It was the “ugliest night” the late Rep. Walter Jones, a North Carolina Republican, said he had witnessed in two decades in politics. It was 2003 when members of his party, who were allied with Big Pharma, orchestrated a daring late night coup to pass a bill that industry lobbyists had written. This bill would have poured hundreds of billions of dollars on drug companies. This week, health care advocates were hit with flashbacks. Sen. Kyrsten Sinema, D-Ariz., a group of House Democrats aligned with pharmaceutical lobbyists effectively torpedoed their own party’s efforts to claw back more than $400 billion in prescription-drug costs for consumers and taxpayers.
The White House on Thursday dropped a planTo at least partially reverse the 2003 Republican-backed law barring Medicare from negotiating drugs prices. Progressives balked at a last minute bid by Sinema, other pharma-allied Democrats, to add industry friendly protections. massive restrictions any possible negotiations.
“I am not going to sell out my district,” vowed Rep. Rashida Tlaib, D-Mich., for a bill championed by lawmakers “who bow down to Big Pharma.”
Leslie Dach, chair of the health care advocacy group Protect Our Care, accused the group of “moderate” Democrats who killed the bill this week of “basically doing the handiwork of pharma and standing against patients.”
The new White House framework represents a major setback in years of Democratic efforts at undoing the damage caused by an 18-year old provision championed and supported by pharmaceutical industry allies Rep. Billy Tauzin, a Louisiana Democrat-turned-Republican who then wielded immense power as chairman of the House Energy and Commerce Committee. The legislation extended prescription drug coverage to tens of millions of Medicare recipients — but required them to buy drugs from private insurers and banned Medicare from negotiating bulk price discounts. After months of negotiations Tauzin was finally agreed to by Republican leaders backed by the drug companiesThe 1,000-page bill was dropped in the middle of the night, and members were given just hours to vote.
“The pharmaceutical lobbyists wrote the bill,” Jones told “60 Minutes”2007. “The bill was over 1,000 pages. And it got to the members of the House that morning, and we voted for it at about 3 a.m. in the morning.” (Jones died in 2019.)
Republican leaders even allowed hundreds of lobbyists onto the House floor to whisper promises or threats in members’ ears, after realizing there were not enough votes to pass the legislation. Lobbyists allegedly promised retribution against legislators who opposed the vote. Jones recalled how one member broke down in tears. The vote, originally scheduled to last 15 minutes, lasted almost three hours as industry groups tried to convince enough members to back the bill.
C-SPAN cameras were ordered to be turned off by Republican leaders during the spectacular session. “A lot of the shenanigans that were going on that night, they didn’t want on national television in primetime,” former Rep. Dan Burton, R-Ind., told “60 Minutes.”
The episode demonstrated the power and willingness of the pharmaceutical industry to go to great lengths. It had contributed nearly $1million to Tauzin. The industry was greatly aided by the Medicare non-negotiation policy, which allowed it charge Medicare recipients far more than it charges other government agency like the Department of Veterans Affairs. Like all other agencies, it is allowed to bargain directly with its vendors and contractors. Bush administration Medicare chief Tom Scully (a former lobbyist) ordered his agency not to reveal a cost analysis that projected the bill’s true cost to lawmakers. Several members of Congress said later they would not have supported the legislation if they knew the real price tag — but what was done was done.
Scully got a job as a pharmacist lobbyist just 10 days after the bill had been signed. This position was one he had negotiated while working to the bill. Weeks after that, Tauzin negotiated a new job as the chief lobbyist for Pharmaceutical Research and Manufacturers of America, the industry’s leading lobbying arm. He was awarded a $2 million annual salary by PhRMA after completing his current term in Congress. 15 of his fellow Republican legislators and congressional staffers were also involved in the bill’s development. They were all able to land lucrative lobbying jobs in the industry within a few days of its signing.
When Sinema and pro-pharma allies like Reps. Scott Peters, D-Calif., Kurt Schrader, D-Ore. and Kathleen Rice, D-N.Y., staged a last-minute push to undermine the party’s plans to reverse the 2003 law — amid another all-out lobbying blitz — some patient advocates said they couldn’t help experiencing déjà vu.
The lawmakers are “taking orders from pharma,” David Mitchell, the founder of the patient advocacy group Patients for Affordable Drugs Now, said in an interview with Salon. “What did they get for that? We know that pharma will do anything unethical, immoral.”
Rice, Schrader, Sinema didn’t respond to questions Salon. A spokesperson for Peters, whose Southern California district contains a significant number of pharmaceutical corporate facilities, pushed back on Mitchell’s characterization.
“Rep. Peters is committed to reducing the cost of drugs for seniors and all consumers; his plan does that and still preserves the incentives needed to fund American science and future cures,” Allie Polaski, a spokesperson for Peters, said in a statement to Salon. “Rep. Peters represents one among the three most prominent biotechnology clusters, with 68,000+ jobs supported in San Diego County by it. It should be no surprise to anyone that his campaign supporters include the researchers, scientists and administrators that work in those fields.”
