During President Obama’s tenure, Big Pharma enjoyed one of their best stock market runs in history. In fact, the Pharma Stock ETF (XPH) below more than tripled during the Obamacare run. It wasn’t until politicians like Hillary Clinton, Bernie Sanders, and President Elect Trump started to bring focus to out of control drug pricing that the sector saw pressure during the end of Obama’s 2nd term.
It wasn’t just the remarkable stock returns that helped Pharma and Obama become BFFs, it was a tremendous grab of power during the Obama Administration which helped seal this wonderful friendship.
1. Obamacare was an incredible deal — For Big Pharma
Since Obamacare became law in 2008, media outlets from both sides of the political spectrum have reported on the incredible deal that Obama made for Pharma to pass the Affordable Care Act, aka Obamacare.
Internal Memo Confirms Big Giveaways In White House Deal With Big Pharma
A memo obtained by the Huffington Post confirms that the White House and the pharmaceutical lobby secretly agreed to…
In the article above, the Huffington Post notes that the Big Pharma Lobby group, PHRMA, and Obama’s White House concocted the following deal as outlined in a leaked internal memo:
Commitment of up to $80 billion, but not more than $80 billion.
1. Agree to increase of Medicaid rebate from 15.1–23.1% ($34 billion)
2. Agree to get FOBs done (but no agreement on details — express disagreement on data exclusivity which both sides say does not affect the score of the legislation.) ($9 billion)
3. Sell drugs to patients in the donut hole at 50% discount ($25 billion)
This totals $68 billion
4. Companies will be assessed a tax or fee that will score at $12 billion. There was no agreement as to how or on what this tax/fee will be based.
Total: $80 billion
In exchange for these items, the White House agreed to:
1. Oppose importation
2. Oppose rebates in Medicare Part D
3. Oppose repeal of non-interference
4. Oppose opening Medicare Part B
So basically, Pharma companies collectively agreed to an $80 Billion investment in Obamacare, and in return received pricing protection for their drugs via the last 4 points above.
The Huffington Post article further confirmed the terms of the above deal via reporting from the articles below:
Obama gives powerful drug lobby a seat at healthcare table
As a candidate for president, Barack Obama lambasted drug companies and the influence they wielded in Washington . He…
White House Affirms Deal on Drug Cost
A deputy White House chief of staff, Jim Messina, confirmed Mr. Tauzin's account of the deal in an e-mail message on…
So who got the better end of this deal?
Just check out the headlines below:
Big Pharma's ObamaCare Reward
News Corp is a network of leading companies in the worlds of diversified media, news, education, and information…
Obamacare Will Bring Drug Industry $35 Billion In Profits
The pharmaceutical industry will reap between $10 billion and $35 billion in additional profits over the next decade…
The one that got away: Obamacare and the drug industry
President Barack Obama's landmark health care bill shook up the health care system. One key player escaped the upheaval…
2. Obama’s Court Pick Made the FDA Impotent against Pharma
Many people don't realize the radical developments impacting their health care vis a vis the courts. Obama’s left leaning judicial picks have created an environment ripe for aggressive action by the wealthy pharma industry and their top tier law firms. Perhaps Obama’s pick, Judge Denny Chin from NY was the greatest gift to Big Pharma.
Ruling in Off-Label Marketing Case Is a Win for Drug Makers
The ruling, in United States v. Caronia, involved the conviction of Alfred Caronia, a former sales representative for…
As reported in the NY Times article above, a 2-to-1 decision by a three-judge panel of the Court of Appeals for the Second Circuit in Manhattan resulted in a landmark foundational change in our health care system. This court ruled that a pharmaceutical rep had a First Amendment right to discuss off-label information with a doctor, and therefore threw out his conviction for off-label marketing to a physician government informant. Obama’s judicial pick, Denny Chin, was a key part of this incredible ruling. Coincidentally, this judge is also married to a high profile NY attorney in the practice of law related to health care.
Crain's New York Power Couples - Denny Chin & Kathy Chin
Why they are a power couple When federal judges were seeking a raise from Congress in 2007, the legal blog Above the…
The lone dissenting judge had some ominous words regarding this ruling (as reported in the NY Times article above).
The lone dissenting judge, Judge Debra Ann Livingston, vigorously disagreed, arguing that by throwing out Mr. Caronia’s conviction “the majority calls into question the very foundations of our century-old system of drug regulation.” She argued that if drug companies “were allowed to promote F.D.A.-approved drugs for nonapproved uses, they would have little incentive to seek F.D.A. approval for those uses.”
So how important was this ruling? Actually, the ruling, also known as Caronia, emboldened Pharma. Shortly after the ruling, Pharma used this case to defend their actions of off-label promotion.
After the FDA had sent a Pharma company, Amarin, a letter for their off-label promotion of a drug, the company sued the FDA on First Amendment grounds…and the FDA settled with the company, and allowed them to continue with their off-label marketing practices.
