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.”
House Democrats say they aren’t sabotaging their party’s drug pricing plan. But their recent donation hauls from Big Pharma suggest otherwise.
The pharma-funded Democrats working to stop their party’s plan to allow Medicare to negotiate drug prices say they are being misrepresented. Amid outcry from their constituents, these lawmakers have been indignantly telling local voters they are the people who are truly fighting for lower drug prices — even as they block their party’s promised drug pricing legislation. Now, new campaign finance disclosures show that their bait and switch happened as they raked in tens of thousands in campaign cash from pharmaceutical industry donors aiming to keep medicine prices as high as possible.
Representatives Scott Peters (D-CA) and Kurt Schrader (D-OR) voted last month to block Democrats from including their signature drug pricing measure in President Joe Biden’s health care and anti-poverty reconciliation bill, after voting for the same measure in 2019.
In response to constituent protest over their votes against the measure, the lawmakers claimed publicly that they are pursuing a more realistic means of lowering drug prices by proposing a watered-down version of the Democrats’ legislation — and insisted that they’re not doing the bidding of corporate interests.
Peters and Schrader are among the few Democratic representatives who are publicly opposing the party’s plan to give Medicare the power to negotiate drug prices. The measure is one of the most popular provisions of the reconciliation bill and has been a key campaign issue for Democrats.
This year between July and September, Schrader and Peters, whose campaigns have consistently relied on pharmaceutical industry cash, received $47,900 and $30,500, respectively from drug industry donors and executives at investment firms with pharmaceutical interests, according to new campaign finance disclosures reviewed by the Daily Poster. The two were among four Democratic lawmakers who voted against the party’s drug pricing plan in House committees on September 15.
Democrats’ Medicare drug negotiation plan has faced problems in the Senate as well. Senator Kyrsten Sinema (D-AZ), who has played the role of key obstructionist in the chamber, received $100,000 from pharmaceutical interests in the third quarter this year. Other reported holdouts on the measure, Senators Bob Menendez of New Jersey and Tom Carper of Delaware, received $34,400 and $34,000 from drug industry donors over the same period.
“The Easy Political Route”
Democrats’ plan to allow Medicare to negotiate drug prices is based on the party’s signature drug pricing bill, H.R. 3. The measure would allow health care regulators to negotiate lower prices on dozens of high-priced drugs that don’t have generic equivalents, as well as insulin. Right now, without this power, Americans are paying the highest prescription drug prices in the world, even though the government provides billions in taxpayer funding each year to subsidize drug companies’ research and development efforts.
Peters and Schrader both voted yes on H.R. 3 in 2019, before the legislation stalled in the Republican-led Senate. Sinema, for her part, campaigned on lowering drug prices in 2018. Now that Democrats control the presidency and both houses of Congress, the lawmakers are trying to make sure Democrats do not include the measure in President Joe Biden’s health care, climate, and anti-poverty reconciliation spending bill.
Schrader and Peters have instead proposed their own, substantially weaker drug pricing legislation that would affect far fewer drugs and will save the government $200 billion according to the lawmakers, far less than the estimated $700 billion in savings from the original provision.
Last week, in San Diego, Peters’s constituents called him out for voting against H.R. 3 and “stonewalling progress” on the issue in Congress. Peters’s office shot back in a statement, saying his views were being “misrepresented” and that Democrats’ drug pricing legislation previously “failed to get the majority support needed to become law.” Of course, Democrats didn’t have full control of the government then, as they do now.
“If anyone thinks this is the easy political route for me, that’s just laughable,” Peters told the New York Times last week. But as the Daily Posterreported, Peters recently told constituents he cannot start rejecting pharmaceutical industry donations, politically speaking.
“I’m not going to unilaterally disarm and defund my campaign so that Republicans can win, I just think that’s a dumb thing to do,” Peters said, despite representing a safely Democratic district.
As Peters was chiding his constituents for demanding he let them pay less for drugs, he was also reaping Big Pharma’s rewards: new campaign contributions from pharmaceutical companies’ political action committees, including those associated with Johnson … Johnson, Regeneron, AbbVie, Genentech, GlaxoSmithKline, and Viatris.
Peters also took a $1,000 donation from Jeff Ricchetti, the brother of White House adviser Steve Richetti who has been lobbying the White House on behalf of pharmaceutical companies.
In Oregon, Peters’s colleague Schrader has also faced outrage for his vote on H.R. 3 and his past donations from the pharmaceutical industry. “We are writing to you to express our collective outrage about your recent vote against the Biden Medicare drug price negotiation plan,” a coalition of advocacy groups wrote in a letter to the Congressman.
Schrader has said that claims that he is against Medicare drug price negotiations are “false,” touting his support of a watered-down alternative, which he said will make drugs more affordable “without stifling innovation, whereas H.R. 3 poses a significant risk to our ability to find future cures,” according to a letter sent to constituents. But his votes tell another story, as does the nearly $50,000 his campaign received from pharmaceutical interests last quarter.
“What’s Best for Arizona”
While Sinema has not spoken publicly about her opposition to Democrats’ drug pricing plan, she and her office have continued to insist that she wants to lower drug prices.
