One of President-elect Joe Biden's closest advisers could come under pressure to retire from working on some of the new administration's key initiatives as his brother campaigns for at least two pharmaceutical companies.
Steve Ricchetti, who was named advisor to the president in Biden's later administration on Tuesday, has a brother, Jeff, who, according to disclosure reports, was hired to promote pharmaceutical companies while Biden was running for president. Ricchetti was Biden's campaign chairman and previously his chief of staff.
Biden's campaign was based in part on the idea of lowering drug prices. Some of these companies are known to have high drug costs. According to ethics experts, if Biden drives prescription price lowering policies, Ricchetti may have to pull out because his brother could get a financial advantage from the same industry that all administration is trying to regulate.
"The option for Steve Ricchetti is to withdraw from involvement in White House political affairs that directly and materially affect his brother's finances," said Paul Ryan, vice president of politics and litigation for Ethics Watchdog Common Cause, on Tuesday across from CNBC. "I think it is fair to expect officials to withdraw from government decisions that could financially benefit their immediate family members."
Steve and Jeff Ricchetti co-founded their self-proclaimed lobbying shop over a decade ago. While Steve Ricchetti has not lobbyed since Biden took office, Jeff Ricchetti is still a registered lobbyist.
Jeff Ricchetti began lobbying for UK pharmaceutical company GlaxoSmithKline in September. He started working at Horizon Therapeutics a month earlier, which is based in Ireland and was once known as Horizon Pharma.
According to records, the company made at least $ 270,000 in the third quarter. This is on top of the $ 365,000 made through lobbying in the first two quarters of the year, according to the bipartisan Center for Responsive Politics.
The two companies have increased drug prices in the past. Jeff Ricchetti has started campaigning on behalf of GSK on behalf of Congress on "Medicare and Medicaid drug pricing and reimbursement," according to its third-quarter filing. According to Horizon's lobbying registration form, Ricchetti will focus on issues related to Medicaid discounts and drug prices.
GSK told CNBC that Ricchetti had not been hired for his family ties, but hinted that he could be asked to report to the new Biden administration.
"Actions related to drug pricing, Medicare and Medicaid on Capitol Hill and the White House can and can have a dramatic impact on the way we run our business and invest in innovation for the future," said Lyndsay Meyer , a company spokeswoman, told CNBC when Ricchetti wanted to lobby the White House. She later noted that Ricchetti Inc. was hired to work with Congressional Democrats.
"In addition, being able to communicate the reality of legislative and administrative action gives patients a voice affected by actions that affect the way we innovate today and how we innovate today, and treatments and remedies in the future pursue, "she added. Meyer noted that the company had engaged Ricchetti because of its "long history of working with centrist democrats on many health issues".
Horizon didn't rule out Ricchetti advocating in-depth administration.
"As is customary in the industry, we are working with experts who have knowledge and involvement in US health care policy and can help navigate the administration," Geoff Curtis, a company spokesman, told CNBC. "To that end, Horizon is working across party lines to advance research, advance patient access, and advance health policies that support innovative, breakthrough medicines."
Neurocrine Biosciences, a biopharmaceutical company, also got Ricchetti to campaign for it in the final stages of the election. The registration form states that Ricchetti will champion Neurocrine on "drug discovery and development, pricing and access, reimbursement".
Richard Painter, chief White House ethics attorney in the George W. Bush administration, told CNBC that Steve Ricchetti may have to pull out of drug pricing issues or tell his brother not to stand up for the White House.
"It's everyone's job to keep their brothers, sisters, and grown children out of the house, so to speak," Painter said of what Ricchetti should do when dealing with his brother's potential lobbying efforts. "I don't see anything that is a red light, but in some situations I see a yellow light," said Painter Ricchetti's possible ethical dilemma.
It's unclear whether Jeff Ricchetti plans to stand up for the White House or the agencies within the new administration, as his brother is up for a key role in Biden's White House. It is also unknown whether Steve Ricchetti will be involved in administrative political matters.
Neither the Biden transition nor the Ricchetti brothers returned a request for comment.
Jeff Ricchetti stood up for the White House and other federal agencies when Biden was vice president. When Steve Ricchetti Biden became chief of staff, Jeff Ricchetti did not stand up for the vice president's office. During Biden's second term as Vice President, Jeff Ricchetti had clients such as Eli Lilly, Sanofi and Boehringer-Ingelheim Pharmaceuticals.
During the campaign, Steve Ricchetti met privately with some of Wall Street's top donors to rally them around the former Vice President, CNBC first reported in January.
Progressives are upset that the former lobbyist is given an important advisory role in Biden's administration.
"Steve Ricchetti is a former pharma lobbyist and has represented groups loudly opposed to Medicare for All and the public manufacture of prescription drugs," Alexandra Rojas, executive director of Progressive Justice Democrats, said in a statement. "In this post-Covid era, Biden has the chance to fundamentally reform our gruesome health system, but it will be necessary to stand up to private power."
Horizon Therapeutics and GSK have increased prices for certain drugs.
Reuters reported in late 2019, citing research by 3 Axis Advisors, that GSK was among several pharmaceutical companies looking to raise their prices for the new year.
GSK said at the time that it was raising prices for more than 30 drugs. According to the report, the company increased prices for respiratory treatments offered through its Ellipta inhaler, cancer drug Zejula, and products in its HIV-focused ViiV joint venture. According to reports, the price increases ranged from 1% to 5%.
GSK defended its track record of drug pricing in comments to CNBC.
"GSK has a long history of pricing drugs to reflect the value they deliver to patients and we are actively involved in developing solutions that enable patients to access new scientific breakthroughs," said Meyer, who Company spokeswoman. "We continue to demonstrate our commitment to patients and responsible pricing through our actions and our track record over time."
A year before it changed its name to Horizon Therapeutics, Horizon Pharma was at the center of a 2018 CNN story about how one of the company's drugs cost nearly $ 3,000. The pain reliever known as Vimovo is still listed in Horizon's portfolio.