FDA seeks to appease drug company in off-label marketing dispute - The Brand Protection Blog
The FDA has long treated off-label marketing - the promotion of drugs for uses that have not received FDA approval - as…
From the legal blog above, the FDA capitulated as follows:
Now, in an unusual move that appears intended to head-off the lawsuit, the FDA has written a letter to Amarin stating that the marketing materials the drug maker proposes to distribute to doctors would not concern the FDA. The June 5, 2015 letter signed by Janet Woodcock, the director of the FDA’s Center for Drug Evaluation and Research, states that under the circumstances presented, the FDA would not object to Amarin’s dissemination of clinical trial results related to unapproved uses of Vascepa, nor consider their distribution to be evidence of “intended use.”
Below are more articles reviewing this powerful Caronia court decision and the Amarin escapade by the FDA:
Caronia And The First Amendment Defense To Off-Label Marketing: A Six Month Re-Assessment
When the Second Circuit decided United States v. Caronia in December 2012, the opinion provided a new and potent First…
Did The DOJ Embrace The 2nd Circuit's Caronia Ruling In Amarin's Off-Label Challenge?
As reported here and elsewhere, a small biopharmaceutical company called Amarin has sued the FDA in advance of…
U.S. v. Caronia: What are the Implications?
Tamara Fraizer, Ph.D. | Fish & Richardson Alfred Caronia was a pharmaceuticals sales representative for Orphan Medical…
3. Obama’s FDA is a Revolving Door for Big Pharma
So, based on the Caronia Decision above, and the Amarin settlement, the FDA has really become quite impotent in enforcing drug promotion once the pharma product is on the market. So what about initial drug approvals? Surely the FDA has some power in this matter?
Well, thanks to Obama, the FDA is riddled with Pharma revolving door hires and potential conflicts of interest. Let’s start with the top, the FDA Commissioners:
Dr. Robert Califf, the current FDA commissioner has been a controversial pick from the start. He’s had many business dealings with pharma via his disclosures.
F.D.A. Nominee Califf's Ties to Drug Makers Worry Some
While the previous commissioner, Dr. Margaret A. Hamburg, a former top health official in New York City, came from the…
Senate Confirms New FDA Commissioner with Close Ties to Big Pharma
The Senate has confirmed Robert Califf to be the new commissioner of the FDA, but many are pointing to his ties to the…
In fact, even Hillary’s camp had some questions regarding Obama’s recent FDA commisioner as reported in the article below:
Clinton campaign questioned FDA commissioner's Big Pharma ties: WikiLeaks
New evidence has come to light from a series of emails released by the whistle-blowing website WikiLeaks that Hillary…
The FDA Commissioner prior to Califf was Margaret Hamburg for 6 years. Hamburg stepped down in 2015, according to the NY Times article below because as she stated “It was time.”
F.D.A. Commissioner Leaving After Six Years of Breakneck Changes
The F.D.A. is a big agency. Its officials like to say that it regulates about 20 cents on every dollar spent by…
Shortly after stepping down, Hamburg was the focus of a RICO lawsuit filed by the founder of Judicial Watch. It appears that Hamburg’s husband was a key figure in one of the world’s largest hedge funds. The Hedge fund made hundreds of millions of dollars in Biotech and Pharma related trades during Hamburg’s reign at the FDA. The Lawsuit alleges that Hamburg suppressed information to benefit the hedge fund trades related to Johnson and Johnson.
Suit Alleges Former FDA Chief Suppressed Danger Of 'Deadly' Drug For Sake Of Profit
Former Food and Drug Administration (FDA) Commissioner Margaret A. Hamburg, her hedge-fund executive husband, and…
Johnson & Johnson, former FDA commissioner among defendants in Levaquin lawsuit
A Baltimore woman is one of six plaintiffs in a lawsuit against pharmaceutical giant Johnson & Johnson. They say the…
Levaquin users slap J&J with $800M RICO suit, claiming pharma giant hid serious side effects
Johnson & Johnson ($JNJ) is facing yet another lawsuit over its antibiotic Levaquin from people who claim that the…
As if ties to Big Pharma at the Commisioner Level weren’t bad enough, the FDA also has a big problem with the revolving door of its reviewers. These are the people responsible for reviewing a Pharma company’s submission of a product for FDA approval. In the TIME article below, the article cites a paper by Dr. Vinay Prasad and Jeffrey Bien which looked at this revolving door issue in the hematology/oncology FDA approval processes.
Is the FDA Too Cozy With Drug Companies?
People who work at the U.S. Food and Drug Administration (FDA) as medical reviewers are responsible for parsing the…
As the article reports:
The researchers found that among 55 people who worked as haematology-oncology medical reviewers from 2001 to 2010, 27 continued in their roles at the FDA, two people worked at the FDA but held other appointments, and 15 left the FDA to work with or consult for the biopharmaceutical industry. The jobs of the rest of the people could not be determined.
