WASHINGTON — It does not seem to matter how angrily President Trump tweets, how pointedly House Speaker Nancy Pelosi lobs a critique, or how shrewdly health secretary Alex Azar drafts a regulatory change.
The pharmaceutical industry is still winning in Washington.
In the past month alone, drug makers and the army of lobbyists they employ pressured a Republican senator not to push forward a bill that would have limited some of their intellectual property rights, according to lobbyists and industry representatives. They managed to water down another before it was added to a legislative package aimed at lowering health care costs. Lobbyists also convinced yet another GOP lawmaker — once bombastically opposed to the industry’s patent tactics — to publicly commit to softening his own legislation on the topic, as STAT reported last month.
Even off Capitol Hill, they found a way to block perhaps the Trump administration’s most substantial anti-industry accomplishment in the past two years: a rule that would have required drug companies to list their prices in television ads.
To pick their way through the policy minefield, drug makers have successfully deployed dozens of lobbyists and devoted record-breaking sums to their federal advocacy efforts. But there is also a seemingly new strategy in play: industry CEOs have targeted their campaign donations this year on a pair of vulnerable Republican lawmakers — and then called on them not to upend the industry’s business model.
In more than a dozen interviews by STAT with an array of industry employees, Capitol Hill staff, lobbyists, policy analysts, and advocates for lower drug prices, however, an unmistakable disconnect emerges. Even though Washington has stepped up its rhetorical attacks on the industry, and focused its policymaking efforts on reining in high drug prices, the pharmaceutical industry’s time-honored lobbying and advocacy strategies have kept both lawmakers and the Trump administration from landing any of their prescription-drug punches.
“Big Pharma has replaced Big Tobacco as the most powerful brute in the ranks of Washington power brokers,” Sen. Dick Durbin (D-Ill.) said in a statement to STAT. Durbin, who recently saw the industry successfully oppose his proposal to curtail some of the industry’s patent maneuvering, added that, “Pharma’s billions allow them to continue to rip off American families and taxpayers.”
The industry doesn’t get all the credit; it has also benefited from a fractured Congress and discord between President Trump’s most senior health care advisers.
PhRMA, the drug industry’s largest lobbying group here, declined to comment for this article. But industry leaders have broadly argued against efforts to rein in the industry’s practices in terms of price hikes and patents, making the case that that could irreparably stifle medical innovation.
The battle is far from over, and industry representatives and lobbyists are quick to hypothesize that the worst, for them, is yet to come. They point to several ongoing legislative initiatives, including in the Senate Finance Committee, that could take more concerted direct aim at their pricing strategies in Medicare. They’re waiting, too, to see if House Democrats can cut a drug pricing deal with the White House to empower Medicare to negotiate at least some drug prices. Another pending regulation, loathed by drug makers, might tie their pricing decisions in Medicare to an index of international prices.
They’ve also bemoaned the Trump administration’s decision last week to abandon a policy change that would have ended drug rebates — which, the pharmaceutical industry has said, could have given drug makers more space to lower their prices voluntarily.
“We’re getting killed!” one pharma lobbyist told STAT.
Of course, the Trump administration’s supposedly devastating decision to abandon that proposal simply maintains the status quo.
“Big Pharma has replaced Big Tobacco as the most powerful brute in the ranks of Washington power brokers.”
Sen. Dick Durbin (D-Ill.), in a statement
On Valentine’s Day, Sen. Thom Tillis (R-N.C.) enjoyed a showering of love that is familiar in Washington: a flood of campaign contributions, many at the federal limit of $2,800 for a candidate or $5,000 for an affiliated political committee.
One donation came from Pfizer’s CEO, Albert Bourla, who donated $5,000 to Tillis and another $10,000 to Sen. John Cornyn (R-Texas) and associated campaign committees. Another came from Kenneth Frazier, the top executive at Merck. The Tillis campaign committee eventually cashed checks from CEOs and other high-ranking executives at those companies as well as Amgen, Eli Lilly, Sanofi, and Bristol Myers-Squibb, plus two high-ranking officials at the advocacy group PhRMA. Six lobbyists at one firm that works with PhRMA, BGR, also combined to contribute $100,000 to a bevy of Republican lawmakers and the party’s campaign arms.
