tv Washington Journal Eric Lipton Discusses Lobbying and the Pharmaceutical... CSPAN June 1, 2017 8:04am-8:36am EDT
"shattered sword: the untold story of the battle of midway." and the author of "never call me a hero: a legendary dive bomber pilot remembers the battle of midway." watch the anniversary special live from the macarthur memorial visitors center in norfolk, virginia. beginning at 9:30 eastern on c-span3. >> washington journal continues. this is eric lipton with the new york times. he serves as their washington correspondent and has a recent story taking a look at the pharmaceutical industry. i will show you the headlines and we will start from there. drug lobbyists cry over prices, blame the others. can you give us a setup? mr. lipton: there is a lot of debate and pain going on relative to the high cost of
pharmaceutical drugs in the united states and that is why many people's health care plans have risen so people have to pay more out of pocket for what they need to treat various conditions. because there has been a lot of anger that has emerged as a result of that, there is a fair amount of discussion in congress about possibly finally doing something to try to understand why prices are so high and to perhaps consider price controls to reduce them. the pharmaceutical industry, one of the biggest injuries in the united states in manufacturing, is trying to stop legislation that would hurt their part of the sector. we looked at all the lobbyists that are convening on capitol hill to try to protect their bottom lines and how the net effect may be that legislation may not pass that will significantly curb the growth. pedro: let me read you a line from the story to help people understand how much investment from the industry is going on. we are building a profit on the
line. the health products industry has already spent $78 billion on lobbying for the first order of this year. jump over last year according to the center for responsive politics. the industry pays some 1100 lobbyists. mr. lipton: you only have to go to one of the house or senate office buildings to walk around the halls and look at the nametags and the names of the companies that people work for. more likely than that, they run into pharmaceutical lobbyists or someone they have flown into advocate. there is just so many of them on the hill meeting with individual staffers and lawmakers and what is interesting is that they are all given -- giving different versions of reality to staffers and lawmakers, pointing at each benefitat the pharmacy managers are pointing at the pharmacists, the pharmacists are pointing at the benefit managers, the brands are pointing of the generics, the brands -- they are all blaming each other as responsible for
the increase in the cost of pharmaceutical drugs. that is their way of avoiding having legislation passed that is going to go after their piece of the pie, by claiming the other party -- that is where we are at a capitol hill. , iso: the truth is that that the industry itself? is the ultimate price one pays worth the truth? mr. lipton: is a combination of all of those things. the real problem that we have seen is that the single biggest factor in the cost of pharmaceutical drugs is the branded drugs because while they represent a relatively small number of prescriptions written in the united states, they are by far the dominant cost factor. the branded drugs are more expensive than the generic drugs and that is the fastest part of the pie and they spend the most in campaign contributions and therefore have the most protection. so far, the legislation that has seemed to have the most movement
will not go after the brandeds. they will go after other chunks of the industry. and the reason they can explain that is that the brandeds have an insurance policy to protect their interest. pedro: we will continue with our conversation with our guest eric lipton of the new york times. if you have questions about the industry lobby involved in a topic of high drug prices, (202) 748-8000 for democrats, (202) 748-8001 for republicans, and (202) 748-8002 four independents . when it comes to legislation, is there a vehicle out there currently that would take a whack at these prices and at what success level? mr. lipton: getting anything passed in congress is extremely hard right now. given president trump's various challenges and the fact that the democrats and the senate, as long as the rules state away
they are, could stop the legislation from moving. a couple of things have to happen this year that means it is very likely that some legislation will pass. that is user fees to fund the fda to approve both generic and branded drugs. the agreements that fund the fda and the user fee program expire this year. longer be will no able to approve drugs unless it has the fees that come from the drug companies that fund the fda's work. both programs must be re-authorized by congress this year. next creates a vehicle for someone to insert something into that legislation to go after prices because it is a relevant amendment to the user fee legislation. one has to do with the brandeds and one has to do with the generics. that is likely something that will be inserted that will drugss pharmaceutical prices. what will be inserted is unclear.
