Last year's Inflation Reduction Act passed both the House and Senate on razor-thin party-line votes. As a result, our country's elected representatives are keeping a close eye on the Biden administration as it imposes significant policy changes against the will of many of their constituents.
The biggest such area is drug pricing. For the first time, bureaucrats in Washington will have the power to dictate to drug makers the prices Medicare will pay for their products.
This change will massively impact seniors, influence the availability of crucial drugs, and affect the bottom line for drug makers. And yet, even as its implementation gets underway, questions are already swirling about how transparent the new "Drug Pricing Negotiation Program" will be.
The Biden administration has done nothing to reassure skeptics it's committed to an open, transparent, and administratively neutral process. Already, some of its decisions are raising questions about the possibility of hidden agendas among key decision-makers.
CMS, the Centers for Medicare & Medicaid Services, recently announced the first ten drugs for price controls and will soon begin the process of deciding prices. But CMS remains unclear about who will sit at the table to determine the new prices, potentially opening the door to conflicts of interest.
The ink on the IRA was barely dry last year before CMS began the process of staffing up its price-control program. At the head of this hiring process is Kristi Martin. A "senior advisor" at CMS, Martin has previous stints at Arnold Ventures and Waxman Strategies.
That resume should raise some eyebrows.
Waxman Strategies has been a leading advocate for hospital interests, and Arnold Ventures has attacked intellectual property rights crucial to the investment in research and development required to create breakthrough treatments. Those interests are about as conflicted as they come.
And those conflicts of interest raise serious questions. For example, has CMS, through Martin, recentered the program around an activist agenda rather than patient interests? Can someone who has spent a career championing insurance and hospital influence remain impartial?
If the answer to those questions is “no,” Martin will join a troubling number of federal employees engaged in financial impropriety.
For example, staffers at the Department of Health and Human Services, where CMS is housed, sold 60% more stocks on the eve of the Covid-19 pandemic's economic shutdown than the average of the previous 12 months. Within weeks, the Dow Jones Industrial Average plunged 37%.
A comprehensive investigation by the Wall Street Journal found that over 2,500 federal employees had stock portfolios that included shares in companies actively lobbying their agencies.
The potential for conflicts of interest and hidden agendas is also seeping into patient-focused aspects of the implementation of the drug price control scheme.
The selection process for the ten drugs chosen for the first annual round of price controls was shrouded in mystery. According to CMS, the agency considered "unmet medical need" and "costs associated with research and development" for the drugs selected. Unstated was how CMS defines and calculates "medical need" and what makes such a need met or unmet. Likewise, the procedures CMS used to determine research and development costs remain unclear.
Additionally, CMS recently hosted ten listening sessions for patients and other concerned groups and individuals to comment on each of the drugs impacted by government price-setting. During the sessions, people with clear political ties to President Biden and Democratic campaigns spoke without disclosing those conflicts.
At the same time, recognized patient groups found the process CMS put in place for registering and commenting to be restrictive and confusing. Groups like the Alliance for Aging Research, which represents millions of Americans with Alzheimer's, said the registration procedures and strict three-minute limits on comment sessions acted as barriers to expressing their concerns.
CMS must allow the Americans most impacted by the IRA’s rules to have a voice in these regulations, while ensuring the accountability necessary to root out conflicts of interest.
Between the medicines CMS selected for price controls and who has a seat at the table, the only thing transparently clear is that CMS deliberations are concealed behind bureaucratic red tape.
CMS must implement the IRA with patient interests at heart, not those of bureaucrats, lobbyists, and activists. Lives hang in the balance.
Drew Johnson is a Las Vegas-based policy analyst, government watchdog, and columnist. He is a candidate for Congress in Nevada’s 3rd congressional district.
