How Joe Grogan, a former pharma lobbyist, upended Trump’s drug pricing agenda
WASHINGTON — As the Marine Band warmed up and White House aides scurried to set up chairs in a sun-soaked Rose Garden for perhaps the most consequential health care address of the Trump presidency, a brazen mid-level budget aide was battling to jettison the entire event.
President Trump was set to take the stage in barely an hour to unveil a “blueprint” to lower prescription drug prices. But on that afternoon in May 2018, Joe Grogan refused to sign off on either the remarks or the policy rollout.
Grogan, who found the document hasty and wrongheaded, launched a behind-the-scenes mutiny from Trump’s budget office, three former administration health officials told STAT. His actions infuriated health secretary Alex Azar, they said, and Grogan relented only after Azar’s staff shouted him down by speakerphone. Trump delivered his address, laying out a sweeping agenda to lower drug costs.
Still, the episode was the beginning of a larger effort from Grogan, undeterred by his scolding, to roll back the core of the administration’s drug pricing agenda.
Read more: How Joe Grogan shaped 5 key drug pricing policy proposals
The Trump administration has only rewarded Grogan’s unruliness: In a remarkable two-year span, he has vaulted from lobbyist for the pharmaceutical giant Gilead Sciences to White House budget adviser to director of the president’s Domestic Policy Council. Grogan’s chaotic ascent to the White House’s highest ranks, described to STAT in interviews with eight current and former Trump administration health officials and an array of conservative lobbyists, is defined more by feud than by policy triumph — and on drug pricing in particular, his track record consists more of blocking others’ policies than advancing new ones.
The White House declined to make Grogan, who rarely speaks to reporters on the record, available for an interview. His guerrilla policy takeover, however, has left in his wake a collection of resentful West Wing aides and disenchanted right-wing advocacy groups. Longtime GOP insiders have sought to downplay the friction, insisting Grogan and Azar have banded together to push Congress toward an unlikely drug pricing accord and finalize the administration’s more recent initiatives.
“There’s nothing wrong with squabbles — every family has them,” said Tommy Thompson, who employed both Azar and Grogan while serving as health secretary to George W. Bush, in an interview. Tension between budget advisers and cabinet secretaries pursuing costly new policies, he emphasized, is only natural.
“In Joe’s case and Alex’s case — I know both very well — there were some disagreements, not personality-wise, but the fact that they came down on different sides of different issues,” Thompson said. “You’ve got to realize: There is embedded friction to start out with.”
Trump’s campaign-trail pledge to “drain the swamp” of D.C. corruption included a bold pledge: His administration would refrain from hiring lobbyists. But the new White House budget director, former congressman Mick Mulvaney, missed the memo.
In one of his first personnel moves, Mulvaney plucked Grogan from his perch as Gilead’s head of federal affairs. Mulvaney hadn’t just violated Trump’s no-lobbyist pledge (Trump, in the end, hired hundreds) — to orchestrate his health care efforts, he had hired a top official from a company villainized for perceived price gouging, first for the hepatitis C treatment, Sovaldi, and later for its HIV-prevention drug, Truvada.
“What I thought originally was: Isn’t that interesting? He’s bringing in someone who knows where the bodies are buried,” said Joel White, a Washington policy expert who chairs a coalition of health industry groups and is registered to lobby for the trade group PhRMA.
In 2017, long before Azar’s arrival and with former health secretary Tom Price preoccupied by the GOP’s failed “repeal and replace” insurance reform attempts, Grogan even briefly orchestrated the White House’s drug pricing efforts, leading meetings of a “Drug Pricing and Innovation Working Group.”
At one gathering, he invited Robert Shapiro, a member of a Gilead advisory board, to present to the assembled policy staffers. Though the group never issued formal recommendations, Grogan was accused of giving drug manufacturers too large a platform. The meetings received little attention from White House higher-ups, and quickly fizzled.
But Grogan, eventually, confounded the expectation that he would shill for industry.
In fact, his highest-profile White House work has not been kind to major drug manufacturers. Aides have credited Grogan for almost single-handedly killing the Trump administration’s “rebate rule,” a counterintuitive policy, pushed largely by Azar, that the pharmaceutical lobby aggressively favored. Grogan feared the political fallout from banning rebates paid by drug companies to insurers, which could have been perceived as a drug company giveaway costing taxpayers nearly $200 billion in the next decade.
Grogan has also become the advocate-in-chief for an inherited project: the Trump administration’s “international price index” model, which would tie some U.S. drug payments to foreign prices. It is an unprecedented price-capping scheme for any administration, much less a Republican one, and conservative groups have staunchly opposed the idea despite Trump’s support. (Progressive Democrats, however, have embraced it wholeheartedly.)
And recently, Grogan has enthusiastically advocated for Trump’s plan to import prescription drugs from Canada — a worst-case scenario for drug manufacturers that many Republican policy experts have long opposed.
