TRENTON, N.J. — Former New Jersey Gov. Chris Christie signed a lucrative consulting contract with a pharmaceutical company less than a year after President Donald Trump’s bipartisan commission on opioids and addiction, which Christie chaired, recommended policy changes the drugmaker sought.
Pacira BioSciences paid Christie $800,000, plus stock options, in 2018 and 2019 as it lobbied for new Medicare rates to boost the financial prospects of its flagship product, a non-opioid painkiller used in surgeries, according to a POLITICO review of the New Jersey company’s regulatory filings.
The Christie-led commission’s final report, published in November 2017, encouraged the federal Centers for Medicare and Medicaid Services to review and modify Medicare reimbursement rates for non-opioid painkillers used to treat patients post-surgery.
“In some cases, non-addictive pain medications are bundled in federal reimbursement policies so that hospitals and doctors are essentially not covered to prescribe non-opioid pain management alternatives,” Christie wrote in a Nov. 1, 2017, letter that accompanied the report, echoing testimony Pacira BioSciences CEO David Stack had provided to the commission five weeks earlier.
“These types of policies, which the federal government can fix, are a significant deterrent to turning the tide on the health crisis we are facing. We urge you to order HHS to fix it,” Christie wrote.
The clout of the commission’s recommendation played an important role in influencing the agency’s decision to set a remunerative reimbursement rate for Exparel, Pacira’s non-opioid painkiller, in late 2018 “in response to the recommendation from the President’s Commission on Combating Drug Addiction and the Opioid Crisis,” according to the agency.
By mid-2018, shortly after Christie left office, Pacira arranged a $481,000 contract with the former governor in exchange for “high-level guidance about organizational strategy,” according to a company spokesperson. Christie LLC — described in Pacira’s SEC filings as “an entity affiliated with Mr. Christie” — received another $380,000 the next year, along with stock options for 35,000 Pacira shares that, if exercised, are now worth around $1.3 million.
Details of the contract have not been previously reported.
“Gov. Christie was not a consultant to Pacira at any point during his tenure as Chair of President Trump’s Commission on Combating Drug Addiction and the Opioid Crisis,” Amber Sears, Pacira’s vice president of communications, said in a statement to POLITICO. “Our consulting relationship began in mid-2018. During the course of this relationship, Gov. Christie … was not involved in executing our governmental relations engagements.”
The contracts were terminated last week after the Nasdaq-traded company, which is based in Parsippany, N.J., named Christie to its board of directors. In a press release, Pacira cited Christie’s work on the commission — whose report it has since utilized in its lobbying efforts — as an example of the expertise the one-time presidential candidate will bring to its board.
Telephone and email efforts to contact Christie over the past week through his office and former associates were unsuccessful.
After the 2016 presidential campaign, and with his rocky second term as governor drawing to a close, Christie turned his attention to the public health crisis posed by rising rates of opioid addiction in his home state. As overdose deaths in New Jersey climbed into the thousands, Christie’s administration responded with a $42.6 million advertising and public outreach campaign along with $200 million in anti-opioid and addiction treatment measures.
Pacira, a local company whose flagship product functioned as an alternative to opioids for post-surgical patients, made for a natural ally in those efforts.
The company’s growth had been slowed by Medicare reimbursement policies, according to a POLITICO review of Pacira’s earnings call transcripts.
Providers who prescribed Exparel to patients on Medicare weren’t receiving any additional payments from Medicare because of the way the drug is administered.
Clinicians inject Exparel into surgical sites to numb the area for several days after surgery, forestalling the patient’s need for opioid painkillers. Because the treatment is used in surgery, CMS viewed Exparel as an element of the procedure and wouldn’t offer providers a separate payment for it use.
“Drugs like Exparel are not reimbursed separately, but payment is considered to be bundled into this fixed payment simply because the drugs are administered during the surgery, despite the fact that this administration is intended to manage post-surgical pain,” Stack told Christie and other members of Trump’s opioid commission, after being invited to testify at a September 2017 meeting. “This payment policy created a perverse incentive for hospitals and ambulatory surgery centers by essentially rewarding those that prescribed opioids instead of administering a non-opioid pain medication.”
Stack’s testimony didn’t land on deaf ears. The commission‘s report that Christie submitted to Trump on Nov. 1, 2017, recommended a review and modification of “rate-setting policies that discourage the use of non-opioid treatments for pain, such as certain bundled payments.”
The report was good news for Pacira. A week after it was finalized, Stack told financial analysts that the company’s effort to receive new rates were “benefiting from … the almost unbelievably strong commitment of Governor Christie and [former] Congressman [and opioid commission member Patrick] Kennedy in this area.”
Over the next year — including after Christie had signed on as a consultant — Pacira repeatedly referenced the commission’s recommendations in its push for a dedicated Medicare reimbursement rate for Exparel.
In a Sept. 24, 2018, letter to CMS Administrator Seema Verma, Stack argued that the agency should heed the commission’s advice in modifying rate-setting policies that discourage the use of non-opioid treatments for pain.
Those recommendations resonated with CMS.
In November 2018, citing the Christie-led commission’s report, Medicare announced it would reimburse providers for the average sales price plus 6 percent for non-opioid pain medicines used in procedures at ambulatory surgery centers, starting in 2019. Opioid pain relievers remained in the bundled payment for surgeries, lowering the comparative incentive to prescribe them, POLITICO reported at the time.
Exparel was the only drug that qualified for the more lucrative reimbursement rate when CMS finalized its rates.
The new rates didn’t represent a complete victory for Pacira. CMS declined to set up a separate reimbursement schedule for Experal treatments administered in hospitals.
Even so, “this reimbursement code provides us with a crucial element to expanding the use of Exparel in the ambulatory setting,” which made up 10 percent of the drugmaker’s business the previous year, Stack told analysts in a February earnings call — three months after CMS finalized its rates. “Consequently, we see significant growth opportunity here and our team is working with commercial payers to follow Medicare’s lead and reimburse for this effective non-opioid option.”
Christie had no role in Pacira’s engagement with CMS, Sears said in a statement.
“Gov. Christie provided Pacira with valuable insight and guidance as we executed on our corporate mission to provide an opioid alternative to as many patients as appropriate by increasing patient access to non-opioid pain management solutions,” she wrote. “Governor Christie’s appointment to the Pacira board was based on his long-time, unwavering commitment to the opioid crisis and his track record as a seasoned government leader who gets things done. This is the exactly the type of individual we want on our board, and we are honored to have him join.”
Article originally published on POLITICO Magazine