The Arnolds Start a Podcast … And Get A Lot Wrong

May 1, 2019 12:56 pm

Billionaires John and Laura Arnold have been busy this week. Not only did Patients for Affordable Drugs, an Arnold-funded group, hold a briefing on Capitol Hill, Laura Arnold launched a podcast where she and her guest, David Mitchell from Patients for Affordable Drugs, ran through almost all the couple’s favorite talking points.


We’ve addressed most of these arguments in previous posts, and will do so again here. After all, they bear repeating until the facts of this debate are widely known.


First, let’s tackle the argument that permeates the entire podcast: that drug prices are rising.


As we note here, overall spending on prescription drugs grew by less than 1 percent in 2017. Once rebates and other discounts were accounted for, patients spent 2.2 percent less per-capita on their medicine that year. Since 2008, per-capita spending has only increased by 1 percent annually.


Laura Arnold also brought up the couples’ old trope about secondary patents. Tahir Amin, co-founder of I-MAK, a group that has received millions of dollars from the Arnolds, generally has been the one carrying the couple’s water on this issue. After Amin appeared earlier this year on NBC, we explained secondary patents improve old drugs – either through improved safety, or outcomes. (Click here for more on the secondary patent issue.)


In the podcast interview, Mitchell also alleged taxpayers are “footing the bill” for drug innovation. While research at the National Institutes of Health and other government entities is incredibly important, to leave the impression that drug companies aren’t shouldering their fair share of research and development is irresponsible.


As we noted here, according to a 2017 report, pharmaceutical companies spent $71.4 billion on R&D that year, a record amount. BioPharma DIVE explained, “R&D spending was up in not only absolute terms as total spending, but also in relative terms as percentage of total sales. Proportionally, companies spent 21.4 percent of total sales on R&D.” In a June 2018 Forbes column, PureTech Ventures Senior Partner John LaMattina noted internal pharmaceutical company R&D investment historically “has been relatively high … higher than any other industry,” running about “15 percent of top line revenues.”


Arnold and Mitchell also brought up the notion of “value.” The Arnolds and the groups that they bankroll have been pushing this part of the conversation in several state legislatures. Indeed, Inside Health Policy notes the Arnolds are the lobbying force behind legislation that has been passed in Maryland and that is being considered in Massachusetts.


The Arnolds are using a group called the Action Now Initiative to advance their efforts, which include advocating for “affordability review boards.” In Maryland, Patients for Affordable Drugs Now, David Mitchell’s Arnold-funded group, “ran digital ads … calling for Gov. Larry Hogan (R) to sign the state legislature’s affordability review board bill.”


These affordability boards mirror the model deployed by the Institute for Clinical and Economic Review (ICER). As we noted here, ICER receives almost 80 percent of its funding from private foundations, including the Laura and John Arnold Foundation. It also has received funding from health insurance companies. And, as we noted here, patient advocacy groups detest the model, which they say discriminates against the elderly and disabled.


Inside Health Policy asked how much money Arnold groups have provided to push state legislation, but the groups affiliated with the Arnolds “declined to provide details.” (The Arnolds don’t publish details of this giving either.) IHP does manage to name the other groups that, in addition to Patients for Affordable Drugs and ICER, have benefitted from the Arnolds’ largesse. These include:

 - Memorial Sloan Kettering Drug Pricing Lab;

 - Maryland Citizens’ Health Initiative;

 - Kaiser Health News; and

 - The Alliance for Health Policy.


Busy indeed.