After the Obama administration unveiled a proposal to overhaul Medicare Part B four months ago, a large number of lawmakers quickly and very vocally opposed the effort. Now, a new analysis finds that drug makers, who are worried the plan will cut into their revenue, have given them considerably more financial support than lawmakers who have not raised objections.
Specifically, 310 lawmakers who either signed two letters opposing the overhaul or were critical of it received a total of more than $7.2 million from pharmaceutical and health products companies for their 2016 campaigns, according to the analysis by Public Citizen, the consumer advocacy group, which released its analysis on Monday. And the amount given to each representative averaged more than $23,300 (read the letters here and here).
By comparison, there were 124 rank-and-file lawmakers — 117 Democrats and seven Republicans — who did not sign either letter and received a combined total of nearly $1.6 million from the same industry for their 2016 campaigns. They averaged more than $12,700. The consumer group analyzed data from the Center for Responsive Politics and the Federal Election Commission.
On average, those who signed the letters received 82 percent more in 2016 contributions than the rank-and-file who did not sign. And the correlation between support for the industry position and contributions raise “serious questions about whose interests our elected representatives are serving,” said Rick Claypool, a research director at Public Citizen, in a statement. “There’s an appearance that isn’t good,” he later told us.
The goal of the overhaul is to encourage greater use of lower cost, but equally effective, medicines covered by the Part B program, which pays for injectable and infused drugs for the elderly. The move, which would lower drug spending by reducing reimbursement fees for doctors, reflects growing concern over the rising cost of medications, a hot-button topic that is straining public and private payer budgets.
Under the Part B program, doctors, and hospitals buy a medicine, and the government reimburses the average sales price plus 6 percent. But the experiment, which would run five years starting this fall, would pay physicians the average sales price, as well as another 2.5 percent and a flat fee of $16.80. Presumably, this would provide greater payments for lower-cost generic drugs.
But ever since the Centers for Medicare and Medicaid Services unveiled its proposal in March, there has been a rising backlash from physicians, some patient groups and drug companies, which argue that the initiative will ultimately harm patients and raise costs. And many lawmakers have expressed the same view themselves in those letters sent to CMS.
Stopping the Part B proposal is important to the pharmaceutical industry for a couple of reasons, actually. Beyond the near-term goal of derailing the effort, drug makers want to show they have the political muscle to discourage any other attempts to alter Medicare drug pricing. In other words, the industry wants to show there would be fierce, bipartisan resistance to altering Medicare Part D, as well.
But consumer groups say an overhaul is needed. “The current payment methodology for drugs covered under Medicare Part B, which includes costly physician-administered drugs, does not work for patients. It encourages drug companies to charge sky-high prices and creates financial incentives to overprescribe higher-priced drugs, increasing patient costs,” wrote Maura Calsyn, director of health policy at the Center for American Progress, in a recent blog post.
The largest contributions among signers of the Republican letter went to John Shimkus, a Republican congressman from Illinois, who received nearly $221,500, according to the analysis. The next biggest recipient was Kevin Brady, a Republican congressman from Texas, who received nearly $203,000. Neither lawmaker could be reached for comment, but we will continue to try and pass along any reply (you can read the full list of lawmakers who received money here).
We should note Public Citizen points out the largest recipients were actually two lawmakers who did not sign any letter – Republican Majority Leader Kevin McCarthy in the House at $293,000 and House Speaker Paul Ryan, who received $290,000. The group notes that, because they are congressional leaders and do not normally sign lobbying letters, they were not included in the analysis. Meanwhile, Anna Eshoo, a California congresswoman, received $128,000, making her the largest recipient of industry contributions who signed the Democratic letter.