Pharma Executives Worried Over Presidential Candidates Demand for Drug Price Reform
Responding to tough talk by presidential candidates about price gouging by drug companies, pharmaceutical executives have told investors that they are working actively to influence the political debate. And in a move that reveals how much leeway drug firms actually have over pricing decisions, some are even saying that they have minimized price hikes in recent months to avoid attracting attention.
Democratic contenders Bernie Sanders and Hillary Clinton have both called for the government to do much more to bring down the price of medications. And last week, Republican candidate Donald Trump came out in support of allowing Medicare to negotiate for cheaper drug prices, a move that places him even to the left of some leaders in the Democratic Party.
The political environment has Wall Street worried. “We heard Bernie and Hillary last night go after drug pricing again and I think that's also something we are going to hear from the Republicans," warned Jami Rubin, the Goldman Sachs health care group analyst, on an earnings conference call last week for Johnson & Johnson.
Eli Lilly executive Jan Lundberg assured investors on his company's most recent earnings call that to combat the rhetoric around drug prices, the industry maintains “an active dialogue with each of the candidates" and will “work across party lines" to influence policy.
Merck chief executive Ken Frazier, speaking at the J.P. Morgan Health Care Conference in San Francisco last month, pledged to do more as chairman of the Pharmaceutical Research and Manufacturers of America (PhRMA), the industry's lobbying group. “With respect to the political dynamic," Frazier said, “I think the most important thing, and I try to do this in my role as head of PhRMA, is I think the industry needs to communicate better with the outside world."
At the same conference, Biogen chief executive George Scangos, who also serves as co-chairman of PhRMA, said his firm increased prices on three drugs recently, but at a “somewhat lower number" to avoid placing “a target on our foreheads." He added that “it's still possible to take price increases" but that he thinks “it's wise to be a little prudent."
James Hammergren, the chief executive of McKesson, which is the largest wholesale drug distributor in the nation, echoed the call for the industry to hold off on price hikes to avoid attracting unwanted scrutiny. “I would say that political discourse that's taking place, and the congressional inquiries relative to pricing practices, I think are obviously going to have people at least pausing perhaps to consider whether now is the right time to take a price increase," Hammergren said during a recent earnings call. In 2012, the firm paid $151 million to settle claims the firm deliberately overcharged Medicaid for reimbursements for some 1,400 brand-name drugs.
Vijay Das, who is a health care policy advocate at the consumer group Public Citizen, says that the recent statements confirm that the pharmaceutical industry's “pricing decisions are based upon the reach of their market and political power, not development costs or lengthy FDA approval process." He notes that PhRMA spent $18 million lobbying the federal government in 2015 alone. Records maintained by the Center for Responsive Politics show that drugmakers across the board spent more than $235 million on lobbying last year.
John Maraganore, the chief executive of Alnylam Pharmaceuticals, told investors on the company's recent earnings call that recent talk of drug pricing is “political demagoguery that's going on right now." He conceded, however, later in the call that companies will need to “think about their growth based on productivity not based on arbitrary price increases."
Shkreli made worldwide headlines for dramatically hiking prices of the drugs he bought. Newly reported emails show that Shkreli boasted that by boosting the price of Daraprim, his company would bring in $375 million a year, “almost all of it profit."
But other firms have steadily increased prices as well. Vanda Pharmaceuticals, for instance, has increased the prices of its drug Hetlioz, which treats sleep disorders for the blind, by 76 percent since it was introduced in 2014. (You may have seen its new TV ads, featuring an Afghan war veteran.)
Pfizer, since the beginning of last month, has raised prices an average of 10.6 percent for more than 60 branded products. Bloomberg reports that prices have doubled over the last year for over 60 brand-name drugs.
Meanwhile, PhRMA has reportedly invested in a new marketing campaign to boost the image of the industry.
Reprinted with permission from The Intercept.
YOU MIGHT ALSO LIKE
A "trash tsunami" has washed ashore on the beaches of Honduras, endangering both wildlife and the local economy.
EcoWatch Daily Newsletter
More long-finned pilot whales were found stranded today on beaches in Tasmania, Australia. About 500 whales have become stranded, including at least 380 that have died, the AP reported. It is the largest mass stranding in Australia's recorded history.
- Annual Whale Slaughter Still a Tradition on the Faroe Islands ... ›
- Hundreds of Pilot Whales Die in Devastating Mass Stranding in New ... ›
- Green Group Tests Facebook With Ad Claiming Conservatives Back ... ›
- Illegal Wildlife Trade Thrives on Facebook, Internet Forums ... ›
- Facebook Loophole Allows Climate Deniers to Spread Misinformation ›
- Facebook Hires Koch-Funded Climate Deniers for 'Fact-Checking ... ›
By Harry Kretchmer
By 2030, almost a third of all the energy consumed in the European Union must come from renewable sources, according to binding targets agreed in 2018. Sweden is helping lead the way.