PhRMA responded by attacking Mitchell, noting that his group received most of its funding from John Arnold, a hedge fund billionaire and long-time critic of the industry. tried to counter Big Pharma’s financial influenceCongress
“While his organization is supposedly committed to ‘patient affordability,’ he refuses to hold insurance companies and middlemen accountable for discriminating against sick patients who need life-saving medicines,” Debra DeShong, PhRMA’s head of public affairs, said in an email to Salon.
“Our organization works every day fighting for policies to help make sure patients have access to life-saving treatments with out-of-pocket costs they can afford. Our scientists and researchers work tirelessly for patients and are the reason Congress can meet in person due to their life-saving vaccines and therapies. People who throw around hateful rhetoric like this have no place in serious policy debates.”
PhRMA has led a massive lobbying blitz to kill President Biden’s proposal to scrap the non-negotiation rule, a change that could raise more than $460 billion over the next decade to pay for health care priorities in his Build Back Better plan that now also appear to be on the chopping block. The group has already spent more than $22 millionAccording to data from, the pharmaceutical industry has spent $171 million in lobbying this year on drug pricing and other issues, while the overall industry has spent $171 million lobbying in 2021. OpenSecrets.
PhRMA has particularly focused on lobbying Democratic holdouts on Biden’s proposal, including Sinema, Sen. Bob Menendez of New Jersey and Sen. Tom Carper of Delaware. The industry has also showered cash on lawmakers looking to block Medicare negotiation from making it into the Democrats’ reconciliation bill, donating $1 million to Sinema, Menendez and Peters through September, according to OpenSecrets data. Sinema reached a deal with the White House on a plan aligned with Peters’ proposal, according to PoliticoHowever, progressives opposed the deal, which led the Biden administration, on Thursday, to drop it from the framework.
“It’s been eviscerated,” Rep. Lloyd Doggett, D-Texas, who chairs the House Ways and Means health subcommittee, told Politico Last week. “At some point you have to ask: Is it worth it to pass it at all if it’s going to be some meaningless thing?”
House Democrats said Thursday that they were cut out of Sinema’s deal-making with the White House but vowed to press forward to include Medicare negotiation in the final bill. “If we don’t, it’s only because [the pharmaceutical industry]’s really trying to kill everything and try to convince their lackeys, as they call them in Congress, not to do anything,” House Energy and Commerce Chairman Frank Pallone, D-N.J., who sponsored a House version of the original legislation, told the outlet.
Nearly all of the legislators opposed to the legislation come from areas with a high pharmaceutical presence and have received eye-popping contributions by the industry. Sinema has collected over $500,000She has received numerous awards from the industry throughout her career. Peters has received more awards than $850,000. Menendez has taken more that $1.1 millionThis is no doubt due the many New Jersey-based pharmaceutical companies.
Mitchell distinguished Menendez from Carper and Sinema from her House allies. Menendez and Carper, he said, were “trying to slim it down,” while Sinema and the group of House Democrats were “trying to wreck it, they’re trying to defeat it completely.”
“They are the handmaidens of the industry,” he said. “At this moment, they are working for the drug companies. They’re not working for their constituents.”
Mitchell cited Tauzin’s intervention on behalf of the pharmaceutical industry, raising the specter that history could be repeating itself.
“What the hell do you think might be going on if they were willing to do that then? Now prices are much bigger, the program is more expensive, the market for drugs has grown,” he said. “What is pharma doing now? This is an amoral industry.”
While members of Congress and staff must now disclose information when interviewing for jobs with lobbying firms in order to be eligible for the job, the Congress-to–lobbyist pipeline is still very active, Sarah Bryner (the research director at) said. OpenSecretsIn an interview with Salon. K Street firms are often interested in lawmakers who have chaired subcommittees or committees that are important, she said. “That kind of thing does happen fairly regularly, that’s just a very straight line,” Bryner said.
However, there are some cases of real or apparent corruption that are less obvious.
“It’s tricky” to identify when members of Congress may be crossing the line, Bryner said, “because any activity that they do is going to be observed by people who might ultimately want to hire them as a lobbyist. Lobbying firms treat the performance of your duties in Congress almost as a job interview. … So it’s kind of a difficult relationship to call out explicitly.”
At least 448 former membersAccording to OpenSecrets. Charlie Dent (R-Pa.), a former Rep. Charlie Dent who was a long-time opponent of Obamacare, collected more than $500,000In donations from the pharmaceutical sector throughout his career and once backed an effortTo privatize Medicare, register as a lobbyist. three clientsIn the health care sector, including the major insurer Blue Cross/Blue Shield. Former Rep. Ed Whitfield (Republican from Kentucky), who was once the Chair of the House Energy and Commerce subcommittee for energy and power, resigned in 2016, before his term expired, and soon signed on to be a member of the House Energy and Commerce subcommittee. lobbyist for top pharmaceutical companies.
“There is a common type of member of Congress who expects that they will become a lobbyist when their days in elected office come to an end,” said Jeff Hauser, the founder of the Revolving Door Project at the Center for Economic and Policy Research, a progressive think tank. “Their incentives are not necessarily to sell out thoroughly on all matters, because a low-credibility ex-politician is not necessarily the most effective mercenary lobbyist. But these aspiring lobbyists do have an incentive to appear ‘reasonable’ to business interests, rather than ardently populist.”
