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Drug makers go on the offensive over high prices
By Rebecca Robbins
STAT

SAN FRANCISCO — Drug makers are sick and tired of coming under attack for high prices.

And they’re spending tens of millions to try to make it stop.

“We’re under unprecedented pressure because there really is profound misunderstanding out there,’’ Acorda Therapeutics chief executive Ron Cohen, chairman of the Biotechnology Innovation Organization, told a gathering at the conference here this week.

“Together we’re going to fight back, and we’re going to win,’’ said Jim Greenwood, BIO chief executive.

Bills that would have required drug companies to justify, explain, or even cap their prices have faltered in about a dozen states in recent months. Last week, however, brought two blows to the industry: Vermont Governor Peter Shumlin signed a law that requires drug makers to justify price hikes, and similar legislation passed the California Senate.

Meanwhile, the industry is girding for another fight in California this November over a ballot measure that seeks to cap some drug prices. A similar measure is in the works in Ohio. The industry fears such ballot measures could pop up elsewhere.

But drug makers aren’t responding by cutting prices — or even by keeping them stable.

Pfizer just hiked its drug prices by an average of nearly 9 percent. That’s on top of a 10 percent hike just six months ago.

Both Johnson & Johnson and Amgen have boosted the price of rheumatoid arthritis drugs by nearly 30 percent in the past year and a half. Biogen raised the cost of a multiple sclerosis drug by 18 percent. Overall, list prices for brand-name medicines sold in the United States climbed more than 14 percent last year, according to Truveris, a market research firm.

Greenwood didn’t address that issue in his speech at BIO, beyond saying drug prices “aren’t rising nearly as fast’’ as insurance deductibles and co-pays. The drug industry, he said, had become an “easy scapegoat.’’ Among its remedies: Opening a “rapid response shop in Washington to beat back misinformation.’’

It’s looking beyond D.C. politics, too: BIO Monday released an open letter urging Californians to “reject scare tactics’’ by voting against the pending ballot measure, which mandates that state-funded programs pay no more for prescription drugs than the US Department of Veterans Affairs.

Foes of the measure have amassed a war chest of about $68 million, much of it from drug companies, including Merck and Pfizer.

In Ohio, the industry is going to court to try to block a similar referendum from reaching the ballot. (The ballot measures in both states are being pushed by the AIDS Healthcare Foundation, a Los Angeles group.) The antireferendum effort is being funded in part by Pharmaceutical Research and Manufacturers of America, or PhRMA,the trade group for the pharmaceutical industry.

Meanwhile, the California Life Sciences Association is leading a campaign to derail the bill that just passed the state Senate; it would require drug companies to explain and justify price increases. The group is running ads on Facebook and Twitter, warning it would create so much red tape that companies wouldn’t be able to focus on developing treatments.

“Don’t sacrifice Californians’ access to miracles,’’ one ad pleads. “Don’t abandon the moonshot to cure cancer,’’ another argues.

Drug companies also have their hands full elsewhere. Massachusetts Attorney General Maura Healey has threatened legal action against Gilead Sciences over the high prices of its hepatitis C medications, which cure most patients but carry list prices of at least $84,000 for a full treatment. Gilead, a California company, has since joined the Massachusetts Biotechnology Council, which is discussing the issue with the attorney general, according to Mass Bio Executive Vice President Sarah MacDonald.

There has also been plenty of pressure coming from presidential candidates and federal lawmakers, most recently from senators asking drug makers to explain pricing for a drug used to reverse opioid and heroin overdoses.

Beyond the state fights, drug companies and their trade groups have launched a broader bid to improve the industry’s image.

The PR push includes an unusual element: Acknowledging that the industry fails. A lot.

Greenwood, the BIO CEO, called for supporters to emphasize that developing drugs is long, hard and expensive: “We will remind elected officials that, despite the rhetoric on drug prices, just 1 out of 10 biotech companies actually turns a profit. We’ll remind them that 90 percent of biotech clinical research goes toward projects that ultimately fail.’’

For the public at large, the PR message will focus on the fraction of projects that do succeed. BIO recent digital ad campaign touts the power of drugs to extend patients’ lives. The emotional “Time is Precious’’ spot features grateful patients embracing loved ones.

BioOhio CEO John F. Lewis Jr. said his group has been playing the spot at events across Ohio.

The industry is also reviving a tried-and-true tactic: Blaming insurance companies for the high out-of-pocket costs that many consumers face when buying drugs.

“We’re not going to let our industry be tarnished by insurance practices that burden patients with unaffordable costs,’’ Greenwood said.

Insurers don’t take kindly to the drug industry’s rhetoric.

“Rather than actually engaging around a tangible solution, it’s not surprising that the pharmaceutical industry would choose to launch another PR campaign that will do little to address the root of the problem — which is their own egregious pricing,’’ said Clare Krusing, spokeswoman for America’s Health Insurance Plans.

Dylan Scott contributed to this report. Rebecca Robbins can be reached at rebecca.robbins@stat-news.com. Follow her on Twitter @RebeccaDRobbins. Follow Stat on Twitter: @statnews.