SAN FRANCISCO — Martin Shkreli was everywhere last year. After
hiking the price of an antiparasitic pill from $13.50 to $750
as the then-CEO of Turing Pharmaceuticals, the unapologetic,
indicted, and widely reviled “pharma bro” helped ensure that
the issue of skyrocketing drug prices made news almost daily.
No wonder Stephen Ubl, who runs the pharma industry’s lobbying
group, said that moving on from Shkreli and doing damage
control are the top priorities for drug makers in 2017.
“I think the image of the sector has been hijacked by some bad
actors, and we have to do a better job of telling our story,”
Ubl, president and CEO of the Pharmaceutical Research and
Manufacturers of America (PhRMA), told BuzzFeed News on Monday.
PhRMA says it plans to launch a national ad campaign, worth
tens of millions of dollars a year, to promote the industry’s
achievements. The largest ad campaign the group will have ever
done, its emphasis will be “more lab coat, less hoodie,” Ubl
quipped — a reference to the gray hoodie that Shkreli
infamously wore in December 2015 when he was
arrested on fraud charges unrelated to drug pricing.
Ubl was speaking on the first day of the 35th Annual J.P.
Morgan Healthcare Conference in San Francisco, where hundreds
of biopharma executives and investors gather to make deals and
announce news. The event caps a year of withering criticism and
ups and downs for Big Pharma — and kicks off a year of great
Pharma bros aside, Valeant Pharmaceuticals drew heat for
jacking up the costs of old medicines — like a
2,700% increase for a lead poisoning drug in a single year
— and the CEO testified on the practice at a Congressional
hearing. So did Mylan’s CEO, Heather Bresch, after the price of
essential for preventing allergic reactions in kids and
adults, went from about $100 in 2007 to $600.
During a conference-related event Monday night, Vice President
told a crowd that he planned to push for affordable drugs
after he left office: “Too many Americans are forced to sell
their homes, to go into bankruptcy, so their loved ones can get
care and hope for a cure.”
At first glance, Biden has cause for anger: List prices for
rose 12% in 2015, according to a report by IMS Health. But
those price hikes do not reflect the rebates and other
discounts that insurers and third-party prescription drug
administrators demand from companies. The net price growth —
what insurers and employers actually pay for drugs — went up
just 2.8%, much lower than in previous years.
Adding to the industry’s worries, some high-profile
experimental drugs, like Eli Lilly’s Alzheimer’s
treatment, flamed out last year in clinical trials. The Nasdaq
Biotechnology Index finished the year down more than 20%,
despite an immediate post-election bump.
And the FDA approved only 22 drugs in 2016, down from an
unusually high 45 in 2015 and 44 in 2014.
And in 2017, the pharma industry could face unprecedented
opposition from the Oval Office. “I’m going to bring down drug
prices,” President-elect Donald Trump recently told
Like many others in the industry, Ubl said he didn’t see Trump
coming. “It is an unsettled period of time as a new government
takes shape,” he acknowledged, “and it was a surprising
But he argues that the pricing debate is in many ways “myopic.”
“It’s not focused on the big picture,” he said, “and it loses
the forest for the trees in the sense that our true target
ought to be in addressing underlying chronic diseases.”
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On one hand, Ubl said, there are companies that buy and hike up
the prices of old generic drugs, a la Mylan, Valeant, and
Turing. Ubl thinks that the FDA should make it easier for
competing drugs to gain regulatory approval and enter the
market, driving down prices all around.
On the other hand, Ubl said, there are new prescription drugs
that may seem pricey, but should be valued by how much money
they can theoretically save the health care system in the
bigger picture. Gilead’s Sovaldi is a $84,000 cure for
hepatitis C — a disease that previously had none — and can
reduce the costs of hospitalizations, liver cancer, and liver
transplants, Ubl said.
While the United States is the only developed nation that does
not regulate prescription drug prices, some individual states
are trying to do so on their own. Last year,
Vermont became the first to pass a law that requires drug
makers to justify their price hikes, even though it can only
issue $10,000 fines to those that don’t comply. And in
November, California voters rejected a proposition that would
require state agencies to pay no more than what the federal
Department of Veterans Affairs pays for prescription drugs —
although not without the industry spending more than $100
million to help defeat it.
Ubl argues that such laws are “fundamentally misguided.” A
drug’s sticker price “doesn’t really reflect the true cost of
coming up with a breakthrough medicine,” he said, such as
clinical trials that fail. Tufts University researchers peg the
average cost of developing a drug at
$2.6 billion (although
critics accuse the largely
industry-funded group of inflating its figures).
While it’s unclear what, if anything, Trump will do about drug
prices, Big Pharma may enjoy greater freedom under a Congress
that’s dominated by Republicans, historically
21st Century Cures Act, passed with bipartisan backing in
December, allows companies to submit what’s called “real-world
evidence” — such as safety monitoring data and observational
studies — in seeking FDA approval, instead of just randomized
control trials. Critics, such as Senator Elizabeth Warren and
the consumer rights advocacy group Public Citizen, say this
provision weakens FDA oversight by allowing anecdotal
observations to be part of the process, but the pharma industry
“I think policymakers have this appreciation for the fact we’re
on the cusp of a lot of exciting things coming down the
pipeline, and want to make sure the policy ecosystem is in a
place to realize those gains,” Ubl said.
Overall, how does the head of the pharma industry feel during
this uncertain time?
“I’m an optimist by nature,” Ubl said.