It was a cold February 2010. The winter of Obamacare. There was active opposition from Republicans, the Democrats had lost a pivotal Senate seat in Massachusetts after the death of Edward Kennedy, and there was increasing ambivalence by the general public around President Obama’s healthcare proposal.
Even within the administration itself, people were saying, “Let’s move on, let’s move on, healthcare reform is dead, dead DEAD.”
Then, WellPoint happened.
In early February, WellPoint’s subsidiary Anthem Blue Cross Blue Shield announced it was raising insurance premiums on individual policies in California and Indiana by 39%, with price increases expected in nine other states as well.
There was a firestorm of reactions. Health and Human Services Secretary Kathleen Sebelius wrote a letter to the president of Anthem voicing serious concerns about the increases. Wellpoint’s CEO Angela Braly was forced to testify before Congress.
And suddenly, healthcare reform was back on the front burner. WellPoint couldn’t have chosen a worse time to raise its prices. If it had waited even six more months, it’s very possible that healthcare reform would have faded away for lack of interest and urgency.
But instead, WellPoint handed Obama a public relations coup. Very quickly, WellPoint became exhibit A in the court of public opinion arguing that the health insurance industry was unfairly profiteering.
It was a watershed moment. A WellPoint Moment.
Overnight, media outlets, editorial boards, social media, and politicians were demanding health insurance reform. Republicans were back on their heels. Democrats were able to seize the moral high ground and they passed the reform bill on March 21, 2010 which was then signed into law by the President late that night.
Barely a month after it seemed like healthcare reform was dead, WellPoint’s move on pricing became the political catalyst for historic changes that are still being felt today.
Is this pharma’s WellPoint Moment?
Last year there was an uproar over Gilead’s pricing on Sovaldi for Hepatitis C. Economic pushback from insurance companies and PBMs along with new competitive alternatives, however, forced Gilead to negotiate discounts. The issue slipped off the front page.
Then the young and brash Martin Shkreli, CEO of Turing Pharmaceutical, jacked up the price of a generic drug by over 5,000%. Shkreli couldn’t have chosen a worse time.
Election cycle candidates, both Republicans and Democrats, began calling for price reforms and/or pricing limits. Reporters began looking at other recent drug price increases. Valeant was served two federal subpoenas related to its pricing.
For those in pharma who may have hoped this issue would fade away like last time, their hopes were in vain. It was a hot topic in the recent primary debates, and Hillary Clinton has recently called on the FDA to accelerate approval of generic competitors and asked the FTC to investigate what she called “anti-competitive price gouging.”
This may be a WellPoint Moment for pharma.
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