Letter from Washington: Drug makers peer out from the bunker
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WASHINGTON — Drug industry executives don’t get it: They’re not supposed to be the bad guys.

That was the feeling that seemed to permeate the annual meeting of the Pharmaceutical Research and Manufacturers of America, which gathered here this week amid withering scrutiny from politicians and the public.

The blame was spread around. Political candidates don’t understand how drug prices work. Neither does the public. The media isn’t helping, of course, focusing on outlandish characters like Martin Shkreli who don’t represent the bulk of a $300 billion industry.

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“The headlines don’t tell the full story,” Kenneth Frazier, Merck CEO and chair of PhRMA’s board, said to open the meeting Wednesday.

The drug industry’s reputation “has been tarnished by bad actors,” Frazier said, and become “an easy political target.”

There was a lot of that going around.

Stephen Ubl, PhRMA’s new president and CEO, was even more blunt. He alluded to a tweet from Hillary Clinton, announcing a forthcoming plan to combat price-gouging for medications. Some analysts blamed the tweet for a $132 billion loss in biotech investment.

Ubl was indignant.

“As we all know, the debate is largely myopic and misinformed,” he said. “The debate also ignores the value our products bring to patients, the health care system and the broader economy.”

“You wouldn’t know it from the headlines,” Ubl added. “The value is barely a footnote in these stories.”

Industry reps will tell you that the issues they’re confronting right now, access and pricing, aren’t new. Drug costs are actually relatively stable as a share of national health care spending. Have you seen the latest breakthroughs, a cure for hepatitis C and revolutionary immunotherapies for cancer?

They aren’t necessarily wrong about that. But nevertheless, the American public’s opinion of the pharmaceutical industry is dimming. Presidential candidates, from Bernie Sanders to Donald Trump, won’t hesitate to attack the industry and what they describe as its undue influence in Washington.

And that might be why those gathered at the Wardman Marriott this week sounded so befuddled. Nobody else seems to get it.

“Nobody in the American public understands it,” Andy Slavitt, a top Obama administration health official, said flatly of drug pricing.

It’s not just the amorphous US public either. Talking about patent policy, a topic of great importance to the drug industry because it protects their investments in research, Senator Chris Coons of Delaware said: “It is a relatively obscure field for most in Congress.”

Therefore, he added somewhat ominously, “It is easy to mislead staff and members.”

The magnifying glass of the presidential campaign is making the current debate a little more urgent for the industry, it seems. After listing examples of presidential candidates proposing policies that already exist, one attendee was incredulous.

“It’s policy that’s already in place that candidates aren’t familiar with,” she said, “and they’re just coming out with things people want to hear.”

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Who can blame them? Pharmacy-benefit managers. Out-of-pocket caps. Market exclusivity and inter partes review. There is a lot going on behind the scenes — from the list price that often drives headlines to the price that everyday people see when they’re checking out at the pharmacy counter.

Pharma’s great puzzle, one it still hasn’t quite figured out how to crack, is how to make it digestible. Frazier, in his opening speech, acknowledged the need “to do a better job of communicating our value” to the media, policymakers, and patients.

So they’re putting more and more energy into telling the feel-good stories of new treatments that are saving and improving lives. This week’s conference was peppered with posters and interludes touting therapies that are helping people with HIV and cancer.

Frazier pointed out that former President Jimmy Carter is now cancer-free thanks to an immunotherapy “that didn’t exist just two years ago.”

“Of course, as we know, science doesn’t just happen,” he said. “Our industry makes it happen.”

That is the tightrope that PhRMA is trying to walk. As public opinion sours, drug makers want to appear willing to engage, to acknowledge people’s struggles, and work toward a solution. But they are also confident in their value as an industry and often sound baffled that others don’t see it.

“Of course, as we know, science doesn’t just happen. Our industry makes it happen.”

Kenneth Frazier, CEO of Merck

They talk on the one hand about being “on the cusp of a golden era of discovery,” as Ubl put it. At the same time, he warned minutes later, “no one should doubt our resolve to fight price controls in whatever shape they may take.”

It’s a carrot and a stick. The drug industry says it is willing to defend its value and propose policies that it says would reward it. Medicine is on the edge of exciting new discoveries for cancer and Alzheimer’s disease.

But woe to the world if anybody gets in the way.

“We stand on the cusp of an amazing era of new medicines,” said George Scangos, the Biogen CEO and incoming chair of PhRMA’s board, to conclude the meeting. But without an industry to develop them, let’s not forget, “very few medicines will reach patients.”

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