Lambert here: In like a lion, out like a lamb. (The Democrats not only managed to avoid passing single payer during a pandemic, they managed to erase it from the discourse entirely. Impressive.)
By Arthur Allen, KHN Senior Correspondent, who writes about the FDA and the pharmaceutical industry as well as covid-related topics. Originally published at Kaiser Health News.
Sen. Bernie Sanders, who rose to national prominence criticizing big business in general and the pharmaceutical industry in particular, claimed the spotlight Wednesday on what might at first seem a powerful new stage from which to advance his agenda: chairmanship of the Senate health committee.
But the hearing Sanders used to excoriate a billionaire pharmaceutical executive for raising the price of a covid-19 vaccine showed the challenges the Vermont independent faces.
Though its formal name is the Committee on Health, Education, Labor, and Pensions (HELP), the panel Sanders chairs has little if any authority over drug prices. In the Senate, most of that leverage lies with the Finance Committee, which oversees Medicaid, Medicare, and Obamacare.
As far as drug prices go, the platform Sanders commands is essentially a bully pulpit. So Sanders was left to bully his way toward results. And while some committee Republicans sympathized with his complaints, others bristled at his approach.
By the end of the hearing, seeming to acknowledge the limits of his power, the former presidential candidate was pleading with Moderna chief executive Stéphane Bancel for a relatively modest concession on vaccine pricing.
The CEO made no promises. Then again, pulpit proclamations can lead to corporate action, even if delayed and informal; in the weeks following President Joe Biden’s State of the Union call for cheaper insulin, the companies that make it drastically cut their prices.
Sanders began Wednesday’s hearing with his usual fire and brimstone.
“All over this country people are getting sicker, and in some cases dying, because they can’t afford the outrageous cost of prescription drugs, while companies make huge profits and executives become billionaires,” Sanders thundered.
Bancel had won his place in the witness chair with federal assistance. Moderna, which was founded in 2010 and had not brought a drug to market before the pandemic, received billions in government funds for research, guaranteed purchases, and expert advice to help develop and produce its successful covid vaccine. The payoff has been handsome. As of March 8, Bancel held $3 billion in Moderna stock. He also held options to buy millions of additional shares.
Government research and support are foundational to many of the expensive drugs and vaccines in use today. But Bancel made himself the perfect foil for Sanders when he announced in January that Moderna planned to increase the price of its latest covid shot from about $26 to $110 — or as much as $130.
Denouncing greed, Sanders expounded on his dream of a system in which the government fully funds drug development — and in exchange controls drug prices. “Is there another model out there where, when a lifesaving drug is made, it becomes accessible to all those who need it?” he asked. “What am I missing in thinking that it’s cruel to make a medicine that people can’t afford?’”
Sanders’ overt moralizing and harsh attacks on big business make him an outlier in the Senate, even in his own party. Yet distaste for soaring drug prices extends across the aisle. On the HELP Committee, at least, Republican politicians seem about evenly split between populist and pro-business takes on the problem, showing both the possibilities and the pitfalls that Sanders faces.
Sen. Mike Braun (R-Ind.) expressed disgust with the lack of transparency in the health care system and called Moderna’s planned price hike “preposterous.” Sen. Roger Marshall (R-Kan.) called it “outrageous.”
Sen. Rand Paul (R-Ky.), who often bucks mainstream GOP views and has expressed rancor for the biomedical establishment, claimed Bancel was downplaying vaccine injuries to make money. (Paul vastly exaggerated those risks.)
Ranking member Bill Cassidy (R-La.), who has pledged to work with Sanders, responded to the chairman’s opening remarks with both a hedge and a warning. “I’m not defending salaries or profits,” Cassidy said, but he added that he hoped the hearing’s goal wasn’t to “demonize capitalism.”
Only Sen. Mitt Romney (R-Utah), a former private equity executive, came heartily to Bancel’s defense. “If I’m an investor, I have to expect that if a product I’m backing works, I get to make an awful lot of money,” he said. “I’ve heard people say, ‘That’s corporate greed.’ Yeah, that’s how it works.”
Sanders’ idealized vision of the pharmaceutical industry is, in any case, moot. Even the Biden administration, which successfully browbeat insulin makers into drastically lowering prices in March, revealed this week it would not use “march-in” rights to lower the price of a cancer drug, Xtandi, developed with government-licensed patents.
March-in rights were established in the 1980 Bayh-Dole Act, which enabled companies to license federally funded research and use it to develop drugs. But federal courts and administrations have consistently said the government can seize a product only if the license holder has failed to make it available — not because the price is too high. The administration did, however, announce a review of whether price might be considered in future march-in decisions.
Sanders said before the hearing that he was “extremely disappointed” with the Xtandi decision. But he was ultimately realist enough to aim his bully pulpit at a lower target. Late in Wednesday’s hearing, Sanders pushed for a minimal gimme from Moderna. “Will you reconsider your decision to quadruple the price of your vaccine to the U.S. government and its agents?” he asked politely.
Bancel dodged, saying pricing was more complex now that Moderna faced an uncertain market, had to fill separate syringes with its vaccine, and needed to sell and distribute the vaccine to thousands of pharmacies, where previously the government did all that work. Later, he left open the possibility that negotiations could drive down the price paid by some government agencies or private insurers.
For all the theatrics of such hearings and the mix of opinions among the senators, interrogations of figures like Bancel may help inspire a shift in how the National Institutes of Health “does business in giving away its science to the private sector,” said Tahir Amin, co-executive director of I-MAK, a nonprofit that advocates for equitable access to medicines.
“You have to prosecute it so you at least get these public comments on record,” Amin said. Eventually, he said, this type of hearing could lead to a recognition that, ‘Hey, we need to do this.’”
Despite the HELP Committee’s lack of direct jurisdiction over drug prices, said John McDonough, a Harvard professor who was senior adviser for health reform on the HELP Committee from 2008 to 2010, Sanders “uses his position of authority and influence to draw attention to this in a way that has been helpful.”
KHN correspondent Rachana Pradhan contributed to this report.
