CHC News

Kamp Commentary: Pricing Issues Take Center Stage in D.C.

May 23, 2017 — By Coalition for Healthcare Communication Executive Director John Kamp


Participants at last week’s Coalition for Healthcare Communication Rising Leaders Conference on Healthcare Policy in D.C. heard much about the possibility of price controls on our client’s products but did not find broad consensus on whether they might happen and what form they might take.

The stakes are high, not just for life sciences companies, but also for all types of medical marketers and media. Consider, for example, the recent IMS study of pharma profits in 2016 showing that increased profits did not come from new products but from price increases during that period. If pricing flexibility is constrained, drug company spending on marketing, media and sales support will also follow suit.

Virtually every speaker at the meeting addressed price pressures, from Jon Bigelow, meeting chairman, in his opening, to yours truly near the closing. Although no one would discount the possibility of some controls, the most startling prediction came from the usually restrained voice of Kate Rawson, senior editor at Prevision Policy and the RPM Report.

Rawson reviewed both the multiple, staggering efforts of House Republicans to pass legislation that would “Repeal and Replace” ObamaCare and the difficulties of passing a similar bill in the Senate that would in turn survive a House-Senate Conference committee. She then outlined the many Democratic as well as Republican efforts to reduce drug prices.

Rawson concluded by noting that it may well be easier for Congress to pass bipartisan price control legislation than to garner Republican agreement on ObamaCare. Wouldn’t that be a stunner!

Notably, Mit Spears, formerly general counsel of both the FTC and PhRMA, disagreed, not so much because he believed health care reform would be easy for Republicans, but because there are many ways the administration can lower drug spending without legislation. Indeed, he pointed to several FTC anti-trust tools as well as various HHS/FDA techniques that could reign in pricing (and profitability).

Summarizing this disagreement later, I admitted that I didn’t know which view was correct, but that it may not matter. With or without legislation, pricing pressures are great right now and increasing. Government will do what it will — in Congress, at HHS, at FDA and maybe in a few states — but the public shaming and purchasing pressures that are already working will increase, not decrease, no matter what.

So, there you have it. Lively discussion on the various ways pricing controls may play out, but little disagreement on the bottom line – pricing pressures are here and may well increase. If you missed the conference, you missed the lively give and take, but you can still review the slide decks, available here: (bigelow), (o’brien), (rawson), and (kamp).

Stay tuned on this one. It is an important issue with potentially dire ramifications.