Politics and Money

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just take a look at what the scum Big Pharma's are doing to justify high prescription prices =====>

Big Pharma Quietly Enlists Leading Professors to Justify $1,000-Per-Day Drugs
by Annie Waldman
ProPublica, Feb. 23, 2017, 9 a.m.

As it readies for battle with President Trump over drug prices, the pharmaceutical industry is deploying economists and health care experts from the nation’s top universities. In scholarly articles, blogs and conferences, they lend their prestige to the lobbying blitz, without always disclosing their corporate ties.

Over the last three years, pharmaceutical companies have mounted a public relations blitz to tout new cures for the hepatitis C virus and persuade insurers, including government programs such as Medicare and Medicaid, to cover the costs. That isn’t an easy sell, because the price of the treatments ranges from $40,000 to $94,000 — or, because the treatments take three months, as much as $1,000 per day.

To persuade payers and the public, the industry has deployed a potent new ally, a company whose marquee figures are leading economists and health care experts at the nation’s top universities. The company, Precision Health Economics, consults for three leading makers of new hepatitis C treatments: Gilead, Bristol-Myers Squibb, and AbbVie. When AbbVie funded a special issue of the American Journal of Managed Care on hepatitis C research, current or former associates of Precision Health Economics wrote half of the issue. A Stanford professor who had previously consulted for the firm served as guest editor-in-chief.

At a congressional briefing last May on hepatitis C, three of the four panelists were current or former Precision Health Economics consultants. One was the firm’s co-founder, Darius Lakdawalla, a University of Southern California professor.

“The returns to society actually exist even at the high prices,” Lakdawalla assured the audience of congressional staffers and health policymakers. “Some people who are just looking at the problem as a pure cost-effectiveness problem said some of these prices in some ways are too low.”

Even as drug prices have come under fierce attack by everyone from consumer advocates to President Donald Trump, insurers and public health programs have kept right on shelling out billions for the new hepatitis C treatments, just as Precision Health Economics’ experts have urged them. With a battle looming between the industry and Trump, who has accused manufacturers of “getting away with murder” and vowed to “bring down” prices, the prestige and credibility of the distinguished academics who moonlight for Precision Health Economics could play a crucial role in the industry’s multipronged push to sway public and congressional opinion.

While collaboration between higher education and industry is hardly unusual, the professors at Precision Health Economics have taken it to the next level, sharpening the conflicts between their scholarly and commercial roles, which they don’t always disclose. Their activities illustrate the growing influence of academics-for-hire in shaping the national debate on issues from climate change to antitrust policy, which ultimately affect the quality of life and the household budgets of ordinary Americans — including what they pay for critical medications.

The pharmaceutical industry is digging in, with one of its trade groups raising an additional $100 million for its “war chest.” For years, it has spent millions of dollars lobbying politicians, hoping to enlist their support on a wide range of legislation. It has similarly wooed doctors, seeking to influence what they research, teach and prescribe. Now, it’s courting health economists.

“This is just an extension of the way that the drug industry has been involved in every phase of medical education and medical research,” said Harvard Medical School professor Eric G. Campbell, who studies medical conflicts of interest. “They are using this group of economists it appears to provide data in high-profile journals to have a positive impact on policy.”

The firm participates in many aspects of a drug’s launch, both advising on “pricing strategies” and then demonstrating the value of a drug once it comes on the market, according to its brochure. “Led by professors at elite research universities,” the group boasts of a range of valuable services it has delivered to clients, including generating “academic publications in the world’s leading research journals” and helping to lead “formal public debates in prestigious, closely watched forums.”

Precision Health Economics may be well-positioned to influence the Trump administration. Tomas Philipson, an economist at the University of Chicago and the third co-founder of Precision Health Economics, reportedly served briefly as a senior health care adviser for the Trump transition team. He did not respond to requests for comment. Dr. Scott Gottlieb, reported to be a candidate for commissioner of the Food and Drug Administration, is a clinical assistant professor at New York University School of Medicine and a former “academic affiliate” of Precision Health Economics, according to its website.

