Another week, another Senate hearing! For most of the country, that meant Attorney General Jeff Sessions’ testimony. But over in our neck of the woods, we’re talking about the Senate HELP Committee hearing on drug prices, which reminded us that healthcare reform is still on everyone’s minds.
But you know we’ve got more. So without further ado, this is The Week That Was.
DRUG PRICING STILL HIGH ON DC PRIORITY LIST
Last week, senior Trump administration officials began drafting an executive order designed to curb the rising cost of pharmaceuticals. Earlier this week, Biocentury reported that the order will instruct executive agencies (including Cabinet departments like HHS, Defense, and Education) to use value-based contracts for drug purchases. Pricing thought leader and Allergan CEO Brent Saunders immediately responded on CNBC’s “Power Lunch,” saying value-based contracting “is a good thing and ultimately will lead to a more clear and transparent system for drugs because it is pretty complex today.” Saunders, who initiated the first industry “pricing pledge” last fall, noted, “We have seen companies start to be, I think, a lot more responsible and a lot more focused on finding the right equilibrium between pricing and access and the ability to invest in innovation to procure the treatments of new diseases.”
On the legislative front, Senate Finance Committee Ranking Member Sen. Ron Wyden (D-OR) introduced the SPIKE Act, which would require companies to publicly explain the reasons for “exorbitant” price hikes—defined with a complex formula that includes those drugs within the top fiftieth percentile of net Medicare or Medicaid spending that have had a price increase of at least 15% over one year. While the formula for reporting is more complex, the bill, in spirit, appears to mirror Vermont’s drug price transparency law.
While news of the executive order sent drug stocks lower last week, but the true impact of such a directive remains to be seen. First, there are the logistical challenges raised by value-based contracts. From the reports, it’s unclear if the agencies would develop agreements similar to those currently used by some private payers, which require tracking and analyzing patient-based outcomes data. Another option would be requiring drugmakers to submit comprehensive dossiers of health outcomes data to achieve formulary status—similar to health technology assessments (HTAs) used in Germany and the U.K. Either way, acting on value-based contracting would necessitate significant protocol development, not to mention face judicial review, should Congress feel that the President has overstepped into policy-making.
By making this announcement, the Administration is likely trying to recapture some populist support, while Wyden and the Democrats are re-asserting themselves as healthcare reformers by introducing pricing-focused bills. What does that mean, really? Drug pricing may be the one issue that can unify public opinion in what continues to be a deeply divided country—and that means that pharma will continue to be a policy target despite the ongoing turmoil in Washington. We continue to advise clients to get ahead of this criticism by understanding the environment for their particular product—from the marketplace to the policy landscape to the court of public opinion—before making any pricing decisions. And remember that no medicine or company is safe from scrutiny. Media coverage of orphan drug costs has increased three-fold year over year, so medicines that were previously immune to detractors are now under the microscope as well.
VEGGIES, WITH A SIDE OF LINGUISTICS
You say “to-may-to,” I say “to-mah-to.” Right? Well, maybe not. A new study from JAMA highlights how language can affect our eating habits. A study of 28,000 diners in a Stanford University dining hall found that the way vegetables are labelled impacts how much people want to eat them. At self-serve food stations, researchers named the same vegetable dishes four different ways: plain (e.g., “beets”), healthy with a positive take (e.g., “high-antioxidant beets”), healthy with a restrictive take (e.g., “lighter-choice beets with no added sugar”) and “decadent” (e.g., “dynamite chili and tangy lime-seasoned beets”). All the dishes were identical, except for their labels. In the 46-day study, the vegetable dishes with the “decadent” labels outperformed all the other categories. And not only did patrons choose the “decadent” vegetable dish over the other vegetable dishes, they ate more vegetables overall.
You may have heard a rumor that The Week That Was team runs on kale. While we won’t confirm or deny that, we will say that this study is a great example of the power of savvy communications, and specifically, the value of careful word choice. In this 140-character world, we often find ourselves settling for the quickest and most efficient way to tell a story. And even when we have the time or room on the page, choosing the right language can be tricky. But don’t call the whole thing off. This study demonstrates the behavior-changing potential of language; and in this case it carries real health benefits. Companies shouldn’t forget the power of thoughtful messaging. And give us a call if you need help; we have a word-of-the-day calendar.
BREAKING THE CYCLE OF BAD PRESS COVERAGE
Just when you thought the negative media ride was over… Transit disruptor Uber has been fighting bad press for leadership issues, culture, and questionable business practices basically from its inception. Earlier this year, a former employee exposed widespread issues that finally pushed the company into action. Uber hired independent investigators led by former Attorney General Eric Holder to make recommendations for improvement, which were released in a report this past week. Changes to senior leadership, trainings, and improved policies topped the list. That same day, the company announced that co-founder and CEO Travis Kalanick would be taking a leave of absence for an undefined period of time—a move that many said signaled maturation of a company that is looking to go public in the not-too-distant future. Then, ironically, a board member made a demeaning remark about women during town hall event scheduled to discuss the report and the company’s culture. Employees lodged complaints and the board member resigned shortly thereafter.
While start-up founders are often lauded for envelope-pushing, we noted last week that more companies are moving to replace leadership at the first hint of poor behavior. Emphasizing all of the significant steps a company is taking to remedy issues—including executive turnover—can help balance the coverage—but don’t forget the importance of internal comms. Employees are incredibly influential in the public discourse, either providing credible reinforcement of positive changes or highlighting disconnects between corporate messaging and actions.
And if you’re looking for a laugh as you start your week, check out how social media responded to the Amazon-Whole Foods deal.
Have a good night, we’ll be seeing you next week.
– The Issues Management Practice @inVentiv Health Communications