The ACA and the revolving door

It’s unlikely the healthcare industry could have hoped the end of President Obama’s tenure would turn out any better for it.  After all, various administration insiders had embedded themselves in industry positions, with Marilyn Tavenner, the former healthcare reform chief, being the greatest prize as the new head of the nation’s health insurance lobby, and her successor in the federal government being a former (and future, presumably) health insurance executive.

But with drug prices having soared in 2014 by their greatest margin since 2003, and some, including Sen. Bernie Sanders (I-Vt.), clamoring for the drug reimportation Obama promised in his 2008 campaign – but opposed in the Affordable Care Act – a defiant president has chosen to further reward his pharmaceutical industry benefactors by making one of their favorites, Dr. Robert Califf, the new head of the Food and Drug Administration.

By all accounts, Califf, a cardiologist, is a noted clinical researcher.  But in running clinical trials in different countries he was heavily dependent upon drugmakers in his research.  One paper he published, for example, was underwritten by more than 20 companies.  Last year his earnings were supported by 13 drugmakers.  He has attacked regulation in presentations.  As an exultant Forbes piece noted: “Califf’s industry ties run deep.”

Consider how well the stock for Novartis, one of the companies that supported Califf’s Duke University salary, has done since the ACA’s passage.   On March 19, 2010 – four days before the ACA was signed – its stock traded at $54.82 a share.  On September 15, 2015, the day Califf was nominated to run the FDA, it was at $96.38.  Can you imagine if the average American family had enjoyed such a gain?

As was true with the ACA, or the past nomination of Tavenner to replace ill-fated single-payer advocate Dr. Donald Berwick, the nomination of Califf is a sign of the administration’s unwillingness to give offense to Republicans.  Of course, that accommodationist impulse also fails to inspire the Democratic base, a fact that has been heavily on display in the off-year elections, when Democrats have been routed thanks to voters staying at home.

Last year John Martin, the chief executive officer for Gilead Sciences, made $206.3 million as Sovaldi, a Hepatitis C treatment, cost $84,000 for a 12-week treatment.  The cost of his drug has proved bankrupting for patients, Medicaid programs and insurers, and to further reward him the Trans-Pacific Partnership would make it harder for generics to come to market by prolonging patent protection.  In 2012, the Swiss pharmaceutical giant Novartis only gave 40 percent of its political contributions to Democrats, but they were pathetically grateful.  As long as Rep. Steny Hoyer (D-Md.) gets $7,500 all is, apparently, well.

But Democrats must understand this doesn’t work with voters.  In 2012, for example, Rep. Allyson Schwartz (D-Pa.) was among the third-highest recipients of donations from drug giant Merck, receiving $9,000.  Yet the “New Democrat,” so pivotal in watering down the ACA, was trounced in her 2014 Pennsylvania gubernatorial primary despite running unabashedly pro-ACA ads.  It turned out Democratic voters were smarter than Schwartz realized in understanding who really was on their side.

In January 2009, Obama, anxious to present himself as a reformer, signed an executive order requiring each appointee to pledge that, “I will not for a period of 2 years from the date of my appointment participate in any particular matter involving specific parties that is directly and substantially related to my former employer or former clients, including regulations and contracts.” 

The appointment of Dr. Califf shows how much has changed.

Williams, an Olympia, Washington attorney, writes frequently on healthcare issues.