WASHINGTON — Daniel Best is suddenly leading the government’s campaign to bring down prescription drug prices. But nobody around town seems to know the guy.
While he’s a Washington outsider, he’s the very definition of a pharmaceutical industry insider, having spent the last 13 years working for pharmacy benefit managers, the middlemen who negotiate drug prices. Their secretive contracting and business practices have drawn suspicion from lawmakers and administration officials.
Best comes to government directly from CVS Health, where he worked on negotiating drug prices for seniors, following 12 years at the pharmaceutical company Pfizer. According to a financial disclosure form, his salary and bonuses at CVS ran just over half a million dollars. Now, he’s advising Secretary of Health and Human Services Alex Azar on how to reduce prescription drug prices.
Conversations with pharmaceutical executives and former co-workers reveal that Best is a seasoned negotiator, a tough and unwavering advocate for patient access, and an all-around friendly guy. But one thing remains a mystery: whether he’ll advocate for his former colleagues in the PBM world, or if, in the words of a lobbyist, he’ll show the public “where the bodies are buried.”
Best has stepped into the government in the midst of a vicious battle between PBMs and drug makers, each blaming the other for the high cost of prescription drugs. PBMs point out that the drug companies set the price. Drug makers say that PBMs effectively force the prices up through the complex rebate system. Best has an inside view into the situation.
“The most important thing I learned about the PBM industry is that every player serves a critical role in managing this complex system and we wouldn’t be talking about lowering prescription drug prices today unless PBMs had a role to play,” Best said in an email, through an HHS spokesperson.
“Having somebody [at HHS] that understands what PBMs do and how they do it — I look at it as a benefit,” said another health insurance lobbyist. “Some people look at it [like], holy crap, he’s going to know where we buried the treasure.”
The first signs of Best’s influence will come this week, as President Trump prepares to unveil what top health officials are promising will be his administration’s most robust plans yet for dealing with drug pricing. The president is scheduled to deliver a major address Friday afternoon.
Best certainly isn’t the first pharmaceutical executive hired into the Trump administration, but he is the first with such extensive knowledge of the PBM industry — and of Medicare Part D, which helps pay for drugs for older Americans.
Best started his job at the beginning of April, but he had been on the department’s radar earlier in the year, when it started to talk about big changes to Medicare. Best signed a financial disclosure form on Feb. 11, and the very next day, the president’s budget hinted that something was going to change.
The budget proposed moving some drugs from the Part B program, which typically covers inpatient medical costs, to the Part D program, which typically covers outpatient drugs. And both Food and Drug Administration Commissioner Scott Gottlieb and Centers for Medicare and Medicaid Services Administrator Seema Verma have criticized how the drug rebate system impacts patients — the very same system that Best spent 13 years of his work life promoting and growing.
Best started his PBM career at MemberHealth, based in Ohio, where he was charged with leading a team of people who sat across the negotiating table from pharmaceutical companies. His team was responsible for a key function of PBMs — demanding that drug companies provide the medicine to the insurer at a reduced price, and threatening not to cover the drug unless the price was low enough. In this case, the patients who were receiving the drugs were seniors covered under the Medicare Part D program.
One member of Best’s team was Chuck Spinelli, who joined in 2007. He described his former boss as a “straight-shooter.”
“He’s got a real nice personality,” Spinelli said. “He’s not a jerk, he’s not overbearing. He’s approachable, and pharma liked him. They appreciated working with him. He was very transparent. He was very honest. He didn’t play any games.”
Spinelli related a tale of a pharmaceutical salesman, someone who had worked with Best years before at Pfizer, who was trying to get his drug onto the formulary — the list of drugs that would be covered by an insurance plan.
“He thought he was in a good position to get his drug on the formulary, like he would get picked because he knew Dan, they went way back. But you know, to Dan’s credit, it wasn’t the best deal, it wasn’t the best for the members, and he didn’t choose his friend’s drug,” Spinelli said.