Although it’s hard to gauge the firm’s precise impact, associates of Precision Health Economics have often waded into the political fray. Last fall, big pharma spent more than $100 million successfully defeating a California referendum that would have controlled the prices of both generic and name-brand drugs. Testifying in September at a state Senate hearing on a generic drug, co-founder Goldman steered the discussion to name-brand drugs, such as the hepatitis C treatments, arguing that their prices should not be regulated.

“We have to ensure access to future innovation, and that’s going to require some recognition that if someone develops an innovative drug, they’re going to charge a lot for it,” Goldman said.

Prescription drugs on average cost more than twice as much in the U.S. as in other developed nations. That’s mostly due to name-brand drugs. They represent 10 percent of all prescriptions but account for almost three-quarters of the total amount spent on drugs in the U.S. Their prices have doubled in the past five years.

The U.S. grants drugmakers several years of market exclusivity for their products and remains one of the only industrialized countries that allows them to set their own prices. These protections have allowed the pharmaceutical industry to become one of the economy’s most profitable sectors, with margins double those of the auto and petroleum industries.

To justify the value of expensive drugs, the professors affiliated with Precision Health Economics rely on complicated economic models that purport to quantify the net social benefits that the drugs will create.

For one industry-funded hepatitis C study, Lakdawalla and nine co-authors, including three pharmaceutical company researchers, subtracted the costs of the treatment from the estimated dollar value of testing all patients and saving all livers and lives. By testing and treating all patients now, they concluded, society would gain $824 billion over 20 years.

Critics have at times questioned the assumptions underlying the consultants’ economic models, such as the choice of patient populations, and suggested that some of their findings tilt toward their industry clients. For example, some have tried and failed to reproduce their results justifying the value of cancer treatments.

Precision Health Economics allows drugmakers to review articles by its academics prior to publication in academic journals, said a former business development manager of the consulting group. Such prior review is controversial in higher education because it can be seen as impinging on academic freedom.

“Like other standard consulting projects, you can’t publish unless you get permission from the company,” the former employee said. Carolyn Harley, senior vice president and general manager of the firm, said that pre-publication review was not company policy, but “in some cases, client contracts provide them the opportunity for review and comment before submission.”

“I have never published anything that I am not comfortable with or prepared to defend, nor have I ever been asked to,” said Lakdawalla about his firm’s research.

Goldman says the firm’s research is independent, and its clients don’t influence its findings. “From my perspective it’s very clear: I say things that piss off my sponsors, I say things that piss off the detractors,” he told ProPublica. “People are coming to us because they have an interest in sponsoring the research that’s generated. These are our ideas. This is how you get your ideas recognized.”

He said his consulting work does not involve setting prices of specific drugs, and his academic research focuses only on categories of drugs, rather than on particular brands.

The professors’ disclosure of their ties to the firm and to the pharmaceutical industry in scholarly articles is inconsistent: sometimes extensive, sometimes scanty. Members of Precision Health tend to reveal less about their paid work in blogs, public forums like conferences, and legislative testimony. At the Capitol Hill briefing last May on hepatitis C drugs, Lakdawalla didn’t mention his affiliation with Precision Health Economics, though it was listed in the journal issue, which was provided to attendees.

“Conflicts are always a concern, which is why it is important to be transparent about study methods — that way they can be scrutinized and debated in the academic literature,” said Lakdawalla, adding that he has disclosed his ties to the firm in at least 33 publications over the past three years.

Goldman said he and other academics at Precision Health Economics disclose their ties whenever appropriate, but typically journal editors and conference sponsors decide how to make that information available. “I wear two hats,” Goldman said in an interview. “And I try to reveal what that might mean in terms of perceived conflict of interest.”

The issues at stake aren’t just academic. Goldman says that pharmaceutical companies need to reap financial rewards from the enormous time and expense they invest in developing better medical treatments. Yet the high prices of some drugs have left government health programs strapped, or forced them to limit coverage. For example, one promising hepatitis C treatment is so expensive that some state Medicaid programs have chosen to cover its cost for only the sickest patients.

“Triage, triage, triage,” said Emily Scott, a Tennessee factory worker with hepatitis C who was denied coverage for the new treatment. “They set their price so high that we poor folks can’t afford it.”