Tillis raised an additional $64,500 from drug industry political action committees in the past quarter, according to disclosures released on Monday.
A Pfizer spokeswoman declined to comment about Bourla’s contributions, and representatives for the other companies did not respond to STAT’s request for comment.
Tills was one of few individual lawmakers — in many cases, the only one — to whom the executives had written personal checks during the current election cycle. While drug industry CEOs frequently contribute to political committees for congressional leadership, the breadth of executives who donated Tillis specifically is notable, particularly considering his outspoken role on pharmaceutical industry issues.
While lobbyists pushed back on the notion that campaign contributions directly influence votes, the donations targeted so specifically to a particular candidate could be seen as a prime example of Washington’s system for rewarding loyalty and how industries protect their interests.
The same PhRMA PAC that donated to Tillis has given generously in recent years: nearly $200,000 in the 2018 campaign cycle, roughly 58% of which was targeted toward Republicans. Drug industry PACs donated $10.3 million in total in that cycle, according to the Center for Responsive Politics. The figure two years before was even higher: a total of $12.2 million from industry-aligned PACs alone.
It is no accident that the pharmaceutical industry has maintained its reputation among the nation’s most powerful lobbies, said Sheila Krumholz, the executive director of the Center for Responsive Politics, an organization that tracks political influence.
“Their access and influence goes beyond this Congress or even the administration,” Krumholz said in an interview, adding that she “was struggling to think of evidence” it had waned.
Pharma has a reputation here for winning on policy — often thanks to the lawmakers who are among the biggest recipients of the millions that drug corporations, employees, and the industry political arms donate each year.
Even as the rhetoric has escalated, the industry has quietly worked to insulate itself from any major legislative changes.
Take, for example, a recent about-face from Cornyn, the Texas Republican who took in some campaign cash alongside Tillis. As recently as February, Cornyn seemed to be positioning himself as a rare Republican figurehead for anti-pharma congressional wrath. At a widely publicized hearing before the Senate Finance Committee, he went head-to-head with AbbVie CEO Richard Gonzalez, pressing him to explain why the company had filed more than 100 patents on its blockbuster arthritis drug Humira.
Cornyn introduced legislation soon after the skirmish to crack down on patent “thicketing,” a term for a drug company tactic to accumulate tens, if not hundreds, of patents to shield a drug from potential generic competition.
Pharma sprung into action. They recruited congressional allies, including Tillis, to pressure Cornyn to significantly rework the bill, and they succeeded. The version of the bill that eventually cleared the Senate Judiciary Committee was stripped of language that would have empowered the Federal Trade Commission to go after patent thicketing. Instead, the bill limited how many patents a drug maker could assert in a patent lawsuit.
The new version of the bill lost “a lot of teeth” and “solves a narrower problem in a narrow way,” advocates told STAT when the change was first introduced.
It is far from the only example of the industry’s aggressive interventions to water down legislation.
“In lots of ways they’re like the [National Rifle Association], because they have an incredible power to squash out any negative opinion, nor to feel any of the ill effects of those things,” said Pallavi Damani Kumar, an American University crisis communications professor who once worked in media relations for drug manufacturers. “It just speaks to how incredibly savvy they are.”
Pharmaceutical industry lobbyists also successfully fought to keep another anti-drug industry patent proposal from Sen. Bill Cassidy (R-La.) and Dick Durbin (D-Ill.) out of a bipartisan drug pricing package moving through the Senate HELP Committee. The legislation would have allowed the FDA to approve cheaper versions of drugs, even when the more expensive product was protected by certain patents.
Cassidy’s proposal never even made it into the HELP package. As the lobbyist who bemoaned the withdrawal of the rebate rule put it, Cassidy “simmered down” in the face of industry pressure.
