This weekly column offers opinions on the latest pharmaceutical industry news.

The pharmaceutical industry wants you to know that it’s not “getting away with murder.”

That was the accusation leveled by President Trump two weeks ago, and it stunned industry executives, who were already on the defensive after sustained and increasingly harsh criticism of drug prices that has lowered their reputation among consumers and politicians.

So the industry is trying to fight back with a new ad campaign called “GoBoldly,” which aims to convince the American public that its efforts are all about saving lives.

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“This industry is the crown jewel of the American economy,” said Stephen Ubl, who heads the Pharmaceutical Research and Manufactures of America, the industry trade group that is spearheading the campaign with an extra $100 million in company membership dues. “… We have a great story to tell and we’re going to do a better job telling it.”

Good luck. This diversionary effort may have its virtues, but could also be a waste of time.

Here’s why: No matter how many times drug makers rightfully point out the positive differences their medicines make in relieving illness and prolonging lives, the increasing costs are putting these drugs out of reach for more and more people.

Just last week, a new Harris Poll reported that only 9 percent of Americans believe drug makers place more value on patients than profits; only insurers have a worse reputation overall among the various players in the health care system.

To be sure, some companies have been more egregious than others.

One notable example was Turing Pharmaceuticals and its former chief executive, Martin Shkreli, who bought an older, life-saving drug and hiked the price by 5,000 percent. He then taunted critics on social media and, while wearing a hoodie, told an industry conference his only regret was not raising the price still higher.

Ubl told the media Monday that he hopes the campaign will overhaul the industry image to reflect “fewer hoodies and more lab coats.”

But while such outliers may have tarnished the industry as a whole, pharmacies and medicine chests are filled with numerous drugs for which prices either started out high or have been rising. Some companies regularly raise prices more than once a year, and increases on list prices often exceed the inflation rate.

“To some extent, the industry was led into [its image] problem by the rogue players,” said Ira Loss of Washington Analysis, who tracks the pharmaceutical industry for investors. “But to some degree, it’s justly deserved and I don’t think there’s much they can do to change their reputation.”

Drug makers complain that harping on list prices is unfair and misleading, because the pricing system is enormously complicated and consumers generally do not pay those prices, anyway. Why? A portion of sales go to middlemen in the form of rebates that may or may not get passed on to consumers by health plans.

To bolster its contention, the industry trade group last week issued a report that found, based on list prices, companies kept 63 percent of the money spent last year on brand-name medicines. In fact, after subtracting rebates, net prices for brand-name drugs fell 0.3 percent in last year’s third quarter, even as list prices rose nearly 10 percent, according to Sector & Sovereign Research analyst Richard Evans.

Some drug makers, meanwhile, are responding to the public’s outrage by vowing to hold their price hikes to less than 10 percent annually.

It may be too late to save their reputations.

For one thing, the money trail is hard to follow because the pricing system is not transparent. Drug makers do not want to reveal actual prices for competitive reasons, making it hard to appreciate the nuances in the industry arguments. And even those companies that do limit their price hikes to, say, 9.5 percent, are taking increases that are much higher than inflation.

The industry has argued that its prices fund the research needed to find new therapies. And there have been significant advances in recent years, notably hepatitis C medicines with high cure rates and new immunotherapy medicines that are helping some patients beat back certain types of cancer.

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The new ad campaign focuses on this theme, but without delving into the pricing debate and for good reason. “They’re keeping their heads down and trying to talk about the good stuff — and hope that Trump gets distracted,” said one industry veteran who works in drug development.

Ad campaigns can work, of course. The pharmaceutical industry used a marketing blitz last fall to defeat a California ballot measure that was designed to lower drug prices. So while some might argue that the money spent on the latest ad campaign could be put to better use, drug makers may see this as a good investment if they can deflect any moves by Trump that would curtail prices and their profits.

Trump, however, appears to be singling out drug makers in keeping with his populist strategy. And as long as consumers have difficulty affording their medicines, the industry is likely to remain a whipping boy, cures or no cures.

Dylan Scott contributed to this report.

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  • Claiming Big Pharma is “the crown jewel of our economy” goes hand-in-hand with the egregious greed and inflated ego of this Wall Street-based industry. This has only been exacerbated as evidenced by the proliferation of the whore vulture venture capitalists wanting to get in on picking the bones of the taxpayer by purchasing old drugs and bumping their prices.

