Drug Costs

Arnolds’ $60 Million In Gasoline Fuels Push For Reference Pricing

February 12, 2020 9:00 am

The abstract of a new paper begins, “Reference pricing has been shown to reduce drug spending in Europe and has been adopted by some employers and labor unions in the United States.” It should be no surprise that two of the paper’s authors received funding from Arnold Ventures and the Laura and John Arnold Foundation (though not necessarily for their paper).


John and Laura Arnold have bankrolled several projects that promote reference pricing, which uses average or competitors’ prices to control the cost of a product. Its current iterations include the Trump administration’s proposed international pricing index (IPI) rule and House Speaker Nancy Pelosi’s Average International Market Price.


Patients for Affordable Drugs, which has received at least $3 million from Arnold Ventures, has endorsed reference pricing. In testimony before a House committee, the organization’s leader, David Mitchell, said countries like Germany, Japan, and France that use reference pricing have higher life expectancy rates. What Mitchell did not mention, of course, is that life expectancy is driven by numerous factors, and patients in the countries he named often wait much longer than patients in the United States to get access to life-saving treatments.


Arnold Ventures also has provided nearly $200,000 the Bipartisan Policy Center to “analyze policy options related to reference pricing and patent and market exclusivity.” Additionally, a post on the Arnold Ventures website cited a 2019 study that explored “how external reference pricing works and how it could impact drug prices in Medicare Part D.” The Arnold Ventures article failed to mention that study “was funded by the Laura and John Arnold Foundation.”


On Twitter in October 2018, John Arnold himself quoted Health and Human Services Secretary Alex Azar who promised, “This reference pricing model WILL happen.” (Secretary Azar was talking about the administration’s IPI proposal.) Arnold put a “strong emphasis on ‘will’” in his post.


The administration’s proposal is not the only vehicle the Arnolds support for reference pricing. As STAT News has explained, the Arnolds generally have thrown their weight behind House Speaker Nancy Pelosi’s drug-pricing bill, H.R. 3. STAT News reported: “With John as the face of the couple’s drug-pricing advocacy, they have made their presence most felt on Pelosi’s legislation, helping to generate shifts in public opinion and pushing Congress to take up major industry overhauls. While President Trump’s aggressive stance and increasing public resentment toward drug companies have helped, the Arnolds have proven effective at pushing lawmakers ever closer to drug pricing crackdowns unthinkable just years ago.” Ben Ippolito, a health policy researcher at the American Enterprise Institute, told STAT News, “This moment is ripe for somebody like John Arnold to pour more gasoline on the fire. And he’s got a lot of gasoline.”


According to STAT News, the Arnolds already have spent at least $60 million to advance their preferred drug-pricing proposals. The paper issued this month is just the latest fuel added to the fire.