In recent weeks, the industry had targeted Cassidy in particular, in recent weeks, for fear he would break with many of his GOP colleagues to support a cap on some price hikes for drugs purchased under Medicare, a proposal so far pushed only by Democrats.
“Sen. Cassidy doesn’t care what lobbyists think — he is going to do what’s best for patients,” said Ty Bofferding, a Cassidy spokesman. “Sen. Cassidy fought for the committee to include the REMEDY Act in the package, despite strong opposition from the pharmaceutical industry.”
The committee eventually included half the bill’s provisions, he added, as well as four other pieces of legislation meant to prevent the industry from taking advantage of the patent system.
The drug industry also notched a win by watering down another proposal in that package from Sen. Susan Collins (R-Maine) that would have blocked drug makers from suing over patents they didn’t disclose to the FDA. The version of the bill that actually made it into the package doesn’t block drug makers from suing, but instead directs the FDA to create a public list of companies that fail to disclose their patents.
“This change is a big win for drug makers,” Michael Carrier, a Rutgers University professor and expert on patent gaming, told STAT. “Shaming is something drug makers don’t seem worried about.”
Matthew Lane, the executive director of the Coalition Against Patent Abuse, likewise added that the altered bill “doesn’t seem to be doing much anymore.”
Not all of the pharma-endorsed changes, however, are self-serving. Patent experts and federal regulators too had raised concerns with some of the bill being proposed. Cornyn’s patent bill was particularly controversial.
“These provisions encourage ‘fishing expeditions’ by zealous bureaucrats, politically motivated by the popularity of efforts to reduce drug prices and garner the political benefits of being seen to be pursuing these ends,” Kevin Noonan, a patent lawyer at McDonnell Boehnen Hulbert & Berghoff wrote in a recent blog post, referring to the original Cornyn bill.
Drug-pricing advocates said lobbyists have even managed to convince lawmakers to introduce some legislation they say has explicitly favored the drug industry, including intellectual property-focused legislation that would allow drug makers to patent human genes.
That particular bill would “undo the bipartisan effort underway to fix pharma’s exploitation of the patent system,” said the Coalition Against Patent Abuse. And they were far from the only group raising concerns. The American Civil Liberties Union and more than 150 other groups wrote to lawmakers last month opposing the bill.
Pharma’s list of policy victories goes on: Drug companies and allied patient groups forced the Trump administration to back off a proposal to make relatively minor changes to Medicare’s so-called protected classes policy. Currently, Medicare is required to cover all drugs for certain conditions, including depression and HIV. The Trump administration proposed in November that private Medicare plans should be able to remove certain drugs in those classes from their formularies, if the drugs were just new formulations of a cheaper, older version of the same drug, or when a drug spiked in price. But drug industry opposition helped convince the administration to spike that effort.
A week ago, the industry struck its biggest blow yet. Three of the country’s largest pharmaceutical companies —Amgen, Eli Lilly, and Merck — prevailed in a lawsuit to strike down a Trump administration requirement that they disclose list prices in television advertisements.
The lack of congressional action — despite the Democratic enthusiasm and bipartisan appetite — is still further evidence of industry’s ability to stave off defeat.
As the dozens of Democrats running for president ramp up their anti-pharma rhetoric, both Trump and progressives have begun to fret that Washington’s efforts have proven to be all bark and no bite. With two weeks remaining before the August recess and an escalating 2020 campaign, some advocates fear that the window for bold action is closing quickly.
“It’s appalling that we are six months into this Congress and we haven’t seen meaningful legislation passed on American’s number one issue for this congress,” said Peter Maybarduk, who leads drug-pricing initiatives for the advocacy group Public Citizen. “Congress needs to get its act together.”
Even some drug industry lobbyists have begun to tell their clients that the end of September is likely the deadline for this Congress to act on drug pricing.
Drug industry lobbyists still insist they are not winning.