This trend is not limited to the pharmaceutical sector. Buck McKeon, R.-Calif., was the former House Armed Services Chairman. He received more than $800,000He was a defense industry veteran during his political career and now works as a cybersecurity expert. lobbyistLockheed Martin is the defense contractor. Hauser also pointed to former Rep. Joe Crowley, D-N.Y., “a business-friendly member with tremendous interpersonal skills who has gone from being a ‘reasonable Democrat’ opposing higher taxes on the financial services industry on the Ways and Means Committee to … a lobbyist protecting the financial services industry from higher taxes.” (If Crowley’s name sounds familiar, it might be because he lost his seat in a 2018 Democratic primary — to Alexandria Ocasio-Cortez.)
Lawmakers are subject to a one-year “cooling off” period before they can lobby on behalf of an industry they oversaw in Congress. But former lawmakers often get around this rule by joining lobbying firms without “technically lobbying,” Bryner said.
“To be a lobbyist, you need to meet certain criteria, including actually meeting with members of Congress or staff,” she explained. “But if you don’t do that — if you just sort of engage in creating the campaign and coming up with material — you may not necessarily disclose as a lobbyist and you’re allowed to do whatever you want.”
Returning to the prescription drugs issue, patient advocates argued the proposed compromise proposal by Sinema, Peters, would be a gift the industry and may even be worse that the status quo. Peters’ bill would restrict Medicare negotiations to Part A drugs, which are usually only administered by health care providers. It would also prohibit Medicare negotiations for drugs that are still in their exclusivity period.
“Their bill isn’t an alternative,” Mitchell said. “It is a bill to defeat negotiation the way it’s written. It pretends to be a Medicare negotiation bill that excludes all the drugs that need to be negotiated.” He called the central proposal of the bill a “fraud” because competition from generics is likely to reduce the price of drugs by 85% to 95% once the period of exclusivity ends anyway. “You don’t need to negotiate over the drugs that are no longer in exclusivity,” he said. “We have a process that lowers the price and it works pretty well.”
The Biden administration seemed to be in agreement. White House officials stated that they agreed. The New York Times that limiting negotiation to drugs that are not exclusive “would make negotiating power pointless.”
It may even be worse. Rep. Peter Welch, D-Vt., a member of Democratic leadership, told reporters in a press call this week that Peters’ bill would allow drug companies to seek additional patent protection after their drug is approved by the FDA, potentially extending the period when negotiations are banned to as long as 21 years.
“The cure here is worse than the disease” because of those potential extensions, Welch said. “Pharma once again is trying to leverage this into not only avoiding fair pricing but advancing price gouging.”
Without negotiation, taxpayers and employers would continue to be at the “mercy of the monopoly pricing power,” Welch said, citing the example of the recently approved Alzheimer’s drug Adulhelm. Although there is little evidence the drug actually worksAdulhelm maker Biogen fixed the price at approximately $60,000 for a year’s supply in in-patient settings, far higher than the $10,000 to $25,000 cost Wall Street analysts had projected. If that drug were administered to one-third of the 6 million Americans with Alzheimer’s eligible to receive it under Medicare, it would cost taxpayers $110 billion per year, Welch said — which would exceed spending on all other medication through Medicare part B.
Lawmakers allied with the industry claim that cutting into drug companies’ profits will hurt innovation. Mitchell, who suffers from multiple myeloma, an incurable blood cancer that he treats with a combination of drugs that carry a list price of $900,000 a year, calls that argument “bullshit.”
The Congressional Budget Office estimatedThe Medicare negotiation reduced profits would result in two fewer drugs being on the market each year for the next 30 years. However, in that cumulative total of approximately 900 drugs, only 10%- 15% would be true therapeutic advancement. Mitchell argues that even that can be mitigated if funding is increased to the National Institutes of Health. Mitchell’s research contributed to all 365 drugsBetween 2010 and 2019, the FDA approved these products.
“You have an industry that gets taxpayer support for research, gets governmental protection — giving it monopoly pricing power — and the government sets up the market,” Welch said. “No other industry enjoys that amount of special privilege.”
A recent survey by The Kaiser Family Foundation83% of adults voted for Medicare to negotiate lower prices. Only 6% of respondents said they believe that drug companies need to charge high prices to fund innovative research, while 93% said they believed drug companies would “still make enough money to invest in the research” needed to develop new drugs.
“The fear in the country among voters is not that Congress is going to go too far in regulating the price of drugs, but that it won’t go far enough,” veteran Democratic pollster Geoff Garin told reporters on Monday. He said that this view transcends party lines and has been held for many years.
Welch, a leading proponent of Medicare negotiation, said it was “political malpractice” to keep the Medicare non-negotiation rule on the books to appease a handful of Democrats backed by Big Pharma’s money.
“Pharma is powerful,” Welch said, but “it’s totally, completely, utterly irresponsible for us not to do it.”
