The View From the Nation’s Capital

Guest Contributor: Ted Slafsky
May 14, 2020

The nation’s view of the drug industry and its implications for 340B stakeholders

As the scientific community continues to devote unprecedented attention and resources to finding treatments and a vaccine for COVID-19, policymakers are wondering whether Americans’ attitudes towards the pharmaceutical industry will change. Last fall, Gallup reported that Big Pharma had unseated the federal government as the least-admired industry in the country – a title the government had held for eight years in a row. Gallup cited the pharmaceutical industry’s role in the opioid epidemic, as well as high drug costs and large profit margins, for its image problems.

Will COVID-19 improve the industry’s public perception? Drug company executives and pharma trade groups certainly hope so.

“The tone is different in Washington,” Gilead CEO, Daniel O’Day, said on a recent earnings call. O’Day, who made the comments a day after promising results for remdesivir were published, told investors he sees a new attitude among lawmakers. O’Day and several other pharmaceutical industry executives have made regular visits to the White House during the pandemic.

In addition to investing in treatments and potential cures for the novel coronavirus, the industry is also flooding the airwaves with ads touting its role in tackling COVID-19 and other diseases.  Will it be a game changer? I’m skeptical. While the country rightly has a new appreciation and respect for pharmaceutical innovators, I expect Americans will continue to be upset about high drug prices. In addition, the nation is learning more about the role the federal government has played in developing drugs like remdesivir. Gilead, the maker of the $1,000-per-pill, Hepatitis C drug, Sovaldi, as well as several transformative but costly HIV therapies, has its own public relations challenges.

In a Gallup survey conducted in late February, 30 percent of U.S. adults considered a candidate’s position on lowering drug costs to be “the single most important issue” or “among the most important issues” in influencing their vote in the 2020 election. Two-thirds of respondents said prescription drug prices have increased since the Trump administration took office. A remarkable 75 percent – including 72 percent of Republicans – want the Senate to vote on H.R. 3, House Speaker Pelosi’s bill to allow the government to negotiate drug prices for Medicare beneficiaries.

The likelihood of any national action on drug prices remains remote, especially before the November elections. Nonetheless, I am confident that concerns over drug pricing will continue to be a potent electoral issue. We are all well aware of patients who have skipped their drug treatment or have rationed their medications. According to recent research by Gallup and the non-profit research group, West Health, 23 percent of U.S. adults report they have had at least one instance in the past year when they have not had enough money to pay for needed prescriptions. Thirteen percent say that within the past five years, they’ve had a friend or family member pass away after not being able to pay for needed medical treatment. As we face the worst unemployment crisis since the Great Depression, combined with a dramatic increase in the uninsured and underinsured, concerns over affordable health care will only become more acute.

What does this mean for 340B stakeholders? In the short term, this could harden the administration’s position on Medicare Part B reimbursement cuts to hospitals. U.S. Health and Human Services Secretary, Alex Azar, and Centers for Medicare & Medicaid Services (CMS) Administrator, Seema Verma, have repeatedly touted the policy as one of the administration’s big wins on drug pricing. While many of us realize that these cuts are misguided and are actually harmful to patient care, we should not expect a reversal – even if the U.S. Circuit Court of Appeals for the District of Columbia affirms the lower court’s finding that the cuts were illegal. CMS has already stated its ongoing drug acquisition cost collection effort is intended as a backstop in case the agency loses in court.

Nonetheless, the importance of safety net providers and the 340B program could not be more evident than it is today. I am pleased to see that a bipartisan group of more than 100 members of the House of Representatives just went to bat for the 340B program, and we have seen new 340B champions emerge in the Senate. The 340B provider community is now receiving the heroic status that they have always deserved. Your efforts to serve our most vulnerable during this pandemic will leave an indelible mark that will have long-term benefits for patients and for the country as a whole.



Other “View From the Nation’s Capital” Posts from Mr. Slafsky: 

COVID-19’s Impact on the 340B Community: Every Cloud Has a Silver Lining – April 2020
Coronavirus Likely to Sideline 2020 Policy Changes for Prescription Pricing and 340B – March 2020
Four Key Takeaways from the 340B Coalition Annual Winter Conference – February 2020
Time to Step Up Your Efforts at the State Level – January 2020
Pro-340B Group Gains Momentum with Grassroots Tactics – December 2019

Ted Slafsky, a leading pharmaceutical policy thought leader, is Publisher & CEO of 340B Report, the first and only independent news service covering the federal 340B drug pricing program.  He is also Founder & Principal of Wexford Solutions, a Washington, D.C. based firm that provides government relations, communications, and business development services. You can follow Mr. Slafsky on Twitter at @tslafsky or reach him at [email protected] or (703) 517-1325.


About 340B Report:

340B Report is the only independent news service that provides breaking news and analysis about the federal 340B Drug Pricing Program. We follow all 340B program developments big and small—in federal government agencies, Congress, courts, the states, associations, the private sector, academia, and more.