Last night, former President Bill Clinton was interviewed on CNN about health care reform. Health policy junkies should check out the whole thing. After all, we're the only ones who think "failed health care plan" as the main legacy of the Clinton era. (Watch the CNN video here; read the transcript here.)For biopharma, companies, though, the interview underscores the sense that much has changed since 1993--when "pharmaceutical profiteers" were the all-purpose villain in the health care debate--and 2009, when Big Pharma quite literally has a seat at the table on reform. (Two, actually).
But it is also a reminder that this ain't the Bush years.
The interview was a reunion of sorts, with CNN's Sanjay Gupta posing the questions. Gupta began by noting his own background as an advisor to the health care reform task force, and adding that he withdrew his name as a candidate to be surgeon general under Obama. When Gupta asked about "drug costs" and how to bring them down, we sat forward in our seats.
Here is what Clinton said in response...
"There is a very simple answer to this, which is that we have made a bargain with our pharmaceutical companies. We've said to them for decades now, 'We love having you in America. We're proud of you. We know you have to spend a lot of money on research and then you market the drugs and all. So we will eat our research and development costs in American prices so that you can sell exactly the same drugs you sell to us for less money in Canada and Europe.
"For example, our AIDS clinic down the street here in Harlem, the taxpayers pay $10,000 a year to treat people with the big pharmaceutical companies' AIDS medicine. That medicine costs about $3,500 a year in Canada and Europe, countries with per capita incomes as high as America. Keep in mind, Europe has a lot of very successful drug companies and they don't do this.
"We need an honest, open, clear dialogue admitting that we're proud of these companies. They've got tens of thousands of employees. They've done a good job for America. They've saved countless lives. But we just can't go on subsidizing [more than] our other competitors can.
"So how can we reach a different arrangement so that we keep the drug companies healthy enough and we keep them developing new medicine?
"The system we've got is not working very well. They don't have a lot of new medicines in the pipeline, partly because so many new advances, particularly with the sequencing of the human genome, have led to patents on smaller and smaller and smaller components of what ultimately becomes a blockbuster drug. So a lot of new drugs are not coming because we haven't reexamined how the patent process and the research process are working together, or not working.
"Meanwhile, we keep eating all these costs, and countries just as wealthy as we are are getting the same drugs made by the same people for less money, which is why there was so much [discussion of] allowing re-importation from Canada.
"What I recommend is, let's don't pretend these drug companies are bad people. They've done a lot of good for us. But let's be honest that America is no longer so dominant over Canada and Europe and Japan that we can afford the whole subsidy.
"One good place to start is what President Obama has proposed, letting the federal government do what I do for AIDS drugs, letting them bargain for lower prices for well-established medicines bought in bulk for the benefit of our seniors. That's a good place to start. And we just need to work out a new deal with them so they can do well.
"But, you know, for most of the 1990s and the early part of this decade, they earned 18 percent, which is a huge return. You know, Wal- Mart is, what, 5 or 6 percent. And it is fascinating to see that at the same time, because of a lot of these factors relating to patenting and scientific advances, the number of new drugs in the pipeline seems to be slowing down.
"So we need to examine both how we can both get the benefits of genomic advances and how we can lower the cost to the consumers."
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