Billionaire pharma-pricing activist, an early ICER backer, funds new patient group's campaign

Billionaires Laura and John Arnold contributed $500,000 to a new nonprofit aimed at fighting high drug costs.

Big Pharma might not like billionaire hedge funder John Arnold’s next drug pricing move, a $500,000 contribution to the newfound Patients for Affordable Drugs (PFAD). Making its debut on Wednesday, the group will work to share the stories of struggling patients and bring down costs.

Multiple myeloma patient and 40-year healthcare communications veteran David Mitchell founded the group to fight pharma’s lobby and bring together “real Americans who demand a change in drug pricing.” In addition to the Laura and John Arnold Foundation contribution, Mitchell and his wife Nicole, a breast cancer patient, pitched in $75,000.

One key difference between PFAD and "virtually every" other major patient group is that it won’t take any money from pharma or its foundations, it says. PFAD supports Medicare price negotiations, faster generic competition, plus transparent and value-based pricing.

“Innovation and new drugs that save people’s lives shouldn’t come at a price that bankrupts people or ruins their lives at a time that they are struggling to maintain their health,” Mitchell said in an introductory video.

Mitchell's multiple myeloma drugs retail at $10,000 per treatment, he said, and he’ll have about 22 treatments this year. The PFAD founder is “completely dependent on new drugs" for survival because the disease finds ways to circumvent existing meds.

Still, he maintains that lowering prices doesn't mean less R&D, likening that logic to “a form of extortion."

For their part, the Arnolds have been socking cash into drug pricing issues for more than a year. Back in 2015, they backed the nascent Institute for Clinical and Economic Review (ICER), donating more than $5 million to help the cost-effectiveness group get up and running.

The Boston-based group weighs clinical data and health system costs against a drug's list price, much as public agencies in other countries do. Drug regulators in the U.S. aren't allowed to consider cost when making approval decisions, and Medicare is not allowed to directly negotiate pricing. Since it ramped up, as industry watchers know, a few of ICER’s drug-value calculations have angered top biopharma companies.

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The Arnolds continued their drug-pricing quest last February when they pledged $7.2 million for projects that explore value-based pricing. Memorial Sloan Kettering Cancer Center's Peter Bach, M.D., captured the largest share of that funding, with $4.7 million for a three-year project designed to test value-based pricing arrangements. Bach, who heads up the cancer hospital's Center for Health Policy & Outcomes, has been a vocal critic of fast-rising cancer-drug prices.

The foundation also handed out funding to the Center for Evidence-based Policy at Oregon Health & Science University, which planned to use it to experiment with ways to tie Medicaid reimbursements to improved patient health; Brigham and Women's Hospital in Boston, to study federal incentives for drug development and their relationship, if any, to higher prices; and the National Academy of Sciences and the Institute of Medicine, to develop drug-access policy recommendations.

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The formation of PFAD comes directly on the heels of pharma’s public image push, Go Boldly, which is poised to far outspend the newfound nonprofit. Industry group PhRMA held an event in Boston this week, convened by The Atlantic, to take that campaign directly to the public. It's also advertising on TV and in print, including one full-page ad in a recent issue of the New Yorker.

The Arnolds' latest move also comes after more than a year of intense scrutiny of the industry’s pricing ways, with President Donald Trump recently telling industry leaders to get their prices “way down.” Among the drug-pricing remedies Trump has discussed are a couple backed by the Arnolds, including Medicare price negotiation.