President Trump has been pressing for proposals to lower prescription drug prices to the point that he has begun conferring with a senior Democratic lawmaker on ways to prevent the pharmaceutical industry from “getting away with murder” in their pricing practices.
While Trump has yet to unveil concrete proposals for addressing the problem, during the campaign he proposed allowing the importation of cheaper drugs from Canada and other countries to enhance competition. He also favors allowing Medicare officials to negotiate prices with the major drug companies by eliminating a non-negotiating ban.
Ironically, Trump’s choice to head the Food and Drug Administration (FDA), Dr. Scott Gottlieb, worked as a consultant for the pharmaceutical industry for years and was a sharp critic of those proposals during the 2016 presidential campaign. “The Trump plan—while perhaps good politics—will offer consumers little relief,” Gottlieb wrote in a March 2016 commentary in Forbes.
But that was then, and this is now. During his confirmation hearing before the Senate Health, Education, Labor, and Pensions Committee Wednesday morning, Gottlieb repeatedly ducked questions about his views on drug importation and strengthening Medicare officials’ hands in negotiating lower prices.
Pressed by Sen. Bernie Sanders (I-VT) on whether he would now get behind Trump on these and other schemes for dealing with runaway drug costs that add billions of dollars in costs to consumers and federal health agencies, the typically expansive Gottlieb demurred by saying that drug prices weren’t the responsibility of the FDA.
“Senator, it’s true I have written a lot of things on a lot of different subjects including issues around Medicare [drug pricing],” Gottlieb said. “I think I’m coming before you for the position at FDA and I’m going to get asked my position on a lot of different subjects that fall outside FDA’s purview. I think I would be doing the agency I hope to lead no favors by wading into other territory.”
Gottlieb is technically correct that the FDA’s principal mandate is to protect the public health by ensuring the safety, efficacy, and security of human and veterinary drugs, biological products and medical devices and ensuring the safety of the country’s food supply. But as Sanders noted, the agency’s stated mission is also to make medicine “more effective, safer and more affordable.”
Gottlieb said he shared those goals, but that drew a rejoinder from Sanders, a major proponent of both drug importation and strengthening Medicare’s bargaining hand: “But your goal is, from what I’m hearing, you oppose the ideas that President Trump told he was going to do for the American people. It sounds a little strange to me.”
Gottlieb, 44, is a clinical assistant professor at New York University’s School of Medicine and a resident fellow at the conservative-leaning American Enterprise Institute (AEI).
Last year, Gottlieb complained in a post on the Brookings Institution website about what he described as “political pressure” to enact policies giving federal and state government authority to set drug prices or limit price increase. Trump and many Democrats at the time were pressing to grant Medicare the same authority that the Veterans’ Administration and Medicaid have to directly negotiate with drug companies to contain or bring down drug costs.
Gottlieb wrote that “these policies could have the unintended consequences of reducing the incentive to develop more effective drugs.”
On the issue of drug importation, Trump strongly supported that idea throughout the campaign. He recently met with Rep. Elijah E. Cummings of Maryland, the ranking Democrat on the House Oversight and Government Reform Committee, about legislation that Cummings and Sanders are promoting to allow drug importation and enhance Medicare’s drug price bargaining clout.
Gottlieb argued in a March 2016 commentary in Forbes that the added costs of regulating imported drugs would practically erase any net savings to the government. Moreover, he argued, foreign countries would have no incentive to sell cheaper drugs to the U.S. or ensure their safety.
Sanders, Sen. Patty Murray (D-WA) and other Democrats are highly suspicious of Gottlieb and his ability to be objective in regulating a prescription drug industry. Gottlieb, a one-time FDA official, has spent most of his career working as a consultant to the drug and health care industry – raising obvious questions about the potential for conflicts of interest. The New York Times recently reported that Gottlieb was paid millions of dollars in consulting fees over the years.
As a condition of his nomination, Gottlieb has promised to recuse himself for a year from any FDA decisions involving about 20 health care companies he has worked for.
During his testimony this morning before the committee chaired by Sen. Lamar Alexander (R-TN), Gottlieb suggested there were a number of things the FDA could do to spur more competition – possibly by speeding up the review of less expensive generic drugs and thwarting efforts by major drug companies to game the system by seeking anti-competitive regulatory changes
“I think this is a problem that I am uniquely suited to try to look at and solve because of my background – because I understand how companies have tried to game the process in the past,” he said.
“It’s not illegal to try to use the regulatory process to gain commercial advantage,” he added. “We should try to design policies that prevent those abuses because we don’t want to be playing ‘whack-a-mole’ with companies and going after them one by one. What I want is a framework in place that prevents those kinds of things from happening so that people can’t use the regulatory process as a commercial arbitrage to gain unfair advantages.”
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