rather than a system driven by rebates that are swallowed up by companies in the supply chain.”

He also put the concept of value into a collaborative perspective. “Imagine a system in which hospitals are rewarded for keeping patients from being readmitted; where physicians get paid more to prevent disease than they do to simply treat it; and where companies like Pfizer get paid based on the number of strokes we prevent or the number of cancer patients who go into full remission, rather than the number of pills we sell.”

Merck & Co’s CEO, Ken Frazier, offered a few recommendations of his own, including:

• We can significantly reduce spending on pharmaceuticals, especially for patients, by ensuring that we have a viable market for biosimilars in the United States.
• We support efforts to encourage generic competition. A version of Chairman Grassley’s CREATES Act could make some needed reforms to encourage generic competition, and there are likely other policies we should consider as well to ensure there is no inappropriate gaming of the system.
• We support the idea of eliminating the use of drug company coupons in cases where a brand name drug now has generic competition. This slows the use of generics and violates the spirit of the Hatch-Waxman drug price competition law.
• We would also like to work with the Committee to find ways to end the price gouging pursued by those who jack up the prices of off-patent drugs that have no competition. These high prices hurt patients and do not create incentives for the kind of cutting-edge research we pursue.

Mr Frazier also had the hearing’s most memorable sound bite when he called for a healthcare ecosystem based on competitive, predictable, free market principles and not outrageous solutions, specifically foreign price controls. Zany ideas don’t solve complicated public health problems. There are no simple solutions to complex obstacles—and politicians hate that.
But all of this is contingent on senators and representatives being honest brokers and not hucksters on the hustings. As the great health care philosopher, Frank Douglas, reminds us, "It's not what you control, it's what you contribute."

Peter J. Pitts, a former FDA Associate Commissioner, is President of the Center for Medicine in the Public Interest