right now, who is going to get hit? pedro: is there a philosophical battle within members of congress about so much sway over an industry and the prices they can set for themselves? mr. lipton: the typical move that congress does is, let's commission somebody to do a study to see how we can lower prices. that is essentially what one piece of the legislation is proposing. program that was passed to try to create more safety but ultimately it has become a way for the branded companies to protect their market share. it is a proposal that is considered sort of popular that would study the problem but there is all kinds of evidence that rems is being abused to protect industry shares. what is the most likely thing? another study and pushing off the problem. pedro: even the president weighed in early in the first
days he took office. bit that tookou a place in january and get your thoughts on that. >> the competition, the key to lower drug prices. we have competition but a lot of times the competition dissipates. younger companies take the risk livelyging that to a competitive market. medicare is what is happening. we can increase competition and bidding wars big-time. pedro: so the president in citing idea of competition. go ahead. mr. lipton: if he is carefully reading a text provided to him -- you don't see him doing that too often. it makes you wonder. this is an industry where he has to be careful what he says. they are such a big player on the hill. he is sitting around with ceos
from the industry. you hear it coming from the trump administration, two things. one is that they are taking too much money from the public, that they are monopolistic and we need to go after them, but then on the other hand, you are not sure just how aggressively they will go after these industry players that are sitting in the circle around the president and having a meeting after the reporters walk out of the room. how the president will approach the health and then services agency and fda when it comes to price issues. well he has said something that are strong and suggest he is in favor of taking aggressive steps, we haven't seen any action so far. pedro: eric lipton is our guest. we have calls lined up. tim is in michigan, democrats line. you are on with our guest. caller: i was just wondering, do democrats or republicans get effort? thatom the
is my question and i will take your answer. mr. lipton: republicans get the bulk of the funds from the pharmaceutical industry. that is not surprising because republicans control the house and the senate. the money goes to the people who have power. if a person is the chairman of the subcommittee or the chairman of the committee, the people who have control of the agenda move the floor. it is not surprising that this industry gives more money to republicans and they have some important friends who, for example, under the obama administration, it was an experiment with medicare which spends millions of dollars on pharmaceutical drugs every year. the leader of the effort to try , representative shimkus of illinois saw that the pharmaceutical industry was having a fundraiser for him. it was a breakfast they held a couple of blocks from here on
from cynicalwhere representative wrote checks. they give money to people who have power and the people who have power, they say -- in shimkus's case he says he took the position because there is a cancer center in his district that would be closed because of the medicare experiment. ultimately, the obama administration was under such incredible pressure from democrats and republicans on capitol hill to kill this experiment that would have essentially reduced the compensation for the drug company that the obama administration at the end of the government's tenure actually withdrew the proposal. this was an effort to try to do something about it. the short answer is that the bulk of the money goes to republicans but it goes to members of both parties and it goes to people who have the most power. pedro: we have to highlight that mr. shimkus is the representative of the senior committee in commerce who deals directly with this kind of issue. mr. lipton: he is one of the
biggest recipients of pharmaceutical money and he led the effort to let signatures from members of congress to kill the medicare part b experiment. there were hundreds of members of the house, democrats and republicans, who said "don't do this experiment to try to reduce the cost of drugs even though the federal government is complaining about the high cost." obamaeaned on the administration in the final months of its tenure saying, don't do this experiment to reduce the cost of construction drugs because this will be bad. so the administration killed it. pedro: this is from stephen city, virginia. independent line. indy, hi. caller: i think we need to import medicines and pharmaceuticals from international markets. like we do with other products. china, england, mexico, even saudi arabia. regulatedce very well , very good products and
medicine for us. what are your thoughts? could we do that? mr. lipton: all you need to do is open up politico or the hill or others that are passed around and look at the full-page ads from the pharmaceutical industry saying "don't import drugs." the answer that comes from the industry, they are adamantly opposed to try to block anything like that. they will work on it legally and through the court if necessary and they are working on it with congress to make sure it doesn't happen. the industry is adamantly opposed to that proposal. as to whether or not it is good or bad for the industry in terms of its ability to create new drugs and innovate, that is not a question i can answer. what i read about is that the industry is intensely opposed to the importation proposal and they are working hard to make
sure it doesn't happen. wereif the administration to move it to happen, congress could block it. pedro: in oklahoma, on the democrats line, joy is up next. caller: i used to work for johnson and johnson and they are pretty fat. or was it was michael a lot of money. this should not be a republican or a democrat issue. this is a health issue for all of us. in the previous caller talked about competition through canada and other countries. it is funny how people scream about capitalism and free market and competition. this is a good example of how they should try to stop that. the republicans at this time are getting the money but i have seen democrats get the money too. i just want everybody to call your senators or congressmen and get this ball rolling because i am old enough to have seen where
they do say, let's study this more. it is just kicking the ball down the road. their every buddy calls -- everybody calls their congressman. mr. lipton: i think there is an opportunity this year or in this session of congress to do something on this topic. really, the open question is what should congress do? the vehicle is these user fees which are must pass. something will most likely be amended into the user fees but the question is what. i am not advocating for anything. i find it fascinating to watch how very excessively the industry maneuvers to make sure it is not their chunk that is put into the legislation. it is almost like a social science of observing animals acting in a threatened environment. it is fascinating and that is what happens in washington. pedro: tell us about the association known as pharma.
