WASHINGTON — The pharmaceutical industry has opposed most of Hillary Clinton’s proposals to bring down drug costs, but there’s one idea its chief lobbyist supports: limiting the amount that consumers have to pay out of their own pockets.
In an interview with STAT, Stephen Ubl, president and chief executive officer of Pharmaceutical Research and Manufacturers of America, the main trade group for drug companies, singled out the proposal when asked whether there were any positive ideas in the Democratic presidential front-runner’s drug prices plan.
“I would say one thing that she has proposed that we would favor is capping out-of-pocket costs,” Ubl said. “I think we have to acknowledge that some patients do face challenges in accessing their medicines.” In the past, he said, people were only charged modest copayments for their share of prescription drugs. But “in recent years, we’ve seen the insurance market shift,” he said, and people are being required to pay more of their share of all health care expenses.
“And so minimizing out-of-pocket costs is, I think, important,” Ubl said, noting that Obamacare already puts limits on the amount people have to pay out of pocket if they’re covered under the law’s health insurance marketplaces.
PhRMA hasn’t publicly backed the proposal previously, and a spokeswoman later noted that the group hasn’t taken a position on specific congressional proposals to limit out-of-pocket expenses. But the remark underlined the sometimes tense push-and-pull between the pharmaceutical industry and health insurers over who’s actually responsible for rising prescription drug costs.
Clinton’s proposal on out-of-pocket costs puts the health insurers on the hook for covering costs once a patient has paid $250 a month, and is fiercely opposed by the industry. It would have no impact on what drug manufacturers can charge for a drug.
Ubl, a longtime Washington health care expert who became the head of PhRMA in November, largely avoided discussion of the presidential race — even when it came to Clinton, whose other drug cost proposals PhRMA blasted in September when she first released them. And he steered the conversation away from Republican front-runner Donald Trump, who has bashed the pharmaceutical industry with almost as much fervor as Clinton.
Still, Ubl’s comments on Clinton’s version of the idea underscore the political reality that health insurers, not drug companies, are likely to take the biggest hit if the caps become law. America’s Health Insurance Plans, the main health insurance trade group, has already warned that the proposal “will not make drug prices more affordable.”
The two sides are trying to work together on other issues, like new government payment policies, and Ubl said he still believes there is “common ground to be found.”
Ubl also made clear he opposes the biggest ideas Clinton and Trump have endorsed — letting Medicare negotiate drug prices and allowing cheaper drugs to be imported from other countries.
The two ideas “have been around for a long time, largely discarded on a bipartisan basis, not likely to move forward, and they shouldn’t. I think they’re bad policy,” Ubl said. He noted that congressional budget experts have dismissed Medicare drug price negotiations because “unless you restrict access to products, it would produce negligible savings,” and that importing drugs would endanger people’s health and safety.
Ubl, a former Capitol Hill aide who used to run AdvaMed, the trade group for medical device manufacturers, came to PhRMA at a critical time for the drug industry, with scandals over price hikes from companies like Turing and Valeant dominating the news. He responded by trying to put as much distance between them and the rest of the industry as possible, writing in a December op-ed that Turing and Valeant are “essentially hedge funds masquerading as pharmaceutical companies” and don’t represent the rest of the industry.
Ubl acknowledges that the controversies have been “very damaging,” particularly in the case of former Turing CEO Martin Shkreli, who quickly became famous for his unapologetic defense of his 5,000 percent price hike for a drug used to treat AIDS patients. “People connect the dots in a way that’s very unhelpful,” Ubl said.
But he also argued that “the private market has exacted an impact on those players” and made them outcasts because of their actions.
“Martin Shkreli’s been indicted, Valeant’s lost its CEO, Shkreli lost his job as well. And the market has punished both companies, which I consider outliers,” Ubl said. “Hopefully we’re going to provide people an opportunity to take a fresh look at PhRMA, and I think differentiating ourselves from those outliers is clearly a piece of that.”
Even now, though, Ubl is dismissive of surveys — including one by STAT and the Harvard T.H. Chan School of Public Health — that have shown strong public support for government action to lower drug costs, including allowing Medicare to negotiate the prices for seniors.
“I think you have to take those surveys with a grain of salt, in the sense that they’re not asking the question, ‘Would you support government action if it reduced my access to breakthrough treatments?’” Ubl said. “It’s all in how you ask the question. And if you do ask the question that way, you get a very different result.”