Members of the House Health Care Committee went head to head with a representative of one of the nation’s most powerful lobbying groups Wednesday.
His name is John Murphy, and he is the assistant general counsel for the Pharmaceutical Research and Manufacturers of America, also known as PhRMA.
For more than an hour, Murphy argued against H.866, a bill lawmakers are writing that would require his industry to provide information on how companies price their drugs. He raised his voice, rolled his eyes and, as lawmakers pushed him harder, began to talk in circles.
Murphy made several things clear: There’s no one price that pharmaceutical companies charge for their drugs. The price a patient pays at the pharmacy is not directly based on research and development costs. And if several states enact laws requiring price transparency, the costs for drugs will go up.
“What is the goal of legislation like the one being discussed here in Vermont?” Murphy asked. “Is the goal to simply require manufacturers of pharmaceuticals to undertake another compliance obligation? Some of the things which are called for in this bill are effectively unreportable or would have to be fictitiously decided or attributed from a financial statement.”
Rep. Chris Pearson, P-Burlington, who is spearheading the bill, began pushing back.
“I’m wondering if you could point us to specific areas that are a concern and areas that you’d like to see improved or could offer suggestions,” Pearson said. “We would like to have a better understanding.”
They went back and forth for a minute.
“Well, one would be not having competing compliance costs in multiple states because all that does is add costs to the system,” Murphy replied. “I just don’t think that disclosing a set of numbers is going to get anything productive out of it.”
Rep. Doug Gage, R-Rutland City, stepped in. Gage said the current version of the bill would require companies to provide only information they say is “pertinent” to how the price of their drugs is set. He then offered to add a confidentiality provision to the bill to address Murphy’s concerns.
Murphy said “pertinent” is in the eye of the beholder and that confidentiality agreements don’t mean much because the federal government has figured out how to hack into a terrorist’s iPhone without Apple’s permission.
They went back and forth.
Murphy said only 15 percent of pharmaceutical companies make money. He said Vertex Pharmaceuticals wasn’t making money for several years. (The company manufactures the cystic fibrosis drug Orkambi, which is expected to cost Vermont’s Medicaid program up to $250,000 per patient, or $3 million in the current fiscal year.)
Rep. Anne Donahue, R-Northfield, told Murphy that, unlike many people he may meet, she doesn’t have a general problem with pharmaceutical companies. She said she simply wants to understand their pricing mechanisms, even if the information provided means she would end up defending the prices they charge.
“Put up or shut up,” Donahue said. “Stop complaining about how ‘We’re being picked on’ by telling us how did you come up with a price. … We’re simply trying to ferret out for the sake of public-state understanding. And understanding is about eliminating myths, eliminating the mystery around how some of this happens.”
“You say you’ve got all these other reporting requirements,” she continued. “Well, I would love to know — what do you report to the (Securities and Exchange Commission)? And why can’t that simply be the basis for (what you report in this bill)? I don’t see how it’s not in the industry’s best interest to do that and provide it.”
Rep. Mark Woodward, D-Johnson, was typing on his iPad while Donahue was speaking. He told Murphy that Vertex “must be doing something right” because the company spent $1.3 million on lobbying last year.
Murphy rolled his eyes.
