Billionaire Activist Has Invested Over $100 Million for Cheaper Meds
John D. Arnold, a billionaire hedge fund manager who made his fortune on energy stocks, is now taking on the cost of high prescription drugs. The Texas-based Arnold has spent more than $100 million on health-related grants since 2014, with a significant portion dedicated to cheaper medications.
Arnold, The Wall Street Journal first reported, has backed Civica Rx, a non-profit generic drug company that was announced earlier this year by multiple healthcare systems. Arnold has provided the startup at least $1 million, the Journal said. As Biospace reported earlier this year, Civica Rx’s first drug could launch in 2019. The new company is promising transparent pricing without rebates common to the industry.
In addition to Civica Rx, Arnold has also provided nearly $6 million to another organization dedicated to bringing more generics to market. Arnold gave $5.7 million to Initiative for Medicines, Access & Knowledge Inc., which, the Journal reported, “files legal challenges to the validity of certain U.S. drug patents, to clear the way for lower-cost generics.”
Not only has Arnold funded the groups developing cheaper generic options for high-priced medications, but he has also funded research that examines the relationship between pharmaceutical packaging and drug costs, the Journal said. That research led Medicare to pass new rules last year that required drugmakers to justify steep price increases in medications, the Journal said.
The Wall Street Journal noted that Arnold also provided $19 million to the Boston-based Institute for Clinical and Economic Review so it could research whether the price of various drugs actually reflect their health benefits. The Journal said ICER often comes to the conclusion that the drugs do not reflect that. As an example, the report noted that ICER has said some opioid medications marketed as having “abuse-deterrent” formulations, are not cost-effective.
Arnold told the Journal that a common belief among Americans is that the pharma industry is “abusive” in its tactics and “doesn’t price drugs fairly.” As could be expected, the pharma industry has not taken too kindly to Arnold and is spending a considerable amount of money to counter his efforts, the Journal reported. As an example, the Journal said the pharma industry lobbying group BIO (Biotechnology Innovation Organization) has raised concern over Arnold’s actions, calling them “an increasingly coordinated effort” to focus on pricing. In May, BIO distributed a paper to a meeting of member company executives titled “The Arnold Foundation’s $49 million Web of Influence.” The paper listed groups that received funding for drug-price projects, the Journal reported.
The high price of prescription drugs has taken center stage in recent years and has even become a key talking point for President Donald Trump. Finding ways of lowering the cost of prescriptions is a central theme of his administration’s health care reform blueprint. Earlier this year, Trump was able to claim a victory after forcing Pfizer to back down on a second round of price hikes for about 10 of its prescription medicines. Despite Trump’s victory with Pfizer and his blueprint, a recent industry analysis shows that drug prices have continued to climb.
Arnold and his wife have set up a foundation to use his funds to further this mission. The foundation has assets more $2.2 billion and employs more than 70 staffers in Texas and Washington, D.C. In addition to healthcare concerns, the Arnold foundation provides funds for other causes, such as criminal justice, education and public-employee pension systems, according to the Journal.