Drug lobbyists’ battle cry over prices: Blame others
Drugmakers, pharmacists point fingers at each other over rising cost of medicine
WASHINGTON — Hundreds of independent pharmacists swarmed the House and Senate office buildings one recent afternoon, climbing the marble staircases as they rushed from one appointment to the next, pitching lawmakers on their plan to rein in the soaring drug prices that have enraged American consumers.
As they crowded into lawmakers’ offices, describing themselves as the industry’s “white hats,” they pointed a finger at pharmacy benefit managers like Express Scripts and CVS Health, which handle the drug coverage of millions of Americans.
“Want to reduce prescription drug costs?” the pharmacists argued during their visits. “Pay attention to the middlemen.”
A civil war has broken out among the most powerful players in the pharmaceutical industry — including brand-name and generic drugmakers, and even your local pharmacists — with each blaming others for the rising price of medicine.
It is an industry that was already spending nearly double what other business sectors in the U.S. economy allocate on lobbying, and those sums continue to rise. President Donald Trump has only heightened anxiety by accusing the drug industry of “getting away with murder,” even though he has not weighed in with his own proposal.
For now, lawmakers are facing an almost daily assault.
“Everyone is very eager to maximize their profits and get a piece of the pie, and sorting it all out is complicated,” said Sen. Susan Collins, R-Maine.
The question is whether a rare confluence of public outrage, political will and presidential leadership can bring about a meaningful change that will
slow the drain on consumers’ pocketbooks.
“You remember that old photograph of the Three Stooges, their faces cracked sideways and they are pointing at each other?” asked Chester Davis Jr., president of the Association for Accessible Medicines, sitting in the basement cafeteria of the Russell Senate Office Building at the start of a day in which he would make his own pitches on behalf of generic drugmakers. “Everyone is doing the finger-pointing, when in fact there is a lot of blame to go around.”
In polls, Democrats and Republicans alike have lowering drug prices near the top of their health care priorities. Public anger has risen along with the skyrocketing prices for many essential medicines — insulin for diabetes, for example, and EpiPens for severe allergic reactions. But will efforts to reduce drug costs surmount the industry’s aggressive lobbying and campaign contributions?
“It’s still a very uphill fight,” said Rep. Lloyd Doggett, D-Texas, who like Collins has been pushing Congress to increase competition and lower prices, “given the millions they have spent on lobbying, advertising and campaign contributions.”
With billions in profit on the line, the pharmaceutical and health products industry has already spent $78 million on lobbying in the first quarter of this year, a 14 percent jump over last year, according to the Center for Responsive Politics. The industry pays some 1,100 lobbyists — more than two for each member of Congress.
In the 2016 election cycle, the industry poured more than $58 million into the election campaigns of members of Congress and presidential candidates, as well as other political causes, the Center for Responsive Politics data shows. That was the biggest investment in the industry’s history and a 20 percent jump from the last presidential election cycle in 2012.
No single proposal has emerged as a clear winner in the bid to lower prices. Trump has sent conflicting signals: On one hand, he has accused the industry of “price fixing” and has said the government should be allowed to negotiate the price of drugs covered by Medicare. At other times, he has talked about rolling back regulations and named an industry-friendly former congressman, Tom Price, to head the Department of Health and Human Services, and a former pharmaceutical consultant, Scott Gottlieb, to lead the Food and Drug Administration.
Members of Congress have put forward a grab-bag of options, each of which would help or hurt different industry players.
Some address minor aspects, such as a bipartisan bill that would force brand-name drugmakers to hand over samples of their drugs to generic competitors. One would allow for the importing of cheaper drugs. Another would force pharmacy benefit managers to disclose more information about how they did business. For now, it is a free-for-all. The brand-name drug industry is the dominant player. It spends the most on campaign contributions, has the largest army of lobbyists and has the biggest pile of chits among lawmakers to try to protect its own interests.
Its trade group, the Pharmaceutical Research and Manufacturers of America, or PhRMA, was so concerned about its vulnerability this year that it increased its annual dues by 50 percent — generating an extra $100 million to flood social media, television stations, newspapers and magazines with advertising that reminds consumers of the industry’s role in helping to save lives. A second set of PhRMA ads point blame for price increases elsewhere, like benefit managers and health insurers.
In doing so, PhRMA is seeking to rehabilitate a reputation that was damaged by the actions of companies like Turing Pharmaceuticals, which sharply hiked the price of a decades-old medicine. Its unapologetic former chief executive, Martin Shkreli, came to be seen as the ultimate illustration of the industry’s bad deeds.
Though Turing was never a member of the group, PhRMA recently purged nearly two dozen companies from its membership after it voted to exclude investor-driven drug companies like Turing.
Nearly every week that Congress is in session, the industry holds fundraisers at private clubs and restaurants to help bankroll the re-election campaigns of its allies. One former lobbyist for PhRMA recently boasted that he had once organized six fundraising events in a two-day period. (He asked that he not be named because the fundraising efforts are supposed to be confidential.)
In late April, for example, a PhRMA Industry Breakfast was hosted for Rep. John Shimkus, R-Ill., at the National Republican Club of Capitol Hill, a members-only hot spot across the street from the Capitol.
The industry had reason to thank Shimkus. Last year, he helped save pharmaceutical companies billions of dollars by persuading the Obama administration to kill a project that was meant to test ways to lower the cost of the Medicare Part B program, which spent $24.6 billion on prescription drugs in 2015.
Shimkus, who received nearly $300,000 in drug-industry contributions in the last election cycle, led an effort to collect signatures from 242 members of the House challenging the effort. He also co-sponsored legislation that threatened to block it, which became moot after the Obama administration backed down.
A spokesman for Shimkus said his actions were intended to protect cancer patients — pointing to a clinic in his district he said might close if the Medicare program had gone into effect — not the pharmaceutical industry.
But other participants said industry influence — as drug companies attempted to preserve their bottom line — had played a decisive role.
“When we first proposed this, people were warning me, ‘Be careful, everybody on K Street is going to be gunning for you now,’ and I did not really know what they meant,” said Andy Slavitt, a top Obama administration official who pushed the prescription drug price experiment. “Now I know. When you take on pharma, you take on this whole town.”
Stephen J. Ubl, chief executive of PhRMA, acknowledged that his group had been “very engaged” in defending his member companies’ interests, and blamed a few bad actors — not his own members — for the public’s disapproval.
“The researchers wake up every day working for better treatments and cures,” he said, echoing his organization’s multimillion-dollar advertising campaign, “Go Boldly.”