Pharmaceutical industry, under scrutiny for prices, has history of big political wins
Soaring drug prices already had customers unhappy. The pharmaceutical industry hardly needed a new poster boy to add volume and passion to the complaints.
But that’s just what it got last week when Martin Shkreli, the CEO of Turing Pharmaceuticals, made a name for himself after he hiked the price of a drug for AIDS and cancer patients by more than 4,000 percent. Now, some lawmakers are scrutinizing another company, Valeant Pharmaceuticals, for increasing the price of two heart drugs this year.
The Pharmaceutical Research and Manufacturers of America, acutely aware of its image problem – 72 percent of Americans say prescription drug costs are unreasonable, according to a recent Kaiser Family Foundation poll – promptly distanced itself from Turing (whose CEO has now said he will lower the price of Daraprim, the drug involved in the controversy). And the powerful industry trade group itself is in reboot mode with a new president and CEO, Stephen Ubl.
There’s work to be done, for sure, but the industry has never lacked for resources to amplify its voice in politics and policy making. Since 1999, pharmaceuticals/health products has poured more money annually into lobbying than any other industry, including $229 million last year alone. PhRMA led the group, plowing $16.6 million into helping advance drugmakers’ priorities in Washington.
Pharmaceutical company employees and PACs have also given big to politicians. During the last presidential cycle, federal candidates, political parties and outside spending groups received $51 million – the largest-ever total from the industry. In last year’s midterms, it provided $32.1 million.
What’s been the return on this substantial investment? For one thing, dodging a number of bullets bearing PhRMA’s name. One of the industry’s greatest victories has been preventing Medicare from being able to negotiate drug prices with pharmaceutical companies. That was ensured when Congress passed and President George W. Bush signed the Medicare Modernization Act of 2003, which expanded Medicare to cover outpatient prescription drugs. The law also prohibited drug re-importation from Canada and Europe, where prices are often lower.
Billy Tauzin, who was a Republican representative from Louisiana at the time, helped push the bill through the House. He soon after left Congress and was named president and CEO of PhRMA, which came with an annual salary of about $2 million.
When Barack Obama was campaigning for president, he promised to resist the drug lobby. But he signed the Affordable Care Act into law in 2010 without provisions allowing re-importation of drugs or giving Medicare the ability to negotiate prices.
In 2009, at the height of the debate in Congress over passing Obamacare, lobbying peaked for drugmakers at $273 million. PhRMA and one of its members, Pfizer Inc, each spent over $25 million to lobby that year.
Running for re-election in 2012, Obama was the biggest individual recipient of pharmaceutical dollars, pulling in $2 million from the industry, which made up one of his top donor bases. His general election opponent, Mitt Romney, received almost as much at $1.98 million. Obama was even more popular with the industry in 2008, receiving $2.5 million, while John McCain received just $800,000.
This year, Obama suggested that lawmakers allow Medicare to negotiate down drug prices like the Department of Veterans Affairs does. But Marcia Angell, a senior lecturer at Harvard Medical School and the former editor-in-chief of the New England Journal of Medicine, said the president missed his chance when he was newly elected and Congress was under Democratic control.
“That was the time to act, but he didn’t,” said Angell, a strong critic of the pharmaceutical industry.
The vast majority of people surveyed in the Kaiser poll, 83 percent, want Medicare to be able to negotiate drug prices. Seventy-six percent want a limit on how much companies can charge for drugs that treat serious illnesses.
Clinton’s plan, like Sanders’, would allow Medicare to bargain over drug prices. John Castellani, PhRMA’s current president and CEO, quickly fired back after Clinton released her plan last month, saying in a statement that her “sweeping and far-reaching proposals would restrict patients’ access to medicines, result in fewer new treatments for patients, cost countless jobs across the country and erode our nation’s standing as the world leader in biomedical innovation.”
Recently, pharmaceutical companies have set their sights on the 21st Century Cures Act, a bill to accelerate new drug approval by the Food and Drug Administration. Castellani has said that the legislation would help “ensure biomedical advances continue and are available to the patients who need them to live longer, healthier lives.”
Critics like Diana Zuckerman, the president of the National Center for Health Research, argue that speeding up the process means smaller studies that fail to show whether a drug correlates with not only short-term changes – like, for example, a tumor shrinking over a few months – but also living longer, spending less time in the hospital and experiencing a better quality of life.
But the industry has plenty of friends on Capitol Hill: During the last election cycle, pharmaceuticals employees and PACs gave hundreds of thousands of dollars each to GOP congressional leaders: (soon-to-be former) House Speaker John Boehner (R-Ohio) ($255,800), House Majority Leader Kevin McCarthy (R-Calif.) ($253,500), Senate Majority Leader Mitch McConnell (R-Ky.) ($363,373) and Senate Majority Whip John Cornyn (R-Texas) ($208,050). Rep. Fred Upton (R-Mich.), who introduced the 21st Century Cures Act, received $302,700.
The largest Democratic recipients included Sens. Ed Markey (D-Mass.) ($310,050) and Cory Booker (D-N.J.) ($308,150), who are both members of the Senate’s Committee on Commerce, Science and Transportation, one of the congressional committees that can impact the industry. Former Sen. Kay Hagan (D-N.C.), who lost reelection, accepted $284,449. The pharmaceutical industry is an important part of North Carolina’s economy.