Billionaire Philanthropist John Arnold Goes After Drug PricesBy
Arnold-backed group pushes for Medicare drug negotiations
Former trader has donated $12 million to drug pricing research
A billionaire philanthropist who made his fortune making contrarian bets on natural gas has set his sights on a new target: drug prices.
John Arnold, a former Enron Corp. trader who left his fund five years ago to focus on giving away his money, donated $500,000 to a newly formed group called Patients for Affordable Drugs, whose main policy goal is lowering U.S. drug prices.
The organization advocates giving Medicare, the government program for the elderly, the ability to negotiate drug prices directly with manufacturers -- something Big Pharma has long opposed and dreaded. The debate over price negotiating was reignited this year by President Donald Trump, whose administration has signaled that he might push Congress to allow the government to force drugmakers into bidding wars in order to help reduce health-care costs.
This isn’t Arnold’s first foray into drug costs: his foundation, which he runs along with his wife Laura, donated more than $12 million to fund research on the issue. With the grant to Patients for Affordable Drugs, the Laura and John Arnold Foundation is supporting a small organization that has pledged not to take funding from any company making money from medications, including drugmakers, pharmaceutical benefit managers, and health insurers.
“Arnold funds a lot of people doing drug price work,” said the group’s founder David Mitchell, a former political consultant who is on several therapies to fight the rare blood cancer multiple myeloma. Besides the Arnolds’ grant, the group’s only major source of funding is Mitchell himself and his wife, who have pledged to give $75,000 a year for the next three years. They’re looking for more donors.
Through Mitchell’s group, the Arnold foundation declined to comment.
In 2012, after accumulating a $4 billion fortune trading on natural gas prices at Enron and his hedge fund Centaurus Advisors, Arnold retired at 38 to spend time giving away his money. His foundation’s choices have been untraditional.
The pair personally funded a police aerial surveillance program in Baltimore, sought to save state pension funds by cutting payments to pensioners, and are now battling what they consider bad science, according to Wired. Between 2011 and September of last year, the couple agreed to give out grants of more than $680 million.
Americans spend more on prescription drugs than anyone else in the world -- unlike most rich countries, the U.S. doesn’t directly regulate medicine prices. Drugmakers are facing new pressure under Trump, who told pharmaceutical executives last month that pricing was “astronomical.” But to give Medicare the power to negotiate requires an act of Congress, which may not be forthcoming.
Patients for Affordable Drugs aims to gather stories of how people are struggling with expensive therapies and get them in front of politicians, Mitchell said. The group will also try and create an online community that can be organized for political action.
The Laura and John Arnold Foundation last year posted a letter expressing alarm at the fact that drug prices have soared in recent years and patients are often forced to fall back on pharmaceutical-company backed co-pay assistance plans. Over the past two years, the Arnolds funded various groups working to evaluate how effective therapies are, and what they’re worth to patients.