Nonetheless, the odd optics of Grogan’s shift on pharma have periodically haunted him. His role developing a new reimbursement policy for pricey, innovative cancer drugs known as CAR-T, in particular — a therapy Gilead began selling soon after Grogan joined the administration — has made him the focus of ethics probes by Democrats on the House Oversight Committee and the left-leaning watchdog group Democracy Forward.
Read more: Pelosi: Democrats will name marquee drug pricing bill for late Rep. Cummings
Grogan’s allies said his time at Gilead, in fact, pushed him closer to favoring aggressive price reforms outside the Republican mainstream. Sovaldi, in particular, is one of the most-tread examples of an international price disparity — Gilead has been criticized for charging roughly $1,000 per pill in the U.S. while licensing generic manufacturers to sell it for roughly $4 per pill in India.
“If you just think about the Sovaldi issue, you had all of the relevant discussions wrapped up in one,” White said. “Folks were saying this is going to bankrupt America and every Medicaid program in the country — but on the other side, you had people saying these are exactly the types of curative treatments we need.”
Those who have cast a wary eye toward Grogan’s industry past are missing the point, according to Douglas Holtz-Eakin, an influential conservative economist who has opposed several Trump drug pricing policies including the international price index and importation.
“People get the whole lobbyist thing wrong,” Holtz-Eakin said. “Lobbyists aren’t valuable because of cash or influence — they’re valuable because they know things. They’re smart.”
Grogan (center) sits next to President Trump during the inaugural meeting of the White House Opportunity and Revitalization Council with transportation secretary Elaine Chao in April 2019. (Chip Somodevilla/Getty Images)
Grogan’s willingness to challenge authority — the same trait that would later animate a West Wing shouting match, and his subsequent faceoffs with Azar — has been a throughline since his early days in Washington.
Even in 1995, when he worked alongside his roommate, Sean Spicer, as a junior researcher at the National Republican Senatorial Committee, Grogan cared little about the chain of command.
Grogan, a recent SUNY-Albany graduate, spent a single election cycle working at NRSC before beginning law school at the College of William and Mary. From basement-level desks at NRSC’s Capitol Hill offices, they spent their days archiving comments from the Congressional Record for use in future advertisements and fundraising campaigns.
By night, they’d retreat to their nearby rowhouse and pool their funds — they made roughly $4 per hour, Spicer recalled in an interview — for cases of beer. Yet when the holidays rolled around, a staff administrator informed employees they’d be expected to chip in $10 apiece to attend the committee’s Christmas party.
In a caustic reply-all that foreshadowed his Trump administration ascent, Grogan expressed mock delight. Who wouldn’t want to chip in two and a half hours’ pay, he asked, tongue in cheek, to spend the evening in a stuffy, smoke-filled room making small talk with his senior colleagues?
The message, Spicer recounted, landed Grogan a dressing-down from the NRSC’s then-executive director John Heubusch. But it also caught the eye of the committee’s finance director, Phil Smith, who admired Grogan’s prose so much that he offered him a promotion on the spot. Grogan, Smith said, went on to craft some of the most lucrative direct-mail fundraising campaigns in NRSC history.
“I did meet with him, and I did chew him out,” recalled Heubusch, who now works as executive director for Ronald Reagan Presidential Library. “It wasn’t really the subject. It was more him stepping out into a role he didn’t belong in at the time.”
Grogan’s brashness, however, has not abated since his early years in D.C., and at times he has tested the willingness of conservative organizations typically in lockstep with Trump to back the White House on health policy.
Conservative groups have argued the price-index proposal Grogan has championed “imports foreign price controls.” Even the right-wing Heritage Foundation and its political advocacy arm, Heritage Action, have spoken out publicly in a rare break from Trump.
“Any plan that ties American drug prices to an international price index should be a nonstarter for conservatives, whether it’s coming from Congress or from the administration,” said Jessica Anderson, Heritage Action’s vice president, who worked alongside Grogan for over a year in Trump’s budget department.
Advertisements from other conservative groups have even likened Trump’s drug policy to that of Sen. Bernie Sanders (I-Vt.), Trump’s most progressive challenger in the 2020 election, cautioning the president: “Don’t be a Bernie Bro.”
While Grogan is generally described as gregarious, he has enthusiastically played the role of counterattack dog. At one meeting in July, he lashed out against an assembly of Republican-leaning lobbyists and health policy advocates, warning with his voice raised that “the president will not be outflanked on the left on drug prices.”
The remarks were consistent with Grogan’s longtime self-identification as a Republican outside the mainstream, despite his years working as an HIV/AIDS adviser to Thompson and President George W. Bush. According to former coworkers, Grogan instead has long sympathized more with a populist, nonconformist brand of conservatism that Trump has come to personify.
