Sidebar

Trump Is Keeping Drug Prices High and Pharma Companies Rich

President Trump talks a lot about skyrocketing drug prices. He talks less about the pharma executives he’s appointed and the policies he’s pushed to keep drug companies rich.

—Trump’s making it harder for whistleblowers to sue drug companies for overcharging and his HHS Secretary’s former company stands to benefit.

When a whistleblower believes a company has defrauded the government (think: drug maker overcharging Medicaid) she can sue and receive part of the money recovered. Historically, the Department of Justice would investigate and then typically either participate in the suit or let a whistleblower go at it alone. But, according to a leaked memo, Trump’s DOJ is changing course, and encouraging prosecutors to try to block certain suits from being heard by a judge at all. That’s welcome news for pharma giants: Between 2000 and 2010, pharmaceutical cases accounted for at least 25 percent of all fraud payouts under the False Claims Act. In 2017 alone, whistleblower settlements and judgments from the healthcare industry topped $2.4 billion.

SIDEBAR: Secretary of Health and Human Services Alex Azar’s former employer, Eli Lilly, could be a top beneficiary of the new policy. A study of whistleblower claims found that only four companies — GlaxoSmithKline, Pfizer, Schering-Plough, Eli Lilly — accounted for more than half of all financial penalties paid by pharma companies. One example: In 2009, Eli Lilly agreed to pay $800 million to settle whistleblower suits after the company illegally marketed the drug Zyprexa.

—He illegally rolled back a rule penalizing drug makers from price gouging after hiring a pharma executive who previously lobbied on the issue.

The anti-price gouging rule would have fined drug makers for knowingly overcharging a program providing low cost medication to rural health centers, children’s hospitals, and other public health providers. It was set to take effect in March 2017. But Trump delayed the rule after hiring Joe Grogan to run White House drug policy. Grogan was the chief lobbyist for pharma giant Gilead Sciences, a company that was subject to  price gouging investigations. And he personally lobbied on the program until as late as March 2017.

SIDEBAR: Trump didn’t just hurt patients, he violated federal law. In a blatant attempt to circumvent the Administrative Procedure Act, the Administration has now delayed the rule five times rather than going through the required process for repealing rules. Unlawfully delaying rules at the behest of large corporations is a common practice in the Trump Administration, even though federal courts have overturned multiple attempts to do so.

—He illegally cut funding hospitals use to provide opioid addiction medication.

In November 2017, Trump dramatically cut Medicare reimbursements that health care facilities use to provide low-income patients access to medications. In addition to being unlawful, Trump’s actions undermine efforts to make addiction treatment accessible by threatening programs that allow hospitals like Boston Medical Center to distribute Naloxone opioid rescue kits. Leading the White House effort: Joe Grogan, whose former company stands to benefit from the opioid epidemic given it manufactures drugs to treat infections associated with opioid abuse.

SIDEBAR: It’s not the only way Trump is making treatment for opioid addiction less accessible. In April, he finalized a rule that gives states further leeway to designate what minimum essential health benefits insurers must cover, opening the door for insurers to offer plans that do not cover substance abuse treatment.

Stay in touch