The incessant focus on drug prices, the volume of policy proposals on the issue, the increasing attention from voters — they argue that it shows the pharmaceutical industry is no longer an untouchable force in Washington.
Several lobbyists pointed out that the industry had recently reversed its stance on the CREATES Act, a bill that would open up drug makers to lawsuits when they’re accused of blocking lower cost competitors from coming to market, for years. Until last year, pharma was staunchly opposed — but in an effort to push a coveted industry priority through Congress, pharma dropped its opposition to the bill. Now, the legislation has already cleared major House and Senate committees and seems all but destined to become law.
“There are a lot of other things that are advancing that pharma would never in a million years would have supported in any other time,” another drug industry lobbyist said. That lobbyist insisted that drug makers’ wins were not self-serving, but were the industry’s attempts at keeping “awful ideas” at bay.
The specter of new sweeping changes also continue to haunt the drug industry. President Trump’s unpredictability further exacerbates that fear. When the president remarked last week that he would be penning an executive order creating a “favored nations” drug pricing policy it sent drug stocks tumbling — and drug lobbyists scrambling.
And with the 2020 presidential campaign heating up, pressure on pharma is all but guaranteed to increase. In the first two Democratic presidential debates, a slew of candidates relished the opportunity to vilify “Big Pharma.” Former Vice President Joe Biden, a frontrunner for the Democratic nominee, released a sweeping drug pricing plan Monday, which includes capping the amount drug makers can charge for certain drugs.
This confluence of factors have left the drug industry’s small army of lobbyists shellshocked.
As the second lobbyist put it: “I do not feel like I am winning.”
Pharma’s savvy lobbying and campaign contributions don’t account for everything — by pure luck, industry has benefited from a fractured Congress and often-chaotic White House.
The Democratic majority in the House of Representatives, for example, has struggled to come up with a coherent plan of attack. The most liberal wing of the Democratic party has openly feuded with House Speaker Nancy Pelosi over the central thrust of the House Democrats’ drug pricing plan, forcing committees of jurisdiction to instead focus on tweaks around the edges.
The administration, too, has been beset by infighting, particularly between health secretary Alex Azar and Joe Grogan, a former Gilead lobbyist who is Trump’s top policy adviser. And it has struggled to convince even Republicans to support some of Trump’s more creative proposals, like a plan to cap U.S. drug payments based on foreign prices.
The Senate deserves some credit, too. Drug industry CEOs talked circles around the Senate Finance Committee during a high-profile hearing this February. That committee has also struggled for months to craft a package of drug pricing reforms that could garner bipartisan support.
The infighting has forced the committee to repeatedly delay a planned markup on that legislation. And Democrats on that committee are growing increasingly impatient — so much so that they’ve begun to pressure the committee to take bold action or risk Democratic support for the overall package.
“It is time for this committee to take action,” all of the committee’s Democrats, sans two, wrote to committee chairs Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.) in a July 11 letter obtained by STAT. “We hope to support a final package that ensures meaningful changes to the status quo.”
Do not forget to mention how this enables Drug corporations access to confiscate the personal property of the people that they say owes them money, for Nursing Home and Medication… Yes when you die they put a lien on your home and prevent your Airs from becoming your Beneficiaries.. They are into your Real Estate and Bank accounts…
As we think of what the medical cartel might lose with effective healthcare reforms (over $1.5 trillion per year), no wonder they spend so much on campaigns and lobbying. Trump tax cuts showed them that ROI from investments in political influence are higher than almost any other investment. So expect 2020 to be the most expensive election by far. (https://mHealthTalk.com/trillion/)
Anything “positive” coming out of “elected” officeholder’s mouths is gaslighting. In fact, gaslighting is lying about your lying.
Nice article, however comparing the pharmaceutical lobby to the NRA lobby, in a negative association, is dead wrong. The opiod pill pushing alone, has caused over 200,000 deaths in the USA. Now, disturbed people gojng on killing sprees in the same time period, is rather miniscule. Someday, the freedom to own guns in the USA might be a necessity, to overthrow a tyrannical govt.