His defiance of establishment GOP orthodoxy began, in a sense, before Trump was elected — in October 2016, when Republican brass was scurrying to distance itself from the party’s decidedly atypical nominee.
The reason: On Oct. 7, the Washington Post published years-old remarks that Trump characterized as “locker-room talk,” in which he bragged to a television host that he habitually grabbed women by their genitals.
On Oct. 17, with Hillary Clinton’s election appearing all but certain, Grogan made his only political contribution of 2016: a $2,000 check to Trump.
Three years later, his investment has paid off. Grogan is routinely photographed sitting next to Trump in high-profile meetings, and a rash of departures in recent months has left Grogan the last man standing from Trump’s original cast of health officials. But since his promotion, many conservatives have only come to view the administration’s remaining efforts — the price index and Canadian drug importation — as more disappointing.
“The president promised to do something about drug prices,” said Holtz-Eakin, the economist. “The president has thus far done nothing about drug prices. This strikes me, increasingly, as almost desperate.”
Grogan talks with media at the White House in October 2019. (Carolyn Kaster/AP)
A year after Grogan’s attempt to quash Azar’s drug pricing “blueprint” and to cancel the president’s Rose Garden address, the tables had turned. Over Azar’s protestations, Grogan, with Mulvaney’s backing, was arguing that Trump’s “rebate rule” — a centerpiece of that very blueprint — should be withdrawn.
This time, Grogan won.
The rule, in his view, was a handout to drug companies, a burden to taxpayers, and risked leaving Medicare beneficiaries on the hook for higher premiums. Trump sided with Grogan and officially killed his health secretary’s signature drug pricing proposal.
It was the third blow in two months to Azar’s blueprint — in essence, the outcome Grogan had agitated for in May 2018.
Days before, a federal court had thrown out another of the blueprint’s key elements: Trump’s effort to force drug companies to include list prices in television advertisements, which had garnered Grogan’s skepticism on the grounds that it failed to pass First Amendment muster and would do little to lower prices.
And two months earlier, Grogan struck his first blow, forcing Azar to withdraw his attempt to reform Medicare’s “protected class” requirements, which would have allowed insurance plans to end coverage of medications for mental health conditions and rare diseases if their prices increased faster than inflation. Grogan was particularly fearful of the political fallout associated with denying coverage for expensive antiretroviral drugs — and the ensuing blowback from HIV/AIDS groups.
Grogan appeared to relish his clashes with Azar’s staff, according to former White House aides. He also feuded with Domestic Policy Council members before his promotion to lead the panel in February 2019 — especially once Mulvaney was promoted to acting White House chief of staff in December 2018.
Grogan has also benefited from Azar’s about-face on the policy that ties U.S. drug prices to international ones. The May 2018 blueprint was starkly opposed to that proposal, declaring that capping U.S. drug costs based on overseas prices would fundamentally threaten access to cutting-edge treatments.
Six months later, however, the administration unveiled a policy that did exactly that: It would cap U.S. payments for some Medicare drugs based on overseas prices in Canada, Japan, and an array of developed European countries.
While aides said the idea was not Grogan’s, he has come to enthusiastically support the proposal. He has even developed a brief tirade, available on demand, about pharmaceutical companies that house intellectual property in Ireland and manufacture medications in Canada only to sell them in the U.S. at — in his view — an egregious markup.
With Grogan’s support, the administration has also dramatically shifted its stance on foreign drug imports. It is another dramatic reversal for Azar, who as HHS general counsel in 2005 sat on a commission that declared Canadian drug imports a threat to American patient safety.
A decade and a half later, Azar — who, like Grogan, worked for a major pharmaceutical manufacturer in the interim — is enthusiastically supporting an importation plan that policy experts largely view with skepticism. The plan, aimed at giving Americans access to the cheaper drug prices offered beyond U.S. borders, fits perfectly into Trump’s “America First” worldview.
“This is the president’s position, and Alex is his secretary,” said Thompson, the former health secretary who created the 2005 task force. While Thompson said there is “nobody more knowledgeable” on drug pricing than Grogan, he called Azar a “genuine convert” on much of the Trump administration’s policy.
“Alex has evolved,” Thompson said, “and rightly so.”
Yet with the 2020 election looming, the Trump administration has little to show for its drug pricing efforts, thanks in large part to Grogan’s resistance. Instead, the White House’s messaging has focused on drug importation and international price caps — two atypically Republican policy ideas that may never be implemented.
Washington policy experts are split as to whether the administration’s broader strategy is deliberate or pure bluster. But few dispute Grogan’s overall impact.
“They’re being surprisingly aggressive for a Republican administration,” said Gail Wilensky, an economist who has served as a top health policy official to multiple Republican presidents. “If so, it’s because [Grogan] has peeked under the covers and knows more than most of us.”
