Corporate Democrats like Senator Kyrsten Sinema saved Big Pharma $450 billion by watering down the party’s drug pricing plan.
Big Pharma’s massive lobbying campaign and advertising offensive against Democrats’ drug pricing plan saved the industry nearly half a trillion dollars. That represents a return of more than 1,700 times the investment the drug industry has made on lobbying Congress this year.
This outcome illustrates why industry groups are willing to throw ungodly sums of money at influencing Washington lawmakers. While spending hundreds of millions on lobbying and advocacy efforts might seem exorbitant, it’s nothing compared to the hundreds of billions these business interests stand to lose if legislative decisions don’t go their way.
In September, House Democrats estimated that the drug pricing provisions in their Build Back Better agenda reconciliation bill would save $700 billion over a decade. Democrats’ compromise drug plan — negotiated by pharmaceutical industry favorites Senator Kyrsten Sinema of Arizona, Representative Scott Peters of California, and Representative Kurt Schrader of Oregon — would only save $250 billion during that same time, according to the Committee for a Responsible Federal Budget, a pro-austerity think tank. The difference equals $450 billion in savings.
According to data from OpenSecrets, the pharmaceutical and health products industries have spent $263 million on lobbying in Washington so far this year. Dark money groups with ties to Big Pharma have run misleading ad campaigns promoting the Democrats who worked to gut the party’s drug pricing measure, and they have also spent millions on ads attacking the entire concept of allowing the government to negotiate drug prices — an idea that is broadly popular and one that many other countries have implemented.
In a new tax return we obtained, Pharmaceutical Research and Manufacturers of America (PhRMA) disclosed donating another $2.7 million in 2020 to Center Forward, a dark money group that’s spent at least $1.2 million touting Sinema in Arizona in recent months. PhRMA, a powerful drug lobbying group, contributed $7.2 million to Center Forward from 2016 to 2020, accounting for more than a quarter of its revenue.
The lobbying and related advocacy blitz by Big Pharma to boost allied lawmakers and oppose Democrats’ drug pricing measure may seem staggering, especially if you live in a state or district flooded with their ads. But in total, the effort will end up costing less than 0.1 percent of the $450 billion the industry will get to keep thanks to corporate Democrats’ handiwork. And drug lobbyists are still working to chip away at the legislation further and block provisions that would limit future price hikes.
Of course, there is some chance that Democrats won’t manage to pass their Build Back Better bill at all, despite negotiating the legislation since March. But if the bill does become law, voters may not even begin to see any savings from the drug pricing provisions until after the 2022 midterm elections, when Democrats could lose control of Congress — and some other changes wouldn’t take effect until after the 2024 presidential election.
As Politiconoted on Monday, “Penalties on drugmakers that hike prices faster than inflation and a new $35-per-month cap on insulin won’t begin until 2023. A $2,000 cap for all out-of-pocket drug spending for seniors won’t be implemented until 2024, and the lower prices Medicare will negotiate with pharmaceutical companies for some of the most expensive drugs won’t be available until 2025 — with a full phase-in coming in 2028.”
A front group for Big Pharma is running ads backing the House Democrats who are trying to gut the party’s plan to cut drug prices.
A dark money group funded by Big Pharma is bankrolling ads boosting the conservative House Democrats who are trying to weaken the party’s plan to allow Medicare to negotiate lower drug prices. Additionally, a separate pharma-funded foundation is suddenly sponsoring newspaper ads thanking one of the Democrats for his work on prescription drug policy.
The new ad campaigns highlight the lengths the pharmaceutical industry is willing to go in order to derail legislation that could cut into their bottom line. If Big Pharma’s efforts are successful, it will prevent the government from saving tens of billions annually and stop health care reforms that would cut prices on expensive drugs by more than 50 percent.
Last week, the Washington-based nonprofit Center Forward started running digital ads touting six Democratic lawmakers who are trying to replace Democrats’ long-promised prescription drug pricing bill with far weaker provisions: Representatives Scott Peters (CA), Kurt Schrader (OR), Kathleen Rice (NY), Stephanie Murphy (FL), Lou Correa (CA), and Josh Gottheimer (NJ).
Four of the Democrats supported by the ads — Peters, Schrader, Rice, and Murphy — recently used their committee positions to try to block House leaders from including the drug pricing legislation in the party’s $3.5 trillion reconciliation package. While House Democrats have kept the drug pricing measure in their reconciliation bill so far, Democrats only currently have a four-seat majority in the House, so they can only afford to lose three votes on the package.
Center Forward, who says its mission is “to give centrist allies the information they need to craft common sense solutions,” is heavily funded by Big Pharma. Washington’s top drug lobby, Pharmaceutical Research and Manufacturers of America (PhRMA), donated $4.5 million to Center Forward between 2016 and 2019, accounting for a quarter of its revenue, tax records show.
