[Ip-health] Drug Industry Spent Millions To Squelch Talk About High Drug Prices

Kim Treanor kim.treanor at keionline.org
Wed Dec 20 07:51:19 PST 2017


Drug Industry Spent Millions To Squelch Talk About High Drug Prices
Jay Hancock in the Washington Post on 19 December 2017

Facing bipartisan hostility over high drug prices in an election year, the
pharma industry’s biggest trade group boosted revenue by nearly a fourth
last year and spread the millions collected among hundreds of lobbyists,
politicians and patient groups, new filings show.

It was the biggest surge for the Pharmaceutical Research and Manufacturers
of America, known as PhRMA, since the group took battle stations to advance
its interests in 2009 during the run-up to the Affordable Care Act.

“Does that surprise you?” said Billy Tauzin, the former PhRMA CEO who ran
the organization a decade ago as Obamacare loomed. Whenever Washington
seems interested in limiting drug prices, he said, “PhRMA has always
responded by increasing its resources.”

The group, already one of the most powerful trade organizations in any
industry, collected $271 million in member dues and other income in 2016.
That was up from $220 million the year before, according to its latest
disclosure with the Internal Revenue Service.

PhRMA spent $7 million last year to prepare its ubiquitous “Go Boldly” ad
campaign and gave millions to politicians who were up for election in both
parties in dozens of states. It lavished more than $2 million on scores of
groups representing patients with various diseases — many of them dealing
with high drug costs.

Some of the biggest patient-group checks went to the American Autoimmune
Related Disease Association, for $260,000; the American Lung Association,
for $110,000; the Juvenile Diabetes Research Foundation, for $136,150; and
the Lupus Foundation of America, for $253,500.

PhRMA also gave big money to national political groups financing
congressional, presidential and state candidates. The conservative-leaning
American Action Network got $6.1 million. The Republican Governors
Association got $301,375. Its Democratic counterpart got $350,000.

PhRMA’s state and federal lobbying spending rose by more than two-thirds
from the previous year, to $57 million.

“That’s PhRMA. They do it all” to protect drug companies from potential
policy risks, said Sheila Krumholz, executive director of the Center for
Responsive Politics, which tracks political financing. “And they’re going
to marshal even more resources when they perceive that these threats or
opportunities are most imminent.”

Threats seemed especially dire last year. Storms of bad publicity hit the
industry in the form of stories about arrogant executives and
thousand-dollar pills.

Democratic presidential candidate Hillary Clinton said some pharma
companies were “making a fortune off of people’s misfortune.”
Then-candidate Donald Trump, a Republican, suggested he could save $300
billion annually by requiring drugmakers to bid on business.

Nonprofit organizations such as PhRMA must file detailed disclosures with
the IRS. PhRMA, which submitted its 2016 report in early November, shared a
copy with Kaiser Health News.

The group also aimed dollars at states where policymakers were considering
drug-related measures such as price limits or greater price transparency,
the document shows.

It gave $64 million to a California fund established to defeat a proposal
requiring state agencies to pay no more for drugs than does the federal
Department of Veterans Affairs. Also supported by direct contributions from
drug companies, the fund spent $110 million last year to defeat the
initiative, California regulatory filings show.

This year, California established a less comprehensive law requiring drug
firms to give notice and explanation when they substantially raise prices.
PhRMA recently sued to block that measure.

In Louisiana, where policymakers were considering proposals to make drug
prices clearer to consumers, PhRMA gave campaign contributions directly to
scores of state legislators last year. The group also gave hundreds of
thousands of dollars to help defeat a ballot proposal for single-payer
health care in Colorado.

Last year’s massive mobilization underscores how besieged the industry felt
over complaints about soaring medicine prices and high profits.

PhRMA’s $271 million in revenue for the year represented its biggest budget
since 2009, when it recorded $350 million in dues and other revenue.

The $57 million it spent on lobbying was also the most since 2009, when the
lobbying bill was $70 million. So was the $7 million spent on advertising,
a cost that should rise this year, since the “Go Boldly” ads aired in 2017.
PhRMA employed 237 people last year, up from fewer than 200 in 2011.

The association’s 37 members include the biggest and best-known drug
companies including Johnson & Johnson, Celgene, Merck, Pfizer, Eli Lilly
and Amgen. Holly Campbell, a PhRMA spokeswoman, declined to make an
executive available to discuss the report, saying it doesn’t comment on

“PhRMA engages with stakeholders across the health care system to hear
their perspectives and priorities,” she said in an email. “We work with
many organizations with which we have both agreements and disagreements on
public policy issues.”

Patient groups receiving PhRMA money often deny that it influences their
policies or keeps them from criticizing high drug prices.

The Lupus Foundation has policies to ensure there is no conflict of
interest, a spokeswoman said. At the Juvenile Diabetes Research Foundation,
donors such as PhRMA “have no role” in the group’s decision-making process,
a spokeswoman said.

“No funder influences our position, agenda or science-based messages” at
the American Lung Association, its spokeswoman said.

The American Autoimmune Related Disease Association did not respond to
requests for comment.

During negotiations over Obamacare, PhRMA agreed to support overhauling
health care relatively early in the process, in mid-2009. Then it threw its
muscle into promoting the measure, which promised billions in new revenue
for members. President Barack Obama signed it into law in March 2010.

PhRMA shrank substantially after that, taking in around $205 million for
several years in a row starting in 2010.

Last year it agreed to increase dues by 50 percent to raise an extra $100
million, Politico reported. In an attempt to distance itself from drug
companies earning bad headlines, it also decided to bar members that didn’t
invest a minimum in pharmaceutical research.

Kim Treanor
Knowledge Ecology International
kim.treanor at keionline.org
tel.: +1.202.332.2670 <(202)%20332-2670>

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