Drug industry nervous about Grassley’s new role

The drug industry is gearing up for a new threat in January when Sen. Chuck Grassley (R-Iowa) takes over as head of the Senate Finance Committee.

Drugmakers will soon lose a reliable ally in Sen. Orrin Hatch (R-Utah), the retiring committee chairman who has been viewed by industry lobbyists and drug pricing advocates alike as a major roadblock to reform efforts pushed by Democrats and even the Trump administration.

{mosads}Grassley, who wielded the Finance Committee gavel from 2003 to 2007, has taken a much more antagonistic approach to drug companies and is well known in Washington as a dogged investigator.

“He has a history of being unafraid to flip over rocks,” said Rodney Whitlock, a consultant at ML Strategies who previously worked for Grassley as acting health policy director for the Finance Committee. “Any stakeholder that has a role in drug pricing should assume he’s going to be asking questions.”

Industry sources characterized Grassley as a free-market driven legislator willing to work with Democrats on certain issues.

For example, as recently as September he teamed up with Sen. Dick Durbin (D-Ill.) to legislate that television advertisements for drugs be accompanied by price disclosures. The measure was ultimately blocked by House Republicans.

“It is EMBARRASSING to bow to BIG PHARMA at expense of consumers,” Grassley tweeted at the time.

His penchant for bipartisanship, combined with a Democratic House looking to take action against the industry for price hikes over the years, means drug companies could be in for a serious fight next year.

{mossecondads}“We fully expect to be investigated and are under no illusions that Finance won’t take part in it,” an industry lobbyist said. “There are members of [the Finance Committee] that are a little more sympathetic, but he’s the chairman and he will do what he wants to do.”

Grassley last week said he would step down from his position as Judiciary Committee chairman to succeed Hatch as head of the Finance Committee.

In a brief statement about his priorities, Grassley said he would focus on “improving the affordability, quality and accessibility of health care, including in rural America,” among other issues.

The Finance Committee is one of the most powerful in Congress. It was at the center of the health-care and tax reform debates of 2017 and also has jurisdiction over trade and the major entitlement programs: Social Security, Medicare and Medicaid.

Democrats say Republicans have gone too easy on the pharmaceutical industry, and they’re vowing that things will change when they take control of the House next year.

Those same Democratic lawmakers are promising investigations into rising drug prices as well as a push to allow the importation of cheaper medicines from other countries and allowing Medicare to negotiate prices with pharmaceutical companies.

Grassley is a longtime supporter of importing drugs from Canada, a position that isn’t shared by many of his GOP colleagues.

President Trump has talked tough on drug prices and supported both importation and Medicare negotiation on the campaign trail. But Democrats say he hasn’t followed through on either since he’s taken office.

Still, when the Department of Health and Human Services earlier this year announced a task force to explore importation as a way to increase competition and bring down drug prices, Grassley praised the decision, calling it “long overdue.”

“This has been an ongoing problem for more than 20 years and it’s way past time to make real progress and help millions of Americans who struggle to pay exorbitant prices for their medications,” Grassley said in a statement.

The Iowa Republican is also a champion of transparency. He’s the author of the Physician Payments Sunshine Act, which requires mandatory disclosure of gifts given to doctors and hospitals by pharmaceutical companies. It was included as part of the 2010 ObamaCare health law.

He also has introduced legislation that would stop an industry practice called “pay-for-delay”— when a brand name drug company pays generic manufacturers to delay bringing their cheaper, generic versions of a drug to the market. The measure stalled after it was introduced, but earlier this month Grassley and Sen. Amy Klobuchar (D-Minn.) wrote to Trump urging him to support the bill.

Grassley has “pushed an agenda of transparency that others have avoided,” one industry source said. “These are not just position papers or paragraphs on his website. He’s put his neck out on things like price disclosure. He’s not hiding that he’s willing to be confrontational with industry on certain issues.”

Drug pricing advocates said Grassley will be a key proponent in their corner.

“We’re glad to have such a strong advocate as Grassley at the helm of Finance,” said Lauren Blair, spokeswoman for the Campaign for Sustainable Rx Pricing. “When you look at all the leadership he’s done on bipartisan legislation, it’s very clear that Grassley is going to use the gavel to take action in a bipartisan way.”

A former GOP aide said the combination of Grassley leading the Finance Committee and House Democrats in the majority mean drug companies will be facing a very different landscape next year, and executives should be more than concerned.

“They should be terrified,” the former aide said. “Grassley won’t be a wallflower. He’ll definitely be a proactive chairman. It’s about to become a very different world for the drug companies.”

Yet industry lobbyists said they are hopeful Grassley won’t be as tough on drugmakers compared to House Democrats like Rep. Elijah Cummings (Md.), who’s expected to be the next chairman of the House Oversight and Government Reform Committee.

“As far as Republicans in the Senate are concerned, Grassley is among the worst as far as industry is concerned … but still not as big a concern as Democrats in House will be,” one industry lobbyist said. “And he won’t be as aggressive as someone like Cummings will be in the House.”

Grassley “has strong bipartisan tendencies” but he’s still a Republican, another lobbyist said, adding that there are some lines Grassley won’t cross, like Medicare price negotiation.

“On transparency, he simply sees good government — he wants to know where the money is going,” the lobbyist said. “But he sees himself as a neutral arbiter, so he won’t be out just to screw pharma.”