Deep in the pocket...

GOP candidates stuck on drug prices

They blame skyrocketing costs on over-regulation and bad actors, but offer consumers little hope of relief.

By Paul Demko and Sarah Karlin

Florida Sen. Marco Rubio blamed skyrocketing drug costs on “pure profiteering” by drug companies at a private campaign event in New Hampshire.

Retired neurosurgeon Ben Carson complained in Iowa that “the same drug that costs 60 dollars here for a pill, you can go to another country and get it for a quarter.”

And billionaire businessman Donald Trump said it was “disgusting” that Turing Pharmaceuticals had imposed a 5,000 percent price hike on a drug relied on by HIV patients.

What the 2016 GOP presidential candidates don’t say is that Medicare should negotiate drug prices or that the government should limit drug maker’s profits, steps that might dramatically shake up the marketplace. For the most part, they’re not even making modest suggestions to stem rising costs, focusing instead on hammering a few headline-making companies that they portray as bad actors.

Even as they try to address an issue that polls show is voters’ No. 1 health concern, the candidates are caught in the box of Republican free market orthodoxy — and also, of long-standing relationships with the pharmaceutical industry, a lobbying powerhouse on the Hill. In the 2012 election cycle, more than 60 percent of PhRMA’s spending went toward Republican candidates, compared to 25 percent of contributions to Democrats, according to the Center for Responsive Politics.

“Republicans are darned if they do and darned if they don't,” said Dean Clancy, a conservative health policy analyst and former White House and congressional staffer, now consulting for Adams Auld LLC. “If they oppose price controls, they look like they're in the pocket of the drug companies. If they endorse competitive reforms, they potentially risk the ire, not just of the drug makers, but also of insurers and patients. What I think they really want is to find a way to lay the blame on Obamacare.”

As a result, most have sought to ride the wave of populist anger by blaming the government for overzealous regulation, in addition to castigating the pricing outliers.

Former Florida Gov. Jeb Bush has called for modernizing the FDA’s “regulatory morass” — even though the agency has gone through a few rounds of congressionally-mandated overhauls and now approves drugs faster than most other developed countries, where many prescriptions are lower cost.

And New Jersey Gov. Chris Christie called for aggressive prosecution of price-gougers during a recent presidential debate, but scoffed at more aggressive Democratic proposals. “Does anybody out there think that giving Washington, D.C., the opportunity to run the pharmaceutical industry is a good idea?” he asked at the CNBC debate in Colorado.

In fact, polls suggest that many people do support some government intervention. A recent survey from the Campaign for Sustainable Rx Pricing found 90 percent of likely Iowa voters believe it’s important for the candidates to address high drug costs and almost 70 percent said the government should ensure drug price increases are limited.

More Republicans were angry about drug prices than about Obamacare, a Kaiser Family Foundation survey found. Republicans are also part of the huge majorities that back strong government measures to make drugs affordable, for instance, supporting Medicare negotiations over prices (83 percent) and capping what companies can charge for certain products (76 percent).

The GOP candidates’ reticence stands in stark contrast to Democrats, who have offered aggressive plans to bring down drug costs. Hillary Clinton and Bernie Sanders both want to attack prices through greater government intervention in the marketplace. Those ideas may ultimately prove politically problematic, but they acknowledge drug spending as a central pocketbook concern for voters.

The Obama administration, meanwhile, held an unusual public forum recently that brought together government officials, drugmakers and health insurers to brainstorm possible solutions and build a political case for a new approach.

As the election draws closer, all signs are the pressure on Republicans to address the issue will only grow.

Karen Ignagni, recently departed CEO of America’s Health Insurance Plans, compared the rising anxiety over drug costs to the debate about access to health care that simmered during the 2008 presidential cycle. That discussion forced presidential contenders on both sides of the aisle to offer significant proposals to address the issue and ultimately led to passage of the Affordable Care Act.

“We have reached a fork in the road where this issue now has been squarely teed up for the political dialogue,” Ignagni said. “Consumers and employers and public sector purchasers are focused laser-like on affordability.”

But there’s little indication that Republicans, on the campaign trial or on the Hill, have concrete solutions to address constituents’ concerns. Some on the right worry this could quickly become a liability.

“I think politically [Republicans] are in a challenging spot,” said Scott Gottlieb, a fellow at the free market-focused American Enterprise Institute who previously held senior policy positions at the Centers for Medicare & Medicaid Services and the Food and Drug Administration.

Republicans are starting to discuss the drug price issues, but without a set of policy solutions to back them up, he said.

“In the absence of a defined set of policies I think this could end up spiraling into a big populist issue with no clear response,” Gottlieb said. “I suspect that’s why the Democrats are pushing on it. Republicans are probably going to end up being vulnerable because they are not unifying behind a core set of principles and polices.”

In the Senate, the only Republican who has taken action on drug pricing issues, Susan Collins of Maine, is also focusing on so-called bad actors, rather than on the high costs of innovative therapies.

Along with Missouri Democrat Claire McCaskill, she is probing Turing, Valeant and two other companies known for buying existing drugs and then exponentially hiking the prices.

Collins told POLITICO it is “premature to settle on policy,” but that she wants to make sure any solutions “do not stifle innovation and R&D.” She said she expected widespread bipartisan interest in her investigation.

On the House side, Oversight and Government Reform Chairman Jason Chaffetz (R-Utah) recently acquiesced to Democrats' importunings to hold a hearing on the tactics used by Turing and Valeant, six months after their initial request for an investigation.

Most observers say Republicans will have to eventually come up with their own plan to address a key pocketbook issue for voters still struggling in the aftermath of the Great Recession.

“If they don’t, it’s going to be to their detriment,” said Chris Jennings, a Democratic veteran of Washington’s health care battles. “They can’t just not engage on this front.”