Grogan Was in Position to Potentially Benefit Former Employer, Gilead Sciences
Despite Questions About Ethics Obligations, Grogan’s Influence in Administration Has Continued to Expand
Washington D.C. — Democracy Forward filed suit against the Office of Management and Budget and the Centers for Medicare & Medicaid Services for refusing to release documents that could shed light on whether senior White House official Joseph Grogan violated ethics laws by working on a drug pricing project of significant financial interest to his former employer. The suit follows Freedom of Information Act requests filed with OMB and CMS in February 2019. Grogan, who worked as Head of Federal Affairs for Gilead Sciences, Inc. before entering the Trump administration, was elevated in February 2019 from Associate Director of Health Programs at OMB to his current post as the Director of the Domestic Policy Council. In this new role, Grogan has had tremendous influence over policy decisions affecting the healthcare choices and costs for millions of Americans, and was reportedly among the most strident voices pushing the administration to support a Texas-led lawsuit that seeks to overturn the ACA in its entirety.
Emails previously obtained by Democracy Forward show that Grogan worked with drugmaker Novartis to develop a potentially lucrative drug pricing pilot program for CAR-T therapy, a specialized cancer treatment. According to those emails, Grogan ultimately recused himself from that project, but did so after doing substantial work on the arrangement and only after Gilead publicly announced its acquisition of Kite Pharma and its competitor CAR-T therapy to that developed by Novartis. Gilead had been working to enter the CAR-T market for more than a year, raising questions about whether Grogan should have been working on the CAR-T pricing demonstration project at all. In April 2019, the federal government proposed raising the reimbursement rate for CAR-T therapy by $56,000, which would generate an approximately $110 million increase in payments for CAR-T therapies in 2020, a major windfall for Gilead. As of July 2019, the proposed national coverage determination for CAR-T therapies has not yet gone into effect.
“President Trump keeps promoting this former pharma lobbyist even as questions about potential ethical conflicts continue to go unanswered and drug prices continue to rise,” said Charisma Troiano, Democracy Forward Press Secretary.
In July 2018, Democracy Forward filed a complaint with the Office of Government Ethics requesting an investigation into Grogan’s role in the project. And the records Democracy Forward uncovered through its prior FOIA work prompted Representative Elijah Cummings, now Chair of the House Committee on Oversight and Reform, to submit a letter requesting documents regarding what he described as Grogan’s apparent conflict of interest in the CAR-T matter.
More recently, Gilead has been ensnared in controversy for not paying royalties on the government-held patent of the anti-HIV medicine Truvada, for which it charges between $1,600 and $2,000 for a single month’s supply. While the Trump administration has opened a review, it has not taken any substantive action to defend its patent and drive down the cost of this drug. Following public pressure, Gilead announced it would allow the sale of a generic replacement, but will continue to profit for 15 months. President Trump previously called the cost of medicine “outrageous,” but under his administration prices have only continued to climb. A recent report found that in a stretch of 2018, there were almost 100 times more price hikes than price cuts for pharmaceutical products.
The FOIA requests were filed in February 2019. In response to the government’s failure to produce responsive documents, Democracy Forward filed suit on July 18, 2019.
Democracy Forward is a nonprofit legal organization that scrutinizes Executive Branch activity across policy areas, represents clients in litigation to challenge unlawful actions, and educates the public when the White House or federal agencies break the law.