According to data from AdImpact, Center Forward has separately spent about $600,000 on TV and radio ads promoting Senator Kyrsten Sinema (D-AZ). The group’s pro-Sinema ad campaign started days before she told the White House she does not support Democratic leaders’ Medicare drug negotiation plan or the more limited proposal from Peters. The Senate is split fifty-fifty, so opposition from Sinema would effectively kill it.
The six Democratic lawmakers have collected a combined $2.2 million from donors in the pharmaceutical and health products industries during their careers, according to OpenSecrets, while Sinema has raised more than $500,000. Peters is the top recipient of drug industry cash in the House so far this year.
Conservative Democrats Flipped on Drug Measure
House Democrats’ drug pricing provision is based on H.R. 3, the Elijah E. Cummings Lower Drug Costs Now Act, and would allow Medicare to use its bulk purchasing power to negotiate lower prescription drug prices. According to the Congressional Budget Office, H.R. 3’s drug pricing provision would save the government $456 billion over ten years and “reduce prices by 57 percent to 75 percent, relative to current prices” for various medicines.
Correa, Gottheimer, Murphy, Peters, Rice, and Schrader all voted yes on H.R. 3 in 2019, when it passed the House with no opposition in the Democratic caucus.
Now, Murphy, who cochairs the conservative Blue Dog Coalition, as well as Peters, Rice, and Schrader have all voted against the measure in committee. The lawmakers, along with Correa and Gottheimer, are instead pushing a significantly weaker proposal.
Democratic leaders’ drug pricing measure would allow Medicare to negotiate prices on twenty-five high-priced drugs in the first year of implementation, and fifty drugs in subsequent years. The Peters legislation would only allow Medicare to negotiate prices on older drugs that have lost exclusivity rights but don’t have any generic competition.
Peters recently defended his proposal in a meeting with constituents, saying it would generate $200 billion in savings “using pharma profits.” He warned that Democrats’ plan to recoup $450 billion in drug company profits over a decade would destroy the industry. In reality, it would only affect a fraction of bloated drug company profits.
Schrader told a local TV station: “If pharma thinks they’re buying a vote, they’re getting a bad deal. This bill that [Peters] and I are offering, not only is it dangerous for pharma because it has a chance of passing, but it’s more complete and more in-depth.”
“We All Can Use a Little Good News”
While Center Forward has specifically chosen to praise the Democrats backing an alternative drug pricing measure, their ads don’t actually mention that bill.
Instead, the ads thank the lawmakers for working to pass the Senate’s industry-friendly, bipartisan infrastructure deal.
“We all can use a little good news, can’t we? That’s what Representative Scott Peters has been delivering to us,” says one of the ads. “Working to pass jobs and family legislation that prioritizes our economy and quality of life. It invests in desperately needed improvements to our infrastructure and transportation systems. And it creates jobs. Good paying jobs. Right here. We know we can always count on Scott Peters to deliver. So thank him and ask him to keep fighting for jobs and families.”
Gottheimer and Schrader were among the nine conservative House Democrats who pushed Democratic leaders to schedule a vote on the bipartisan infrastructure deal this week.
The point was to de-link the bipartisan infrastructure legislation from Democrats’ broader, $3.5 trillion reconciliation spending bill, which is meant to finance President Biden’s economic, health, and climate agenda.
Progressive lawmakers have threatened to vote down the bipartisan infrastructure bill unless Senate Democrats first pass the reconciliation bill. The Congressional Progressive Caucus has said it has the votes to block the bipartisan deal.
Sinema is now reportedly threatening to take down both infrastructure measures — the bipartisan one she helped negotiate and the reconciliation package — if House Democrats block or delay the bipartisan bill.
Corporate Influence
Center Forward is an ostensibly “centrist” political advocacy organization, but it’s better understood as a front group for corporate interests. Its board is stacked with corporate lobbyists, including lobbyists for PhRMA.
In addition to its substantial funding from PhRMA, Center Forward has received corporate donations from pharmacy giant CVS Health (which owns health insurer Aetna), oil and gas company ConocoPhillips, electric utility PG&E, as well as Coca-Cola and Facebook. The dark money group has also receivedcontributions from the National Restaurant Association, a lobbying group for big restaurant chains.
Another group funded by PhRMA has been buying ads promoting Peters in a local newspaper.
The Lupus Foundation of America has runads twice in the San Diego Union-Tribune in recent days. (The Daily Poster was alerted to the ads by a subscriber.) The Lupus Foundation of America received $1.6 million from PhRMA between 2011–19, tax records show.
“Thank you Congressman Scott Peters for leading the fight to lower drug costs for patients,” the ads say. “Managing any illness can be difficult. People living with lupus take an average of 8 prescription drugs.”