Sweden is a world leader in renewable energy consumption. Swedish Institute/World Bank
Naturally Warm<p>54% of Sweden's power comes from renewables, and is helped by its geography. With plenty of moving water and 63% forest cover, it's no surprise the <a href="https://sweden.se/nature/energy-use-in-sweden/#" target="_blank">two largest renewable power sources</a> are hydropower and biomass. And that biomass is helping support a local energy boom.</p><p>Heating is a key use of energy in a cold country like Sweden. In recent decades, as fuel oil taxes have increased, the country's power companies have turned to renewables, like biomass, to fuel local 'district heating' plants.</p><p>In Sweden these trace their <a href="https://www.sciencedirect.com/science/article/pii/S0360544217304140#fig3" target="_blank">origins back to 1948</a>, when a power station's excess heat was first used to heat nearby buildings: steam is <a href="https://www.sciencedirect.com/topics/engineering/district-heating-system" target="_blank">forced along a network of pipes</a> to wherever it's needed. Today, there are around 500 district heating systems across the country, from major cities to small villages, providing heat to homes and businesses.</p><p>District heating used to be fueled mainly from the <a href="https://www.sciencedirect.com/science/article/pii/S0360544217304140" target="_blank">by-products of power plants</a>, waste-to-energy plants and industrial processes. These days, however, Sweden is bringing more renewable sources into the mix. And as a result of competition, this localized form of power is now the country's<a href="https://www.sciencedirect.com/science/article/pii/S0360544217304140#fig3" target="_blank" rel="noopener noreferrer"> home-heating market leader.</a></p>
Sweden is using smart grids to turn buildings into energy producers. Huang et al/Elsevier
Energy ‘Prosumers’<p>But Sweden doesn't stop at village-level heating solutions. Its new breed of energy-generation takes hyper-local to the next level.</p><p>One example is in the city of Ludivika where 1970s flats <a href="https://www.buildup.eu/sites/default/files/content/transforming-a-residential-building-cluster-into-electricity-prosumers-in-sweden.pdf" target="_blank">have recently been retrofitted with the latest smart energy technology</a>.</p><p>48 family apartments spread across 3 buildings have been given photovoltaic solar panels, thermal energy storage and heat pump systems. A micro energy grid connects it all, and helps charge electric cars overnight.</p><p>The result is a cluster of 'prosumer' buildings, producing rather than consuming enough power for 77% of residents' needs. With <a href="http://www.diva-portal.org/smash/get/diva2:1232060/FULLTEXT01.pdf" target="_blank" rel="noopener noreferrer">high levels of smart meter usage</a>, it's a model that looks set to spread across Sweden.</p>
<div id="d7bf9" class="rm-shortcode" data-rm-shortcode-id="8757b138d5570bec9d6aad18074a429a"><blockquote class="twitter-tweet twitter-custom-tweet" data-twitter-tweet-id="1273556364263071744" data-partner="rebelmouse"><div style="margin:1em 0">Read more about Western Harbour and book a visit: https://t.co/ujSmVs9rNK 🏡🌳🌊 https://t.co/C5PuPziqIM</div> — Smart City Sweden (@Smart City Sweden)<a href="https://twitter.com/SmartCitySweden/statuses/1273556364263071744">1592474473.0</a></blockquote></div>
Scaling Up<p>A recent development by E.ON in Hyllie, a district on the outskirts of Malmö, southern Sweden, <a href="https://www.eonenergy.com/blog/2019/February/sweden-smart-city" target="_blank">has scaled up the smart grid principle</a>. Energy generation comes from local wind, solar, biomass and waste sources.</p><p>Smart grids then balance the power, react to the weather, deploying extra power when it's colder or putting excess into battery storage when it's warm. The system is not only more efficient, but bills have fallen.</p><p>Smart energy developments like those in Hyllie, Ludivika, and renewable-driven district heating, offer a radical alternative to the centralized energy systems many countries rely on today.</p><p>The EU's leaders have a challenge: how to generate 32% of energy from renewables by 2030. Sweden offers a vision of how technology and local solutions can turn a goal into a reality.</p>
- Sweden to Become One of World's First Fossil Fuel-Free Nation s ... ›
- These Countries Are Leading the Transition to Sustainable Energy ... ›
- Sweden Shuts Down Its Last Coal Plant Two Years Early - EcoWatch ›
By Jessica Corbett
In another win for climate campaigners, leaders of 12 major cities around the world — collectively home to about 36 million people — committed Tuesday to divesting from fossil fuel companies and investing in a green, just recovery from the ongoing coronavirus pandemic.
- Oxford Endowment Ditches Fossil Fuels in 'Historic' Decision ... ›
- Fossil Fuel Divestment Debates on Campus Spotlight Societal Role ... ›
- London and New York Mayors Call on Other World Cities to Divest ... ›