how big is it? who do they represent? what is their influence? mr. lipton: pharma represents the biggest branded companies and they are in the process of reducing their membership numbers because they are toughening their membership rules to exclude companies that uy drugs that are only made by one manufacturer and jack up the prices. they realize that that type of activity, if you buy a drug that a certainely used but portion of the population needs the one drug that makes that product and then jack up the price, you have no choice but to pay it. that has been happening and it has given the drug industry a bad blackeye because they are exploiting desperate people who need that one drug. so pharma changed its bylaws to essentially is it members that do those kind of things.
as peopleto be seen of hope, people that can bring these cures. they have an advertising campaign going on to make sure the american people see the big branded companies like pfizer and american as the people who offer you solutions to debilitating and life-threatening diseases. so they have significantly increased their dues that members have to pay so that they have more money, approximately $100 million more spent on television ads and lobbying to change the tide in washington and protect their interest. they are aggressively working, more than anyone else, to protect their chunk of the market because they are the biggest players in the market. most lobbying money, the most lobbyists, the biggest campaign contributions, and they are very determined to
protect their part. pedro: i have heard the argument of, look how much money we have to put into investing in these drugs, to test them and bring them to market. how does that hold water as far as these critics? mr. lipton: the american pharmaceutical industry is an extraordinary resource for the american public, to every single person and family, that they create drugs that save lives and extend lives. the american pharmaceutical companies are the best in the world. they do extraordinary work and i am not suggesting in any way that every person's life is not in some way helped by the drugs that they make. i also realize that the tremendous amount of research necessary and the many failures that come before you reach success in any drug. and only if you have deep pockets can you produce drugs that will extend and save lives. all of that is true.
the question is, how much should we have to pay, out of pocket and through our insurance programs, to buy these drugs? and should the federal government have the capacity to negotiate with these companies when it buys in bulk through medicare to get more reasonable prices? those are questions congress has to decide. i think just because they are doing great things doesn't mean that congress can't just debate the question as to what is a fair price. pedro: that was one of the arguments that elijah cummings had when he met with the president early this year to talk about drug prices and controlling prices, specifically purchased under medicare. here is a bit from his statement to the press. bill presented to him a that we would be filing in about two weeks and we asked him and secretary price who was also present to take a look and give us their comments.
it was our hope to be able to file it in two weeks. astec andwas in suzy he was really aware of the problem and clearly made it clear to us that he wanted to do something about it. any chance lipton, of that changing within medicare itself and how the government purchases drugs for medicare? mr. lipton: there is something trump has mentioned the number of times, that he doesn't understand why the federal government can't negotiate prices with other members of the hill for the change in the rules that allow it. the federal government is the single biggest buyer, probably in the united states and is not ,he world -- if not the world why can't it negotiate bulk pricing? the veterans administration
negotiates bulk prices, and the federal government for medicare can't for a number of legislative reasons. it seems to make sense it should be allowed but that is something the pharmaceutical industry does not want, adamantly does not want. that proposal does not seem to have that much legs to me because there are too many interested parties. pedro: here is from ohio, independent line, dave, you are on. caller: top of the morning to you. there are two things happening in ohio that i would like to get your opinion on. one of them is a bill to reduce the cost of drugs. that will be tied to the state of ohio not being able to buy drugs that would cost more than what the v.a. pays. the other thing is the attorney general in ohio is putting a lawsuit through against the manufacturers of opioid drugs. i would like to hear your thoughts on both of those.
mr. lipton: it is quite what hasng because happened in the absence of any significant movement by congress is these prices and fights have shifted to the state capitals. there is legislation pending in these states because the states are paying many of these costs them selves through medicaid as opposed to the federal government with primarily handles medicare. so, given that congress campaigned -- it can talk a lot about the high prices and do press conferences, they can write lots of letters, but they can't seem to pass legislation to combat the problem. so the fight has shifted to the states to a large extent. so the pharmaceutical industries and the other players are very well and intensely engaged in the state capitals across the united states, including ohio, where there is probably a better chance of actually getting legislation passed. but then you have this patchwork
of rules across the united states that the industry hates and, for good reason. it is complicated to have potentially 50 different sets of rules on how drugs are priced and it makes more sense to have a national system. but to answer your question, is it a fight that has shifted to the states? it is simultaneously going on in washington and state capitals. the opioid thing is not related to price but how the drugs are manufactured, in a way that makes them seem to be prone to abuse. there is allegations that the manufacturers were aware that andr drugs could be abused perhaps did not take aggressive steps to change the way the drugs are manufactured to make it less likely that they would be abused. to some extent, they benefit from the sales of the drugs even if they are being used for religion and purposes. litigation is pending that makes that allegation. i haven't read a complaint -- i have read the stories that i
haven't read the complaint so it is unclear to me what is specifically alleged. pedro: the washington correspondent for the new york times, eric lipton talking about his recent story, looking at lobbying in the prescription drug industry. you can find that story on the website and mighty.com. christina in maryland, democrats line. go ahead. caller: good morning. i was a lobbyist for big pharma starting in the late 1970's but then i moved on into corporate strategy and worked in a consulting firm for 20 years. the last 15 years of my career in pharma, i was overseas. i worked in 20 countries. my point about negotiating with medicare was in 1979, i was assumede task -- it was that medicare was going to negotiate price and i was giving
-- given the task of what that would do to the drugs and medications that were in that company's portfolio because some are more geared towards elderly people than others. it was a simple algebra problem at that point, which was price would be reduced, that was assumed. but demand increased to cover price. i don't know what happened to that but that was the mindset and assumptions in 1979. later on, around the world, we are the only country other than new zealand, the only country that allows direct consumer advertising. and iumps up demand wonder why that is allowed. pedro: we will leave it there for our guest.
