Drug Costs

Legislation in Massachusetts Supported by Arnold-Funded Organization Would Benefit Arnold-Funded Organization

June 7, 2019 8:54 am

The Boston Globe reported this week that Patients for Affordable Drugs Now will spend “hundreds of thousands of dollars to sway lawmakers” to support legislation that would allow Massachusetts to negotiate Medicaid drug prices. The group plans to “sway lawmakers” by buying social media and television ads in Boston, one of the nation’s most expensive media markets. 


Former Enron and hedge fund executive John Arnold and his wife are the funders behind Patients for Affordable Drugs Now. As we’ve noted before, the Arnolds already have spent hundreds of thousands of dollars to “sway lawmakers” in other states to support other proposals related to the cost of prescription drugs.  


The Massachusetts state House and Senate each have passed legislation to allow price negotiation and are now trying to reconcile their two versions of the bill. (According to its ad, Patients for Affordable Drugs Now supports the Senate version of the legislation.) If a compromise is reached, and the bill makes it to Gov. Charlie Baker’s (R-Mass.) desk, he is expected to sign it. 


But does Massachusetts need this measure?


In its press release announcing its ad buy, Patients for Affordable Drugs cites a Kaiser Family Foundation poll that claims voters support the organization’s position. It is worth reminding the group, however, that a Kaiser Family Foundation poll released in February found three-quarters of respondents who are currently taking prescription drugs said affording their medicines is “easy.” For individuals who take between one and three medications, that number was 83 percent. 


Patients for Affordable Drugs Now would not tell The Globeexactly how much it will spend on its ad buy, but it is instructive to remember the group’s political action committee spent $500,000 to “boost” Gov. Baker’s reelection campaign in 2018. 


It also is notable that the Senate version of the legislation contains a provision that would allow the state to use an independent third party to determine the value of a drug. Conveniently enough, this portion of the bill potentially could benefit the Institute for Clinical and Economic Review (ICER), another Arnold-funded entity. 


ICER, which also receives a significant amount of funding from the health insurance industry, offers pricing recommendations and evaluations to pharmacy benefit managers; government officials who oversee Medicare, Medicaid, and other health care programs; and others in the health care ecosystem.  


While insurers love ICER’s model since it often underestimates the value (and therefore cost) of a drug, advocacy groups strongly oppose its methods. 


When CVS Caremark announced last fall announced it would use data from ICER to set prices, nearly 100 patient advocate groups, physicians and organizations representing individuals with disabilities sent a letter to CEO Larry Merlo arguing ICER’s analysis “discriminates against the chronically ill, the elderly and people with disabilities” by “using algorithms that calculate their lives as ‘worth less’ than people who are younger or non-disabled.”


An April 2018 report by the Alliance for Patient Access (APA) argued ICER’s models should not be relied upon because the organization doesn’t take into account patient diversity, comorbidities or the severity of the illness or medical condition from which the patient is suffering.


What’s more, Gov. Baker’s plan is a direct shot at one of his own state’s thriving industries. The biopharmaceutical sector in Massachusetts employed nearly 70,000 people in 2017, according to the most recent industry snapshot from MassBIO. Massachusetts ranks right behind California with the second-most employees engaged in research and development, and the state significantly outpaces the nation as a whole when it comes to biopharma manufacturing. We don’t expect the folks at P4AD to care much about those workers, but Gov. Baker should.


This Arnold-funded ad campaign supports legislation that will harm patients, as well as the Massachusetts economy, only boost ICER’s profile. The Massachusetts state House and Senate shouldn’t reconcile their two bills. They should toss them out completely.