5 Reasons Why Obama Was Pharma’s BFF
During President Obama’s tenure, Big Pharma enjoyed one of their best stock market runs in history. In fact, the Pharma Stock ETF (XPH) below more than tripled during the Obamacare run. It wasn’t until politicians like Hillary Clinton, Bernie Sanders, and President Elect Trump started to bring focus to out of control drug pricing that the sector saw pressure during the end of Obama’s 2nd term.
It wasn’t just the remarkable stock returns that helped Pharma and Obama become BFFs, it was a tremendous grab of power during the Obama Administration which helped seal this wonderful friendship.
1. Obamacare was an incredible deal — For Big Pharma
Since Obamacare became law in 2008, media outlets from both sides of the political spectrum have reported on the incredible deal that Obama made for Pharma to pass the Affordable Care Act, aka Obamacare.
In the article above, the Huffington Post notes that the Big Pharma Lobby group, PHRMA, and Obama’s White House concocted the following deal as outlined in a leaked internal memo:
Commitment of up to $80 billion, but not more than $80 billion.
1. Agree to increase of Medicaid rebate from 15.1–23.1% ($34 billion)
2. Agree to get FOBs done (but no agreement on details — express disagreement on data exclusivity which both sides say does not affect the score of the legislation.) ($9 billion)
3. Sell drugs to patients in the donut hole at 50% discount ($25 billion)
This totals $68 billion4. Companies will be assessed a tax or fee that will score at $12 billion. There was no agreement as to how or on what this tax/fee will be based.
Total: $80 billion
In exchange for these items, the White House agreed to:
1. Oppose importation
2. Oppose rebates in Medicare Part D
3. Oppose repeal of non-interference
4. Oppose opening Medicare Part B
So basically, Pharma companies collectively agreed to an $80 Billion investment in Obamacare, and in return received pricing protection for their drugs via the last 4 points above.
The Huffington Post article further confirmed the terms of the above deal via reporting from the articles below:
So who got the better end of this deal?
Just check out the headlines below:
2. Obama’s Court Pick Made the FDA Impotent against Pharma
Many people don't realize the radical developments impacting their health care vis a vis the courts. Obama’s left leaning judicial picks have created an environment ripe for aggressive action by the wealthy pharma industry and their top tier law firms. Perhaps Obama’s pick, Judge Denny Chin from NY was the greatest gift to Big Pharma.
As reported in the NY Times article above, a 2-to-1 decision by a three-judge panel of the Court of Appeals for the Second Circuit in Manhattan resulted in a landmark foundational change in our health care system. This court ruled that a pharmaceutical rep had a First Amendment right to discuss off-label information with a doctor, and therefore threw out his conviction for off-label marketing to a physician government informant. Obama’s judicial pick, Denny Chin, was a key part of this incredible ruling. Coincidentally, this judge is also married to a high profile NY attorney in the practice of law related to health care.
The lone dissenting judge had some ominous words regarding this ruling (as reported in the NY Times article above).
The lone dissenting judge, Judge Debra Ann Livingston, vigorously disagreed, arguing that by throwing out Mr. Caronia’s conviction “the majority calls into question the very foundations of our century-old system of drug regulation.” She argued that if drug companies “were allowed to promote F.D.A.-approved drugs for nonapproved uses, they would have little incentive to seek F.D.A. approval for those uses.”
So how important was this ruling? Actually, the ruling, also known as Caronia, emboldened Pharma. Shortly after the ruling, Pharma used this case to defend their actions of off-label promotion.
After the FDA had sent a Pharma company, Amarin, a letter for their off-label promotion of a drug, the company sued the FDA on First Amendment grounds…and the FDA settled with the company, and allowed them to continue with their off-label marketing practices.
From the legal blog above, the FDA capitulated as follows:
Now, in an unusual move that appears intended to head-off the lawsuit, the FDA has written a letter to Amarin stating that the marketing materials the drug maker proposes to distribute to doctors would not concern the FDA. The June 5, 2015 letter signed by Janet Woodcock, the director of the FDA’s Center for Drug Evaluation and Research, states that under the circumstances presented, the FDA would not object to Amarin’s dissemination of clinical trial results related to unapproved uses of Vascepa, nor consider their distribution to be evidence of “intended use.”
Below are more articles reviewing this powerful Caronia court decision and the Amarin escapade by the FDA:
3. Obama’s FDA is a Revolving Door for Big Pharma
So, based on the Caronia Decision above, and the Amarin settlement, the FDA has really become quite impotent in enforcing drug promotion once the pharma product is on the market. So what about initial drug approvals? Surely the FDA has some power in this matter?
