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FOIA Findings Reveal Pharma Influence on Trump Administration 2017-2018 Plans to Address U.S. Drug Prices

In 2016, then-candidate Donald Trump told Americans that pharmaceutical executives were “getting away with murder,” and pledged to challenge drugmakers to lower prices. Instead, President Trump championed Big Pharma interests, including by preparing a drug pricing executive order that appears to have been built around a “five-point plan” submitted to the White House by the leading Big Pharma lobby group, the Pharmaceutical Research and Manufacturers of America (PhRMA).

Public Citizen uncovered PhRMA’s email pitch to Trump’s Department of Health and Human Services through a Freedom of Information Act (FOIA) request.

President Trump met with pharmaceutical executives on January 31, 2017, weeks after he took office. According to PhRMA’s email, then-President Trump gave the executives a “follow-up assignment” to present to him their drug-pricing plan. The five points reflect drugmaker priorities to cut regulations, limit the influence of middlemen, and raise prices abroad. 

Shortly thereafter, the White House’s Drug Pricing and Innovation Working Group, led by former Gilead lobbyist Joe Grogan, prepared an executive order substantially tracking these PhRMA priorities.

In June 2017, the draft executive order on drug pricing was leaked, along with associated memos that had circulated in the Working Group. The draft order received media criticism, as did the memos. Public Citizen published its own discussion and critique of the EO and the memos.

The White House never issued the executive order, but its vision is embodied in later Trump administration policy, including an HHS “blueprint” and a Council of Economic Advisers report. (See Public Citizen’s analysis of the good, the bad and the ugly of the 2018 Trump administration proposals.) Each largely avoided challenging PhRMA and drugmakers, and focused instead on the same antagonists that PhRMA had identified — agencies, regulations, pharmacy benefit managers, and foreign countries. Although in 2016 candidate Trump had accused drug companies of “getting away with murder,” President Trump adopted their priorities as his own and made them the core of his drug-pricing plan.  

PhRMA’s five-point plan [as stated in PhRMA’s email to HHS]:

  • Value Based Contracting – FDA piece is around communications
  • Promote Generic Entry – mostly FDA
  • Improved Trade Agreements
  • Regulatory Relief – Some FDA, but a lot of 340b
  • Middlemen Share the Savings – CMS

The draft executive order, like PhRMA’s five points, emphasized regulatory relief and 340B (see EO articles 1.b, d & f), value-based contracting (1.c), trade agreements (1.e) and middlemen (1.b). PhRMA’s stated priorities are reflected in each of the top five substantive points of Trump’s draft executive order. [Articles 1(b)-(f).]

The HHS Blueprint had four points: 

  • Increased competition
  • Better negotiation (which relied on value-based purchasing and identified foreign “freeriding”)
  • Incentives for lower list prices (which included 340B reforms, PBMs)
  • Lowering out-of-pocket costs

In context, the HHS blueprint also resembles PhRMA’s list, with rebranding and additions, including lowering out-of-pocket costs—a pharma-favored solution. 

At the time, the press noted that the Trump drug-pricing policy appeared to echo pharmaceutical industry proposals. Now, documents obtained through FOIA show that PhRMA presented the Trump administration with a five-point plan, met with the White House and HHS about it, and was successful in catalyzing Trump policies that backed drugmaker interests, including a draft executive order that embodied PhRMA’s five points.

Timeline:

January 31, 2017: Trump meets with pharma executives; says prices must come down but pledges to work with them.

March 2017: Trump appoints former Gilead lobbyist Joe Grogan to lead new interagency OMB Drug Pricing and Innovation Working Group.

April & May 2017: PhRMA presents its five-point plan for lowering drug costs to the White House and HHS. (Public Citizen later obtained this document via FOIA).

June 2017: Trump draft EO on drug pricing leaks, along with three associated memos circulating in the Working Group to which no author is attributed.

  • The EO is criticized in major press, including in a New York Times article and in a KFF annotated critique. Read Public Citizen’s discussion and critique of the EO.
    • At the time, PhRMA’s meeting requests and five-point plan were unknown to the public. The FOIA documents reveal that the draft EO followed soon after PhRMA’s pitch and closely tracked its priorities. 
  • Read Public Citizen’s critique of the memos. See related articles from STAT News and aggregated articles from KFF

Late 2017-early 2018: Trump seemingly abandons the EO after the leak is published and criticized. Instead, the White House publishes a CEA report and then an HHS blueprint, which define the administration’s policy on drug pricing, and significantly track the draft EO and PhRMA points. Policies issue one at a time. 

The email thread between PhRMA and HHS regarding the five-point plan and meeting request [as it appears in the FOIA documents]:

From: Hennie, Alicia
Sent: Friday, April 07, 2017 4:22 PM
To: Abram, Anna
Subject: PhRMA White House meeting & CEO meeting requests

Hi Anna,

I’d like to request a meeting with you and our policy and legal experts about a 5 point plan to address prescription drug costs that we just delivered to the White House. For background, our policy, legal, and trade experts met with Katy Talento and Joe Grogan a few days ago to present it. It was a follow-up assignment from President Trump to our CEOs when they met January 31. Our CEOs will be in town for a PhRMA board meeting on May 8/9. We requested a meeting for the CEOs to speak with Secretary Price about the 5 point plan as well. I want to make sure you are completely up to speed. My colleague, Lori Reilly, will be reaching out to Jack Kalavritinos as well. We would like to coordinate a meeting with both of you if possible.

The 5 points we would like to present are:

  • Value Based Contracting – FDA piece is around communications
  • Promote Generic Entry – mostly FDA
  • Improved Trade Agreements
  • Regulatory Relief – Some FDA, but a lot of 340b
  • Middlemen Share the Savings – CMS

Hope you are doing well! You had a heckuva week with two huge Senate hearings two days in a row. I hope you have lovely weekend plans.

Sincerely,
Alicia
Alicia Hennie
DVP, PhRMA

From: Abram, Anna
Sent: Friday, April 07, 2017 4:28 PM
To: ‘Hennie, Alicia’
Cc: Stannard, Paula (OS); Lapinski, Mary-Sumpter (OS); Kalavritinos, Jack
Subject: RE: PhRMA White House meeting & CEO meeting requests

Hi Alicia – Thanks for your outreach. I would suggest that we coordinate meeting with my colleagues cc’d on this reply with Lori this upcoming Thursday at HHS.
Would 10 am work for everyone?

Thanks,
Anna