“I believe that my colleagues and I should be focused on policies that ensure prescription drugs are available at the lowest cost possible,” Sinema told the Arizona Republic last month.
As the Daily Poster previously reported, Sinema has recently benefited from a TV and radio ad campaign in Arizona launched by a dark money group heavily funded by Big Pharma, in addition to a new influx of drug industry cash to her campaign.
Sinema spokesperson John LaBombard told HuffPost Wednesday the pharmaceutical industry money isn’t influencing her.
“Senator Sinema makes every decision based on one criteria: what’s best for Arizona,” he said.
Before I get to why they’re doing this, let me identify them. In the House: Scott Peters (whose district includes San Diego), Kurt Schrader (Oregon’s central coast), and Kathleen Rice (central and southern Nassau County on Long Island).
And in the Senate: Kyrsten Sinema (Arizona).
Okay, so why are these four Democrats blocking this measure?
Not because this policy is unpopular with the public. To the contrary, 88 percent of voters favor allowing the federal government to negotiate lower drug prices, including 77 percent of Republicans.
And not because the pharmaceutical industry needs extra money in order to continue to generate new drugs. Taxpayers already fund much of its basic research through the National Institutes of Health. Also bear in mind that a big portion of the costs of bringing a drug to market goes into advertising and marketing — which shouldn’t even be allowed for prescription drugs (and isn’t in most other rich countries, and wasn’t in the US until Big Pharma lobbied for the law to change).
Oh, and pharmaceutical firms have been overflowing with so much cash they’ve been buying back their own shares of stock.
In other words, allowing Medicare to negotiate lower drug prices should be a no-brainer.
So what gives? The question should be who gives. Follow the money.
From 2019 to 2020, Kyrsten Sinema received over $120,000 in Big Pharma contributions, even though she’s not up for re-election until 2024. Throughout her political career, she’s taken over half a million dollars from Pharma PACs and executives. Just before Sinema officially came out publicly against allowing Medicare to negotiate drug prices, a group bankrolled by Big Pharma began running TV and digital ads and sending mailers praising her for “fighting as an independent voice.”
If you think this was a coincidence, I have a bridge in Brooklyn to sell you.
Scott Peters, meanwhile, happens to be the House’s single biggest recipient of Big Pharma campaign cash in the 2022 election cycle so far. Since being elected in 2012, Peters has socked away over $860,000 from Big Pharma. The day after his letter to House Speaker Nancy Pelosi opposing using Medicare to negotiate lower drug prices was published in May 2021, Peters began receiving thousands of donations from executives at pharmaceutical companies and the industry’s powerful lobbying group.
Another coincidence? P-l-e-a-s-e.
Kurt Schrader has raked in nearly $615,000 from Big Pharma since taking office in 2008. This election cycle he’s already got $24,500 from Pharma PACS, the second most of any industry donating to him. One of former his top aides left his office earlier this year and is now lobbying for Big Pharma. According to ethics disclosures, the former aide’s lobbying efforts focus on … guess what? Drug pricing.
The grand total of Big Pharma cash going to these four lawmakers: over $2 million. When you consider the billions that Big Pharma will rake in for keeping drug prices high, this is a small potatoes for them. You might even call it a great investment.
But it’s a huge cost for the rest of us.
The measure isn’t being blocked solely because these four Democrats oppose it. No Republican members of Congress are in support.
But it does seem odd that Democrats would stand in the way of this sort of reform, rebuffing their own president and party — and rejecting the overwhelming preference of voters, including their own constituents — to tank a policy that they themselves campaigned on. I mean, what’s the Democratic Party for if it won’t reduce drug prices for average people? Why were these four Democrats elected in the first place?
Sometimes I worry that pointing out this sort of corruption (and it is a form of corruption) will make people even more cynical than they already are about American politics, resulting in a kind of fatalism or resignation that causes many to give up — and thereby cede the entirety of our democracy to the moneyed interests. My hope is just the opposite: that when people hear about this sort of thing, they’re outraged enough to become even more politically active.
In my experience spanning fifty years of American politics — from interning for Senator Bobby Kennedy in 1967 to serving as secretary of labor in the Clinton administration to advising President Obama — most of the elected lawmakers I’ve dealt with sincerely want to do the right thing. Some don’t feel they can do the right thing if they want to be reelected, and confuse means and ends. A very few are on the take.
By which I mean to say that the situation is hardly hopeless. I refuse to give up on democracy. And I won’t give up on the Democratic Party. But I’m only going to fight for candidates from the Democratic side of the Democratic Party.
What can you do? For one thing, contact your members of Congress and tell them that the first step in getting big money out of politics is to support the Freedom to Vote Act. (You might put in an extra call to Joe Manchin’s office and say you expect him to deliver 10 Republican senators’ votes for this bill — which he helped author — or else agree to reform the filibuster to let voting rights bills be enacted with a bare majority.)
Here’s something else you can do: If you happen to be a constituent of one of these four Democrats, don’t vote for them when they’re up for reelection. Make sure they’re primaried, and then vote in the Democratic primaries for true public servants — who care more about advancing the public good than protecting private profits.
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.”