Well, thanks to Obama, the FDA is riddled with Pharma revolving door hires and potential conflicts of interest. Let’s start with the top, the FDA Commissioners:
Dr. Robert Califf, the current FDA commissioner has been a controversial pick from the start. He’s had many business dealings with pharma via his disclosures.
In fact, even Hillary’s camp had some questions regarding Obama’s recent FDA commisioner as reported in the article below:
The FDA Commissioner prior to Califf was Margaret Hamburg for 6 years. Hamburg stepped down in 2015, according to the NY Times article below because as she stated “It was time.”
Shortly after stepping down, Hamburg was the focus of a RICO lawsuit filed by the founder of Judicial Watch. It appears that Hamburg’s husband was a key figure in one of the world’s largest hedge funds. The Hedge fund made hundreds of millions of dollars in Biotech and Pharma related trades during Hamburg’s reign at the FDA. The Lawsuit alleges that Hamburg suppressed information to benefit the hedge fund trades related to Johnson and Johnson.
As if ties to Big Pharma at the Commisioner Level weren’t bad enough, the FDA also has a big problem with the revolving door of its reviewers. These are the people responsible for reviewing a Pharma company’s submission of a product for FDA approval. In the TIME article below, the article cites a paper by Dr. Vinay Prasad and Jeffrey Bien which looked at this revolving door issue in the hematology/oncology FDA approval processes.
As the article reports:
The researchers found that among 55 people who worked as haematology-oncology medical reviewers from 2001 to 2010, 27 continued in their roles at the FDA, two people worked at the FDA but held other appointments, and 15 left the FDA to work with or consult for the biopharmaceutical industry. The jobs of the rest of the people could not be determined.
Glad to see that Big Pharma is so supportive of our government bureaucrats!
Below are more articles regarding the revolving door and Obama’s FDA:
4. Obama’s DOJ is a Revolving Door for Big Pharma Law Firms
Under Obama’s leadership, the Department of Justice has lost many of their talented prosecutors to Big Pharma Law Firms. One of the biggest turncoats, was Michael Loucks. As reported in Forbes below, and various other media outlets, Loucks was one of the most effective attorneys in the DOJ.
According to the Forbes article above:
At Skadden Arps — Loucks’s new home — the average partner earns over 2 million dollars, with the highest-compensated partners now earning five times their lesser-paid peers’ remuneration. Why would a firm like Skadden pay a man like Loucks millions a year? Simple. Loucks used to be the government’s top prosecutor of many of Skadden’s clients. Now, the man who only two years ago extracted 2.3 billion dollars from Pfizer on behalf of the government, will become Pfizer’s very own advocate. It’s the classic case of “if you can’t beat ’em, join ‘em” or, in this case, “if they keep beating you, pay ‘em.”
In fact, Loucks was a bit cavalier in his move to a white collar defense firm, comparing himself to a NY Yankee Superstar.
As reported in the above NY Time article, Loucks’ view of his move represents a very mercenary approach to law:
For his part, Mr. Loucks uses a baseball reference. Johnny Damon left his beloved Boston Red Sox in late 2005 to sign with “the evil empire, the New York Yankees,” Mr. Loucks said. Both teams won World Series with help from Mr. Damon.
Asked whether the “evil empire” analogy fit the Justice Department or Skadden, Mr. Loucks said, “One man’s evil empire is another’s home team.”
As noted in the articles below, there were multiple other turncoats from the Department of Justice to Big Pharma’s defense firms under Obama’s leadership:
As mentioned in the article above, Obama appointed an attorney from his former Law Firm, Sidley Austin to head the Office of Legal Council at the DOJ. Thus, demonstrating the revolving door!
5. Obama Rewarded His Big Pharma Friends!
One of the highest profile CEO’s in Biotech history has been Art Levinson, the former CEO of Genentech. Despite an ongoing DOJ investigation into Levinson’s former Biotech firm at the time, Obama awarded Art Levinson with the National Medal of Technology in 2014.
Obama also rewarded Big Pharma’s Law Firm Sidley Austin’s partner Newt Minow with the National Medal of Freedom in 2016. Minow’s firm has done very well with Obama in office. Maybe the DOJ defections to their law firm in support of Big Pharma helped out? Why wouldn't their partner deserve an award? Maybe they have an award waiting for Obama later this month?
