Politics. I would like to be the first to congratulate Sen. Bob Menendez on his corruption charges.
Not the alleged corruption itself; no one wants that.
It is Sen. Menendez’s loyal adherence to old school tactics that are worth celebrating in some small way.
Sen. Menendez did not reap his ill-gotten gains from a book deal. No one would have believed he might have written a book or knew someone who could. Open ridicule would have ensued as lobbyists, bundlers, hacks, and flacks stuffed the unread tome into broom closets and conference room credenzas. The potential for a Politico expose was too great a risk.
Neither did Sen. Menendez engage in the street theater that is the modus operandi of his party to stimulate the flow of donations to the ActBlue platform. Even his most charitable supporters would have been incredulous had the Senator paraded through Trenton with a casket – a tactic recently employed by a small group known as the Tennessee Three – to protest gun violence.
Nor did Sen. Menendez threaten to regulate an industry. Sen. Menendez’s 2018 corruption trial has left him on the back bench where the specter of government oversight is rarely raised. He did not send nasty grams to the Department of Justice asking for investigations into this company or that. Lord knows, there isn’t another man trying to stay away from the corner of Pennsylvania and 10th Avenue as much as the Senator from New Jersey.
No, Sen. Menendez took gold bricks and wads of cash he stuffed into closets in exchange for helping out a foreign government.
New Jersey style.
Ahh the good old days.
Policy. If Sen. Menendez had updated his approach to extortion and bribery, he might have gone full Elizabeth Warren on the bio-pharma industry, one of the biggest employers in his home state of New Jersey.
He chose to stay old school and, together with former Sen. Orin Hatch, President Barack Obama and others, shielded the industry from the modern form of regulation that makes the big bigger and innovation a quaint notion from the 1980s.
This policy “error” has created a giant vampire squid that makes Goldman Sachs look like calamari.
The Affordable Care Act imposed no significant regulatory burdens on drug manufacturers. As the only major sub-sector in the complex health care ecosystem, pharmaceutical industry got the job of raising prices for the benefit of everyone else.
(More on this Wednesday when we present our work on PFE in this context. Link here.)
Bio-pharma made some effort to call attention to the practices of pharmacy benefit managers but, until recently has ignored the role played by wholesalers, self-insured plans, non-profit hospitals and the government. When regulation finally came in the form of the Inflation Reduction Act, Congress looked just one way – to PhaRMA.
PhaRMA and BIO’s members must now wonder if they should have been called Elizabeth Warren.
Power. The soft corruption of regulation and/or its threat has become as obvious as the stacks of gold bars in Sen. Menendez’s New Jersey closet. It is so apparent that it is the topic of humorous talks like this one from Bill Gurley.
The current attitudes toward regulation and regulators beg the question of compliance. Regulatory compliance, after all, is mostly an honor system. What enforcement there is health care usually falls to the states. Only the most egregious cases get prosecuted.
Meanwhile, the states have become less deferential to the federal government. California, for example, moved to regulate drug prices well before Congress was able to pull it off.
If the federal government’s moral authority falls on its present tendency to regulate for the sake of power and not protection of the citizenry, what power does it really have?
The answer indicts the body and not just one Senator from New Jersey.
Have a great rest of your weekend.
Emily Evans
Managing Director – Health Policy
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