mr. lipton: the advertising issue is a first amendment topic. whontially, i think anyone talks about trying to restrict pharmaceutical advertising, which occurs and helps drive spending on pharmaceutical drugs when you are advertising drugs which an individual can't actually go and buy at the store, they have to go to their doctor and say, i think i have this condition, can you prescribe the drug? you have to wonder why there is a need to advertise to the public when only a doctor can prescribe them. but it is a first amendment matter which i am not going to undermine. we have freedom of speech and that extends to the right to advertise. advertising is a form of free speech. at this point, pharmaceutical advertising is allowed and it is quite popular. at certain hours of the day and you watch tv -- when u.s. tv, you will see a lot of farm to the glands. -- pharmaceutical ads.
pharmaceutical companies facing that globally and when i look at their global work and what i see is in incredible focus on intellectual property and trying to prevent manufacturers in other countries from copying their drugs and manufacturing them, and with that patent, there is a lot of effort to go on about pharmaceutical companies. in alliance with the united states government, they are trying to prevent foreign manufacturers from taking the drugs that the american companies have created and making their own versions of them without paying their share of the profits and revenue to the company that made them. the pharmaceutical company is engaged not only domestically but globally in legal efforts to protect their market share in the profits. from: one more call, mary baker's bill, north carolina. republican line. thatr: i wanted to say this man is a newspaperman and
this is a good example of where the leaks come from in washington. the new york times and washington post, you get your news out of it every day, and it is like they run the government. they are the ones that are the boss. pedro: on the topic of lobbying in the prescription drug industry, what is your question about that? caller: he says the republicans got money from it. the democrats are the ones that is getting the money. the democrats are the ones who are giving them all the information that he is letting out right now. pedro: we will leave it there. mr. lipton: i spent a lot of time on the hill, talking to lobbyists. watching them do their work. i was in the office of the lawmakers who, with the presen -- with the permission of some of these organizations, some of them walked away on the debate over whether or not there should be price control.
what i do is i talked to a lot of people and i hear their arguments and i evaluate them and offer my take on them. i am not advocating any piece of legislation. i think it is interesting to see, when there is universal agreement when there is a problem over drug prices, it is interesting to see how it is going to play out and if anything passes and what passes and what change it brings about in terms of the problem that everyone from the right and the left in the white house agree is a real problem. pedro: so the next step is later on this year when those user fees issues come up. fact, mr. lipton: they are already marking up those bills in the coming weeks. the markups will be the first step where, at some point, they will have to start putting amendments into the user fee bill. that is the thing to watch as to what is going to happen on the drug prices issue. pedro: eric lipton with the new york times, their washington correspondent. you get that story online at nytimes.com. it's a lot.
pedro: coming up, we will talk with you that -- with william pomeranz here to talk about russia's goal in the influence over the 2016 election and the key players. that discussion up next. later on, lindsay russell covers the retail industry for bloomberg and the fate of that that industry. all of his coming up when washington journal continues. ♪ >> sunday on q&a. >> there is a political structure that was crafted in primary radio and actor, herbert hoover, secretary of commerce. years ago, still
govern the way we actually allow resources to be used in our economy today. clemson university professor and former chief economist at the sec talks about his book "the political spectrum" which looks at the history and politics of u.s. medications policy. when we went to this political system for allocating rights in 1927, within a couple of years, the regulators at the commission are renewing licenses but very carefully noting that propaganda stations will mock be allowed. -- will not be allowed. in 19.9, you had left wing stations, if i could use that political term, owned by the w cfl in chicago, the labor union, and w dvd, a socialist station in new york city, and they wanted, for political purposes
like free speech, they wanted to espouse their opinions. these were immediately dubbed propaganda stations and when they were renewed they were the best they were told to be careful about addressing opinions. >> sunday night on c-span's q&a. ♪ >> span. where history unfolds daily. in 1979, c-span will -- was created by america's television companies and is brought to you today by your cable or satellite provider. >> washington journal continues. pedro: our next guest, william pomeranz with the wilson center, decade -- deputy director of the institute and the next on russia. thanks for joining us. a lot of discussion about communicat b