Politics, Pricing

VIP Clinton supporter pitched campaign chief Podesta on Canadian price controls for the US

Perhaps this pitch didn’t go very far in the Hillary Clinton campaign, but the exchange between John Podesta and Michael Granoff, a backer who helped with the 1992 presidential transition team for Bill Clinton, does help illustrate some of the ideas that are being kicked around by senior staffers for controlling drug prices.

In a new hacked email exchange released by WikiLeaks, Granoff — who runs Pomona Capital — made a remarkable proposal built on what he called the “Most Favored Nation” concept.

Granoff:

Hi John.   Quick idea for you.  HRC needs to come up w proposals on health care for example that are somewhere between long policy lists and sanders sound bites.  Prescription drug prices are something everyone gets. What if she proposed a Most Favored Nation status for Medicare and Medicaid on prescription drugs.  It would lower drug prices markedly, would introduce fairness, not be unfair to pharma companies as they have already agreed to different prices just not for Americans and be instantly understandable to everyone.  Day one first bill. MFN for prescription drugs.

Podesta:

What does that mean? Medicare and Medicaid get the lowest price offered to anyone?

Granoff: 

Yes if pharma co agrees to sell drug a to Canada for x then we pay x.  Whatever the lowest price they have agreed to sell is.  Most Favored Nation concept.   Hard for pharma to complain too much as it is their price to someone else.  Differences are dramatic.  Would also be easily understandable sound bite.

There’s no doubt that any discussion involving Canadian price controls for the US programs would trigger a toxic reaction in the executive ranks of biopharma, where routine price hikes on aging drugs have been a routine practice for years. Medicare is forbidden by law from negotiating drug prices (though they are restricted to paying no more than average wholesale cost). And other payers tend to follow their model on rates. But as the backlash against drug prices continues to play out in Washington, DC, the possibility of some kind of price restriction is becoming far more tangible than in previous debates.

Swearing off those price hikes, as some are beginning to do now, may not be enough.


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