- One of President-elect Joe Biden's closest advisors could face pressure to recuse himself from working on some of the incoming administration's key initiatives.
- Steve Ricchetti, who was named counselor to the president in Biden's eventual administration, has a brother who was hired this year to lobby for pharmaceutical firms.
- If Biden moves ahead with polices aiming to reduce prescription prices, ethics experts say Ricchetti may have to recuse himself from those matters.
One of President-elect Joe Biden's closest advisors could face pressure to recuse himself from working on some of the incoming administration's key initiatives as his brother lobbies for at least two pharmaceutical companies.
Steve Ricchetti, who on Tuesday was named counselor to the president in Biden's eventual administration, has a brother, Jeff, who was hired to lobby for pharmaceutical firms while Biden was running for president, according to disclosure reports. Ricchetti was Biden's campaign chairman and previously his chief of staff.
Biden's campaign ran, in part, on the idea of reducing drug prices. Some of these companies have been known to have high drug costs. If Biden moves ahead with polices aiming to lower prescription prices, ethics experts say Ricchetti may have to recuse himself because his brother could reap a financial benefit from the same industry the administration as a whole is trying to regulate.
"The option for Steve Ricchetti is to recuse from involvement in White House policy matters that directly and substantially impact the finances of his brother," Paul Ryan, vice president of policy and litigation at ethics watchdog Common Cause, told CNBC on Tuesday. "I think it's fair to expect public officials to recuse themselves from government decision-making that could financially benefit their immediate family members."
Steve and Jeff Ricchetti co-founded their self-named lobbying shop over a decade ago. While Steve Ricchetti hasn't lobbied since before Biden became vice president, Jeff Ricchetti is still a registered lobbyist.
Jeff Ricchetti started lobbying for British pharmaceutical company GlaxoSmithKline in September. A month earlier, he started work for Horizon Therapeutics, which has its corporate headquarters in Ireland and was once known as Horizon Pharma.
The firm made at least $270,000 in the third quarter, records show. That's on top of the $365,000 that it made from lobbying during the first two quarters of the year, according to data from the nonpartisan Center for Responsive Politics.
The two companies have a history of raising drug prices. Jeff Ricchetti has started to lobby Congress on behalf of GSK regarding "drug pricing and Medicare and Medicaid reimbursement," his third-quarter filing says. Horizon's lobbying registration form says Ricchetti will focus on issues related to Medicaid rebates and drug pricing.
GSK told CNBC that it did not hire Ricchetti for his family ties, but hinted it could ask him to lobby the incoming Biden administration.
"Actions pertaining to drug pricing, Medicare and Medicaid on Capitol Hill and in the White House can, and do, dramatically impact how we conduct our business and invest in innovation for the future," Lyndsay Meyer, a spokeswoman for the company, told CNBC when asked whether it plans to have Ricchetti lobby the White House. She later noted it hired Ricchetti Inc. to work with congressional Democrats.
"Additionally, the opportunity to communicate the realities of actions coming from lawmakers and the Administration, gives voice to the patients affected by actions that impact the ways we deliver innovation today and pursue treatments and cures in the future," she added. Meyer noted the company hired Ricchetti because of the firm's "long history of working with centrist Democrats on many health policy issues."
Horizon did not rule out having Ricchetti lobby the incoming administration.
"As is common in the industry, we work with experts who have knowledge of and involvement in U.S. healthcare policy and can assist in navigating the Administration," Geoff Curtis, a spokesman for the company, told CNBC. "To that end, Horizon is committed to working across party lines to advance research, promote patient access as well as encourage healthcare policies that support innovative breakthrough medicines."
Neurocrine Biosciences, a biopharmaceutical company, also brought on Ricchetti to lobby for it in the latter stages of the election. The registration form says Ricchetti will lobby for Neurocrine on issues pertaining to "drug discovery and development, pricing and access, reimbursement."
Richard Painter, chief White House ethics lawyer in the George W. Bush administration, told CNBC that Steve Ricchetti might have to recuse himself from drug pricing matters or make it clear to his brother not to lobby the White House.
"It's everybody's job to keep the brothers, the sisters and grown children out of the house, so to speak," Painter said in describing what Ricchetti should do when handling his brother's potential lobbying efforts. "I don't see anything that's a red light, but I do see a yellow light in some situations," Painter said in describing Ricchetti's possible ethics dilemma.
It is unclear whether Jeff Ricchetti plans to lobby the White House or the agencies within the incoming administration now that his brother is lined up for a key role in Biden's White House. It is also unknown whether Steve Ricchetti is going to be involved in any policy matters in the administration.
Neither the Biden transition nor the Ricchetti brothers returned a request for comment.
Jeff Ricchetti lobbied the White House and other federal agencies when Biden was vice president, records show. When Steve Ricchetti became Biden's chief of staff, Jeff Ricchetti did not lobby 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 privately met with some of Wall Street's top donors in an attempt to rally them around the former vice president, as CNBC first reported in January.
Progressives are upset that the former lobbyist is getting a key advisory role within Biden's administration.
"Steve Ricchetti is a former pharma lobbyist and has represented groups vociferously opposed to Medicare for All and the public manufacturing of prescription drugs," Alexandra Rojas, executive director of the progressive Justice Democrats, said in a statement. "In this post-Covid era, Biden has a chance to make major reforms to our cruel health care system but it will require standing up to private power."
Horizon Therapeutics and GSK have raised prices on certain drugs.
Reuters, citing research done by 3 Axis Advisors, reported in late 2019 that GSK was among several drug companies set to increase their prices going into the new year.
GSK said at the time that it was raising prices on more than 30 drugs. The company, according to the report, increased prices on the respiratory treatments it delivers through its Ellipta inhaler, its cancer drug Zejula and on products in its HIV-focused ViiV joint venture. Price hikes reportedly ranged between 1% and 5%.
GSK defended its track record on drug pricing in comments to CNBC.
"GSK has a strong track record of pricing medicines to reflect the value they deliver to patients and we are actively involved in creating solutions that allow patients to have access to new scientific breakthroughs," said Meyer, the company spokeswoman. "We continue to demonstrate our commitment to patients and responsible pricing though our actions and track record over time."
A year before it changed its name to Horizon Therapeutics, Horizon Pharma was the focus of a 2018 CNN story on how one of the company's drugs cost nearly $3,000. The painkiller known as Vimovo, is still listed under Horizon's portfolio.