Drugmakers shell out record amount lobbying Congress
Drugmakers spent a record amount of money lobbying Congress in the first half of the year, trying to defend against the threat of drug pricing reforms that could hit their bottom line such as a new bill revealed by the Senate finance committee on Tuesday.
The industry group Pharmaceutical Research and Manufacturers of America spent $16.1m on lobbying in the first half of this year, up 4 per cent from its previous record of $15.5m in the first half of 2018, according to congressional filings. PhRMA, which did not respond to a request for comment, also broke its record for a full year in 2018, dishing out $27.5m in total.
The lobbying group for pharmacy benefit managers — which recently saw off a reform of the rebates they receive from drugmakers — spent 40 per cent more in the first half of this year than in the first six months of 2018. The Pharmaceutical Care Management Association, which also did not respond for comment, spent $2.1m.
Large pharmaceuticals companies also spent big on lobbying in the first half of this year. Pfizer expended $7.1m, up from $6.6m in the first half of last year, Merck spent $5m, up from $4.1m, and Johnson & Johnson laid out $3.6m, up from $2.3m.
Eli Lilly, the Indianapolis-based drugmaker that has come under scrutiny for the price of its insulin product, spent $3.7m on lobbying, 32 per cent more than for the same period the year before. Gilead Sciences, the San Francisco Bay Area-based biotech company that has been quizzed in Congress about the pricing of its HIV drug, spent 80 per cent more than for the first half of 2018, at $2.9m. None of the companies responded to requests for comment.
“When an industry faces the prospect of increased government scrutiny, we often see an increase in lobby spending as they try to prevent any harm to their bottom line,” said Daniel Auble, a senior researcher at the Center for Responsive Politics, a non-profit research group that tracks lobbying money in Washington.
“So it is not at all surprising that, with the administration talking about how to control [drug] prices and Congress taking up legislation to that effect, among other things, that the pharmaceutical industry would respond by calling all of their lobbyists to a full-court press.”
The filings were published as the Senate finance committee unveiled its drug pricing reform bill that would cost the drugmakers money.
The bipartisan bill, sponsored by Republican Chuck Grassley of Iowa and Democrat Ron Wyden of Oregon, includes two key proposals. First, a measure to penalise companies that raise drug prices for Medicare, the government-backed insurance plan for seniors, more than inflation, requiring companies to pay higher rebates.
Second, the bill includes a measure to cap what Medicare patients pay from their own pockets at a maximum of $3,100 a year, with the drug manufacturers required to offer discounts to patients who had already hit the limit.
But shares in the pharma companies did not budge after the announcement, as the bill may never become law.
Looking ahead to a hearing before the Senate finance committee, one committee official said: “We will debate this on Thursday, at which point Republican senators will probably try and strip out the inflation cap, as many of them believe it is tantamount to government intervention. But we expect this to pass the committee one way or another.”
Officials said, however, that they do not expect the bill to reach the Senate floor before the August recess, and it remains unclear whether Mitch McConnell, the Republican Senate leader, will put it to a vote at all. Mr McConnell’s office did not respond to a request to comment.
Stephen Ubl, PhRMA president and chief executive, said the Senate bill “fails to meet the fundamental test of providing meaningful relief at the pharmacy counter for the vast majority of seniors”. The group is committed to working with the committee to find a “better solution”, he added.
The House of Representatives is going to hold off and not release its bill until October, according to an aide to Nancy Pelosi, the Democratic Speaker. Wendell Primus, Ms Pelosi’s healthcare adviser, told an event at the Brookings Institution in Washington on Monday that they did not want to give the drugs industry an opportunity to attack the bill while Congress was in summer recess.
Lobbyists for other parts of the healthcare industry have also increased their spending, as some members of Congress and Democratic presidential candidates propose reforming the entire healthcare system, with some even putting forward plans for “Medicare-for-all”.
America’s Health Insurance Plans, which advocates on behalf of health insurers, spent $5.1m on lobbying, up 37 per cent from the same period the year before. The American Hospital Association, a group of healthcare providers, increased its outlay by almost 10 per cent to $10.2m, while the American Medical Association, the largest association of doctors in the US, spent $11.5m, 6 per cent more in the first half of 2019 than in the same period the year before. None of these associations responded to requests for comment.