Chuck Hallberg, founder and former chief executive of MemberHealth, who no longer works in health care, said that the company was small and lacked the name-recognition of the industry giants. People like Best couldn’t rely on their firm’s reputation — they had to put in the work.
“Since we couldn’t be ‘the brand,’ we knew that we could be the guys that did the most research, the most study, the most preparation, and were the most prepared for our meetings,” Hallberg said. “That’s exactly how I would characterize Dan, is [that] he fit that mold exactly.”
Pharmaceutical executives, who are on the other side of the drug price negotiations, also had good things to say about Best.
Doug Langa, president of Novo Nordisk Inc., the U.S. affiliate of the global pharmaceutical company known for its diabetes drugs, said that Best is one of just a few handfuls of people in charge of negotiating drug prices on behalf of patients.
“I would characterize him as a Medicare Part D expert,” Langa said.
“He was an extremely tough negotiator,” said another pharmaceutical executive who has worked with Best, who did not want to be named. “But at days end, he knew the program, and he kept the beneficiaries’ priorities front and center.”
Best stayed in the PBM industry after his company was acquired — Universal American bought MemberHealth in 2007, and CVS Caremark in turn bought the company’s Part D business in 2011. He moved up the ranks to eventually become a vice president at one of the country’s largest PBMs.
By 2017, 13 percent of Medicare Part D recipients were enrolled in CVS Health plans. Their “SilverScript Choice” prescription drug plan was the most popular on the market, with about 4.24 million patients, and carried the third-lowest average monthly premium.
“I worked with the manufacturers to drive the lowest net cost in the market and market research shows that beneficiaries buy Medicare Part D based on low premiums,” Best said in an email, through an HHS spokesperson. “Knowing this, I worked towards lower prescription drug prices for the beneficiaries of the program.”
Some have raised questions about Best’s suitability to shape policy in this area, since he just recently moved over from industry. In April, Rep. Keith Ellison, a Minnesota Democrat, sent a letter to HHS asking for more information about Best’s background, his financial conflicts of interest, and how he plans to recuse himself from work regarding CVS and Pfizer. As of Wednesday, a spokesperson for Ellison said, he has not received a response.
In addition to $502,776 in salary and bonuses, Best’s February financial disclosure form also listed at least $701,000 of additional assets and income from CVS, some of which was “anticipated.” The form uses ranges, not exact numbers, so the total amount could be as high as $1.46 million.
Best also reported holding assets in pharmaceutical companies and other PBMs that are competitors to CVS, including Aetna, Anthem, Celgene, Express Scripts, Humana, Keryx Biopharmaceuticals, and Rite Aid. All in all, these assets were worth between $35,000 and $175,000.
HHS spokesperson Caitlin Oakley said that Best has divested from all of these assets, either by forfeiting them, selling them, or giving them away. She did not specify what happened to each asset.
Oakley said that “Mr. Best is in full compliance with all federal ethics laws, rules and regulations. He has divested all of the holdings that he was required to divest pursuant to his ethics agreement.”
When asked for a copy of the ethics agreement, Oakley did not provide it, directing STAT to file a FOIA request, citing “longstanding process and procedures.”
Pharmaceutical executives were reluctant to discuss specifically what they’d like Best to do in the government, besides help bring disparate voices together.
“As opposed to continuing to kick the ball back and forth — the insurer side, PBMs, the manufacturer side — I think having somebody who worked on both sides of it could be successful,” said Don Sawyer, senior vice president of market access at Bayer.
The health insurance lobbyist said that Best’s knowledge and experience could be helpful to balance out a national dialogue in which the pharmaceutical industry seems to hold most of the power.
“It all seems very one-sided right now,” the lobbyist said. “PhRMA’s got a $50 million howitzer pointed at other folks, including the PBM industry, and saying, it’s them, it’s them, it’s them.”
Azar and Best have inside knowledge, he said, which can cut two ways.
“They’ll know where the bodies are buried, but they’ll also understand you can go after those bodies only to a certain degree,” the lobbyist said. “You can only shake up so much.”