By Bridget Dandaraw-Seritt, Community Impact Manager
Healthcare costs are out of control and care is becoming increasingly unaffordable. Coloradans are asking for relief from the high costs that occur, even with insurance coverage. One area in particular is drawing the ire of patients and legislators – drug pricing. In 2021, Colorado passed legislation that seemed to address drug costs. On the surface, it looked like Coloradans were asking for affordable medications, but a deeper dive into the policy’s origins reveals a very different picture. Reform is desperately needed, but what happens when a grassroots movement becomes a dark money experiment? Instead of an objective analysis to find real solutions, we have a complicated policy only being looked at through one lens. These policy experiments come from a highly curated, one-sided ecosystem that doesn’t have the patient’s interest in mind. Let’s look at the Colorado Prescription Drug Affordability Board (PDAB) as an example.
Energy hedge fund managers generally don’t insert themselves into healthcare policy, but that’s exactly what John Arnold has done. Arnold is most known for his role managing energy assets for Enron, a company whose bankruptcy scandal led to over 30 convictions from securities fraud to insider trading. These days, his fingerprints can be found influencing healthcare policy through his dark money LLC, Arnold Ventures. A deeper look at PDAB policy revealed a single funding source that supports the research, the advocacy, the “technical assistance,” and the expert infrastructure used by states to implement the policy. The line between independent regulatory reform and coordinated influence is blurred and it starts to look like an orchestrated experiment at the expense of the patient.
For years, Arnold Ventures has promoted “model legislation” around Prescription Drug Affordability Boards (PDABs). These Boards are sold to legislators as a way to lower the cost of medications for consumers, or patients. The policy doesn’t task Boards with studying the drivers of medication costs, addressing barriers to access, or looking for ways to lower costs along the supply chain. It gives an arbitrary board the authority to decide whether they think a medication is affordable and the authority to impose a reimbursement cap, or upper payment limit (UPL).
To promote these policies, Arnold Ventures “donates” to healthcare advocacy groups like Colorado Consumer Health Initiative (CCHI) that will lobby on behalf of the policy. They use data from sources funded by Arnold Ventures, like Institute for Clinical and Economic Review (ICER), then fund the contractors like PORTAL offering “technical and expert assistance” to state agencies implementing the policy. This has included coordination, strategy, and guidance across multiple states pursuing similar policy frameworks.
ICER creates the quality adjusted life year (QALY) used by healthcare platforms to determine the value of covering a particular drug. This data is so controversial that it’s been banned under the federal 504 regulations for being discriminatory towards the elderly, disabled, and chronically ill. PORTAL, also funded by Arnold Ventures, has contracts in multiple states facilitating data compilation for PDABs, including Colorado. This shows that PDAB policy is an integrated ecosystem, funding research, supporting advocacy organizations, advising policymakers, and shaping implementation across states – not grassroots healthcare reform.
That overlap raises critical questions about transparency and intention. If all the entities involved are tied to one dominant financial donor, is the public’s interest truly being served or is this an organized agenda? Real reform would mean looking at objective sources to study the problem to find actual solutions. Instead, this dark money policy revolves around a “solution” without realistically assessing whether or not it appropriately handles drug affordability. It doesn’t allow the Board to look at insurance plan design, the role of pharmacy benefit managers in drug pricing, formulary placement competition, or cost shifting. Without a holistic approach to prescription drug costs, hyperfocusing on manufacturer pricing has a greater chance to hurt patient access than truly helping curb costs.
States are not responsibly conducting their due diligence, vetting conflicts of interest, and protecting their citizens. Patients are already stretched thin and PDAB policies only add to the murky landscape we already navigate. Legislators, state agencies, and lobby groups won’t have consequences when dark money policies fail, but we will. Access to medications is critical for our community to thrive, so we cannot continue allowing policy experiments that threaten access.