I agree with you Rex regarding our 2nd amendment. However, the power of the lobbyists need to be restructured. They are bribing legislators, FDA, AMA, etc We will never see an end to the opiate epidemic until the swamp is drained. STOPPNow the Opiate Epidemic.
Pharma’s lobbying efforts have ALWAYS been successful, and they are orders of magnitude larger now than they were a half century ago. Back then, in the early 60s, Senator Estes Kefauver, outraged by high drug prices, initiated legislation that was primarily intended to control drug costs. Not everyone, however, appreciated his reforming efforts. He was branded a “socialist hell-bent on ruining healthcare” for his work. His opponents accused him of “trying to unnecessarily expand the power of government, threatening the viability of the pharmaceutical industry, and inserting Washington bureaucrats between patients and their doctors”. His labors were strongly opposed by the powerful pharmaceutical industry, of which he said, “These drug fellows pay for a lobby that make the steel boys look like popcorn vendors.” His efforts to reduce drug prices ended in failure. Interestingly, however, the legislation that did pass, the Kefauver-Harris Drug Control Act of 1962, required pharma companies to actually prove that their medicines were effective. Pharma hated that requirement at the time, but they now understand that this legislative requirement was the key driver of their success over the next 50 years.
Has Big Pharma always led the pack in bribery to the Senate?
The winners in the high price drug game are the PBM’s. They are the wolf that’s watching the hen house. They decide which drugs are on formulary and which aren’t. This is a directly proportionate to the amount of the drug rebate.
PBM’s decide how much they pay their pharmacies, or their mail order houses and how little every other pharmacy gets paid. PBM’s get to keep that spread pricing and DIR fees. PBM’s are the ones that write the “Take it or Leave it ” contracts. PBM’s are the ones that insist their clients have mandatory mail order . Guess who owns the mail order house ? Yes, the PBM’s. You mean to tell me no one in Washington sees this ? Trump saw it when he gave his speech in the rose garden. Now he gave up on the PBM’s. There’s something not kosher in this hen house !!!!!!
Jeff you are correct. PBMs, Pharma and our legislators sleep together every night but get out of the same house at different times to make sure everything look KOSHER. ;:)
Cut out ALL the BS : the lobbying, campaign donations, drug rebates, deals to doctors, freebees for prescribers, PBMs etc etc. Stop all this bribery. It would hugely reduce BigPharma’s spending, that then for the same gross revenues could drastically reduce drug prices. Isn’t that the desired result? The result that already exists in every other country but the bribery-bitten USA ??? In those other countries there is a word and disdain for what is allowed in the USA : corruption.
It is easy for Pharma to win. They got every legislator and regulator in their back pocket. In our legalized corrupt system (aka Lobbying) they receive about $150,000 per year per legislator to keep their job every two and six year. FDA under GDFUA (legalized fee to keep folks at FDA employed) will overlook mistakes.
Brand pharma has not introduced and/or will introduce any drug that is marginally better than existing drugs for the same disease that costs less than $1000.00 per month. In addition ORPHAN drugs was a brilliant move and they are in six figures.
All this is supported by our legislators. So if we think Pharma will loose, DREAM ON USA. We haven’t seen anything yet.
If Pharma has to sell their next of kin to win, they will do it. They know that people will die sooner or later so why not capitalize and take advantage of people’s desire to extend life. Cheers!
I agree another name for lobbying is bribing. And it has worked so well for the drug companies. Not mentioned in this article is the Opiate Epidemic. PhRMA has not only influenced our legislators but also our government agencies and the AMA. The CDC guidelines should be implemented into law instead PhRMA is trying to abolish the guidelines. The approval division of the FDA leads employees to a high paying position with the very drug company that benefitted. The swamp needs to be drained – hard to do since too many in power are benefiting.
LOBBYING: def. practice that in most countries is defined as the illegal practice of bribing
Want to weaken/stop the lobbying? Just implement term limits for congress and senate.
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