    Actually, Boeing remains the crown jewel of our economy, relying on the taxpayer-funded Export Import Bank to facilitate sales of its planes around the world, including to very wealthy Gulf countries. Conservatives call that “crony capitalism;” yet, where are they not to demand Big Pharma equate its prices and profits in the US to what is allowed elsewhere in the world–UK, EU, Switzerland, Canada, Australia, New Zealand?

    Wasting taxpayer dollars on their advertising (as it is tax deductible business expense), marketing, and lobbyists is obviously the greatest expense for Big Pharma. Any ad campaign will sound more like one for the Zeppelin Company in the 1930s unsuccessful in its attempt to demur its Nazi funding.

    Attacking with pitchforks and lanterns the castles on the mountaintop where Big Pharma resides in a populist drive by President Trump would reverberate around the world. The time has come to dramatically change the business model of Big Pharma, as based on lobbying and marketing. We need to show we can still take care of our people by reigning in the excessive abuse of an out of control industry so dependent upon how 50% of its profits here are derived from taxpayer funded programs (Medicare, Medicaid, VA).

    • Guess you never heard of Golden Age of pharmaceutical industry that produced drugs that will keep you bloviating a few more years. Under your theories we should sell our IBM stock cause they once worked with Hitler. I worked for a German chemical company that 50 years ago been part of the Nazi war machine. I have a nice pension that I don’t plan to return. You self righteous people give me diarrhea.

  • I think the following also applies to the dozens of R&D people I’ve worked with since 1983. The reality is that none or few of us have actually met the patients we have developed drugs for. Hence my “don’t care” analogy. There is a music club near my residence that I often attend, although the owner is not particularly friendly. I go to hear great music, not to schmooze the owner. Sorry to break the news, and notwithstanding the gauzy commercials, Pharma folks don’t really care about saving their reputation. It’s never been in any of our job descriptions that I’ve read or written. We are not car salesman that have to wear happy face stickers. We don’t come in contact with our “patients” hence the reputation to be “saved” is a highly abstract concept, and more subject of cocktail conversation than anything else.

    • No, you’re just the robots who serve the machinery, giving the rest of us diarrhea from your pious narrow perspective of the issues impacting Americans as a result of an unhinged Big Pharma.

  • A serious reason for our disapproval of PHRMA is their preference for QALY based pricing rather than cost based pricing. The expected benefit in terms of quality-adjusted life years is a disingenuous basis for pricing. Do physicians do that? No. Do surgeons do that? No. So why do we allow PHRMA to get away with that?

    • Managed care has solved the quality issue with surgeons. That means the meatball surgeon who does an appendectomy with complications will be compensated the same as a surgeon who performs an uncomplicated procedure. In fact the mediocre surgeon may make more money when he knicks your cecum, causing massive peritonitis and a two week stint in the ICU. If he hasn’t been replaced by a hospitalist his cash register will light up every time he sees you in the hospital and writes a six word progress note on the chart.

  • The problem being, of course, when you start out with drug prices too high for the average consumer, your “sacrifice” of only raising the prices an additional 10% is much too little, way too late. Perhaps the industry would be better off reputation-wise if they instituted a multi-year moratorium on raising prices until executive compensation is better under control?

  • …less than 10% increase! What unparalleled sacrifice! Forgetting for a moment that the advertising campaign is part of the business expense – so we wind up trying to watch the evening news through a forest of side effects, and now a tsunami of self-congratulatory hype, that we wind up paying for? Not a bad business model because at the same time it’s driving my blood pressure through the roof.

  • Pharma CEOs are deluding themselves by arguing that patients don’t understand the value of their drugs. Patients are not dumb. They get it. But patients who must choose between their insulin and food for the kids have a different notion of value.

  • Like Chris Rock said in the 90’s “Ain’t no money in the cure, the money’s in the medicine…that’s how a drug dealer makes his money, on the comeback.”

  • The Pharma industry spends more money on advertising than it does on research. I am so tired of seeing ads on TV for the latest and most expensive. The USA is only one of two countries that allow such advertising.

  • The day biotech, pharmaceutical, medical companies invited the world of marketing and business into their sphere, they have lost the ability to wave the noble profession of helping the sick banner, and have turned into jackals. When drugs are marketed to the public directly that was a red line crossed. When these companies became more about making money, IPO’s, corporate business models, they are now looked on with the same suspicion as a car salesman. They have become corrupted, greedy, gouging, opportunistic in a field that demands true benevolence, compassionate caring, and people over profits. Now those characteristics that defined an industry have been used as propaganda for the saps who still believe it to be true. This is all about “Show Me The Money!” For shame.

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