Despite such cases, four researchers from Precision Health Economics warned in an article last month that any government controls on drug prices could actually shorten the average American’s life by two years by discouraging development of new drugs.

“As the pace of innovation slows, future generations of older Americans will have lower life expectancy relative to the status quo,” they wrote. The article, funded by the pharmaceutical trade group PhRMA, was published in Forum for Health Economics & Policy, of which Goldman is the editor-in-chief and co-founder. More than half of the editors listed on its masthead are current or former consultants at the firm.

Just after Precision Health Economics co-founder Dana Goldman completed his Ph.D. in economics at Stanford, in 1994, he was diagnosed with type 1 diabetes. He was 29 years old. With a pump he wears every day, he takes insulin to treat the disease.

“I would pay hundreds of thousands of dollars if I could take one pill that would make me better,” Goldman said.

His desire for a cure led to a new scholarly interest: the economics of medical innovation. Because there were few government funders for research in the field, he turned to industry. In 2005, Goldman established the firm with Lakdawalla and Philipson.

The headquarters of Precision Health Economics sits in a West Los Angeles office building flanked by palm trees, about 10 miles from Goldman’s academic center at USC. Goldman’s assistant at USC is also an executive assistant at the consulting firm. Daniel Shapiro, director of research compliance at USC, said that both Goldman and Lakdawalla were in compliance with the university’s standards on consulting.

Precision Health Economics has counted at least 25 pharmaceutical and biotech companies and trade groups as clients. The roster includes Abbott Nutrition, AbbVie, Amgen, Biogen, Bristol-Myers Squibb, Celgene, Gilead, Intuitive Surgical, Janssen, Merck, the National Pharmaceutical Council, Novartis, Otsuka, Pfizer, PhRMA, rEVO Biologics, Shire and Takeda. The firm has 85 staff members in nine locations.

Over the years, the founders recruited an impressive cadre of high-profile academics to consult for these clients. Early in 2016, the firm boasted more than two dozen academic advisers and consultants from top universities on its website. (The site later stopped identifying professors by their university affiliations.) The list of associates has also included some policy heavyweights who recently left the government, including a top official from the Congressional Budget Office, a senior economist from the White House’s Council of Economic Advisors, and an FDA commissioner. About 75 percent of publications by the firm’s employees in the past three years have either been funded by the pharmaceutical industry or have been done in collaboration with drug companies, a ProPublica review found.

Some academics worry that a tight relationship with industry might suggest bias. “I personally find, when your enterprise relies so substantially on a particular source of funds, you will tend to favor that source,” said Princeton economist Uwe Reinhardt.

Goldman says his industry connection has helped him ask better questions.

“The right way to do these things is not to push away the private sector, but to engage them,” he told ProPublica. “If we end up with a world where everyone who has a voice in a debate must be free of perceived bias, we lose the importance of the diversity of ideas.” In a later interview, he added, “You have to separate the appearance of the bias with actual bias.”

These ideas were recently echoed in an op-ed that he wrote with Lakdawalla in the online publication The Conversation.

“To be sure, collaboration with industry supplements our income through consulting fees. But no matter who funds our research — foundations, government, or companies — we apply the same template to our work,” wrote Goldman and Lakdawalla. “The ivory tower is not always the best place to understand the social benefits of treatments, the incentives for medical innovation, and how aligning prices with value can aid consumers.”

Engaging the private sector has indeed boosted Goldman’s income. According to federal conflict of interest forms filed last year, when he served on an advisory panel to the Congressional Budget Office, Goldman earned consulting income from the firm in the range of $25,000 to $200,000, on top of his income as a USC professor. He also has more than $500,000 in equity in the firm. Precision’s Harley says Goldman and Lakdawalla each have equity stakes of less than 1 percent, indicating that the firm is worth at least $50 million. Lakdawalla and Philipson have not publicly disclosed their consulting incomes.

In April 2015, Precision Health Economics was acquired by a privately held biotech company, Precision for Value. Terms weren’t disclosed.

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https://www.propublica.org/article/big-pharma-quietly-enlists-leading-professors-to-justify-1000-per-day-drugs