Glad to see that Big Pharma is so supportive of our government bureaucrats!
Below are more articles regarding the revolving door and Obama’s FDA:
A revolving door between FDA and the pharma industry raises questions about 'whether regulators…
To get a drug approved in the US, it has to pass through the regulatory hands of the Food and Drug Administration. The…
The FDA's drug reviewers keep leaving to work for big pharma, and it's a big problem
In a first, researchers measure the agency's "revolving door."
FDA drug reviewers often end up at pharma companies
More than a quarter (27 percent) of Food and Drug Administration (FDA) workers responsible for approving cancer and…
A Look At How The Revolving Door Spins From FDA To Industry
More than a quarter of the Food and Drug Administration employees who approved cancer and hematology drugs from 2001…
4. Obama’s DOJ is a Revolving Door for Big Pharma Law Firms
Under Obama’s leadership, the Department of Justice has lost many of their talented prosecutors to Big Pharma Law Firms. One of the biggest turncoats, was Michael Loucks. As reported in Forbes below, and various other media outlets, Loucks was one of the most effective attorneys in the DOJ.
The Revolving Door at the Department of Justice
Michael Loucks makes a lot of money. As The New York Times reported in a front-page article earlier this month, after…
According to the Forbes article above:
At Skadden Arps — Loucks’s new home — the average partner earns over 2 million dollars, with the highest-compensated partners now earning five times their lesser-paid peers’ remuneration. Why would a firm like Skadden pay a man like Loucks millions a year? Simple. Loucks used to be the government’s top prosecutor of many of Skadden’s clients. Now, the man who only two years ago extracted 2.3 billion dollars from Pfizer on behalf of the government, will become Pfizer’s very own advocate. It’s the classic case of “if you can’t beat ’em, join ‘em” or, in this case, “if they keep beating you, pay ‘em.”
In fact, Loucks was a bit cavalier in his move to a white collar defense firm, comparing himself to a NY Yankee Superstar.
Michael Loucks Switches Sides, as Drug Makers' Lawyer
"The government and the whistle-blower have an advantage," he wrote, complaining that federal investigators were now…
As reported in the above NY Time article, Loucks’ view of his move represents a very mercenary approach to law:
For his part, Mr. Loucks uses a baseball reference. Johnny Damon left his beloved Boston Red Sox in late 2005 to sign with “the evil empire, the New York Yankees,” Mr. Loucks said. Both teams won World Series with help from Mr. Damon.
Asked whether the “evil empire” analogy fit the Justice Department or Skadden, Mr. Loucks said, “One man’s evil empire is another’s home team.”
As noted in the articles below, there were multiple other turncoats from the Department of Justice to Big Pharma’s defense firms under Obama’s leadership:
Former DOJ Prosecutor Joins Arnold & Porter
Arnold & Porter has added former Department of Justice prosecutor Kirk Ogrosky to its white collar criminal defense and…
Political Ties of Top Billers for Medicare
Another physician, Dr. Asad Qamar, an interventional cardiologist in Ocala, Fla., has sent at least $250,000 in…
First Assistant United States Attorney David L. Anderson To Join Sidley Austin in San Francisco …
Sidley Austin LLP announced today that David L. Anderson, First Assistant United States Attorney in the Northern…
Sidley Austin Lures Former Federal Prosecutor To SF Office - Law360
Sidley Austin LLP has snagged a former assistant U.S. attorney to serve as a partner in its white collar, securities…
Federal Prosecutor Joshua Hill Joins Sidley in San Francisco | Business Wire
Sidley Austin LLP is pleased to announce that Joshua Hill has joined the firm as a litigation partner in the San…
Obama Picks Sidley Partner To Head OLC - Law360
President Barack Obama on Wednesday tapped a Sidley Austin LLP partner to serve as assistant attorney general for the U…
As mentioned in the article above, Obama appointed an attorney from his former Law Firm, Sidley Austin to head the Office of Legal Council at the DOJ. Thus, demonstrating the revolving door!
5. Obama Rewarded His Big Pharma Friends!
One of the highest profile CEO’s in Biotech history has been Art Levinson, the former CEO of Genentech. Despite an ongoing DOJ investigation into Levinson’s former Biotech firm at the time, Obama awarded Art Levinson with the National Medal of Technology in 2014.
Obama also rewarded Big Pharma’s Law Firm Sidley Austin’s partner Newt Minow with the National Medal of Freedom in 2016. Minow’s firm has done very well with Obama in office. Maybe the DOJ defections to their law firm in support of Big Pharma helped out? Why wouldn't their partner deserve an award? Maybe they have an award waiting for Obama later this month?