Do As I Say, Not As I Do

August 13, 2020 10:47 am

On May 10, Patients for Affordable Drugs (P4AD), which has received at least $1.1 million from billionaire John Arnold, criticized the pharmaceutical firm Moderna for receiving a federal contract to pursue efforts to develop its COVID-19 vaccine. (A vaccine that National Institute of Allergy and Infectious Diseases Director Anthony Fauci has called “very promising.”)


Nine days later, POLITICO Pro (subscription required) reported that Phlow, a company working with CivicaRx, the nonprofit drug company bankrolled by the Arnold Foundation, received a 4-year, $354 million government contract to make drug ingredients and generic medicines. The contract includes a provision that could extend Phlow’s agreement with the U.S. government for an additional six years at a total cost of $812 million.


Civica Rx President and CEO Martin VanTrieste praised Phlow’s deal. In a press release, he said, “This partnership fits perfectly with Civica’s mission to make essential generic medications accessible and affordable. … [W]e thank the federal government for partnering with us to bring urgently needed advanced manufacturing capabilities for the production of essential generic drugs to the United States.”


While we wait for P4AD’s condemnation of Phlow, POLITICO reporter Zachary Brennan notes that Phlow is a very new company—it was only founded in January. Brennan also reveals Arnold’s and P4AD’s hypocrisy. While P4AD has accused drug companies of trying to profit off of COVID-19, Brennan reports Phlow “ran into controversy over its pricing of Evzio, an auto-injector of the opioid overdose treatment naloxone.”


Like P4AD, the Arnold-funded Institute for Clinical and Economic Review (ICER) has been busy criticizing drug companies. On May 1, it published a report outlining the price it believes Gilead should charge if its potential COVID-19 treatment, remdesivir, goes to market.


There are problems with that report, however. As reporter Sarah Karlin-Smith notes in this story, “ICER did not account for any research and development costs by Gilead in this analysis because the report assumed that Gilead has already recouped the sunk R&D costs of developing remdesivir.” (An assumption we are not certain ICER can substantiate.)


Craig Garthwaite, the director of healthcare at Northwestern University’s Kellogg School of Management, criticized ICER’s methodology. He told Karlin-Smith that, in a pandemic situation ICER is doing “opposite of what we should be doing.” In fact, “given the economic cost and disruption that we are facing” because of COVID-19, analysts should not be “doing anything right now that might make a firm worried that they'd be able to capture value for their investment.”


But John Arnold is doing everything he can to make drug companies worried—at a moment when Americans are depending on these firms to give them hope in the midst of a pandemic.

The latest estimate is that John Arnold has spent at least $60 million to influence Congress’s debate over drug-pricing legislation and to criticize drug companies. P4AD’s political arm is spending millions trying to influence U.S. elections—at the same time CivicaRx is taking taxpayer contracts.


John Arnold: do as I say, not as I do.