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PHRMA FUNNELS MILLIONS TO GROUPS FIGHTING DRUG PRICING REFORMS  
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David Moore
March 1, 2024
Sludge
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_ The pharma lobby gave more than $16 million in 2022 to advocacy
groups, many of them ostensibly “grassroots,” that are battling
the Medicare drug price negotiations now underway. _

Cash and pills, ccPixs.com on Flickr

 

The first-ever round of drug price negotiations are underway between
the U.S. government and the massive drug companies behind 10 of the
costliest drugs covered by Medicare. The companies have until March 2
to respond to the first pricing offers put forward by the Centers for
Medicare & Medicaid Services (CMS) on the 10 selected drugs, which do
not have a generic or biosimilar equivalents and have been available
for at least seven years, among other criteria.

The historic back-and-forth with Medicare over the pricing of
blockbuster drugs is something the pharmaceutical industry spent big
to try and block from happening. The industry spent a record amount
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federal lobbying in 2022, while it focused on stopping the drug price
negotiations in the Inflation Reduction Act (IRA), or on shaping the
policy after it became law. Last summer, the industry’s largest
lobbying organization, PhRMA, sued
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government to halt the drug price negotiations, arguing the program is
unconstitutional, a case that was dismissed
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month. Another lawsuit brought by AstraZeneca, claiming the program
was unlawfully implemented, was rejected
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when a federal judge ruled the company did not have standing. 

In addition to its lobbying activity and legal challenges, PhRMA funds
a host of health care groups that lob public challenges against the
drug pricing negotiations—many of which don’t disclose their hefty
funding share coming from the drugmakers’ lobbying giant. In 2022,
PhRMA donated $16.1 million to groups that challenged the Medicare
drug price negotiations, according to an analysis by the nonprofit
watchdog group Accountable.US. For several of the advocacy groups that
have been echoing Big Pharma’s talking points, the vast majority of
their funding in 2022, the most recent year covered in tax records,
was doled out by PhRMA.

“Big PhRMA spent millions trying to stop Medicare from negotiating
lower prescription drug costs for seniors, and they’ll spend
millions more trying to ban it,” said Tony Carrk, executive director
of Accountable.US. “Drug company CEOs will do anything to keep the
system rigged in their favor, even becoming the entire funding stream
for extreme right-wing groups who defend price-gouging of patients in
need. Motivated by greed, PhRMA’s push to ban Medicare’s new price
negotiation power is a direct threat to the health security and
pocketbooks of millions of Americans who will benefit from the Biden
administration’s historic action.” 

Funding coalitions and advocacy groups that bill themselves as
“grass-roots” is just one branch of PhRMA’s influence spending
to prevent Medicare from negotiating over prices of widely-used drugs.
PhRMA alone mentioned the Democrats’ legislation on drug pricing
reforms in more than $105 million in federal lobbying spending since
the start of 2020, according to Accountable’s review of Senate
disclosures. 

In January, just as CMS negotiations over the 10 selected drugs were
getting started, drug companies raised the prices on 910 brand-name
treatments, research firm 46Brooklyn Research found
[[link removed]].
High drug prices remain a problem for many American consumers: an
August tracking poll
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health policy organization KFF found that 28% of adults say they have
trouble affording the high cost of their prescription medicine. For
these initial 10 Medicare-covered treatments, a recent study
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the Commonwealth Fund found, the U.S. retail price is, on average,
three times higher than it is in other high-income countries.

The Medicare negotiations will run through August 1 and are projected
to save the government $25 billion per year by 2031, according to the
Congressional Research Service. 

PhRMA’s largest outside grant in 2022 was $13.6 million given to We
Work For Health (WWFH), a 501(c)4 industry group that says it supports
policies that foster innovation. WWFH’s policy webpage directly
echoes PhRMA in criticizing Medicare negotiations as “government
mandated price controls.” The organizations’ tax returns show that
in 2022, PhRMA gave $13,612,690
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WWFH, a sum that entirely encompassed WWF’s $13,164,690
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total revenue that year. WWFH was similarly PhRMA’s top grantee
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year before, when PhRMA’s grant made up about 95% of the advocacy
group’s budget.

In a statement
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August, WWFH Executive Director Dan Leonard slammed the government’s
negotiations, saying the provisions would “essentially poison the
industry’s innovation ecosystem.” In addition to disseminating
op-eds, WWFH has spent $430,000 while lobbying Congress and the White
House Office on drug price negotiations starting in the second half of
2021. 

WWFH does not disclose its virtually exhaustive funding from PhRMA on
its website, where the trade association’s logo is nowhere to be
found. A list of industry partners linked on WWFH’s site mentions
the Biotechnology Innovation Organization (BIO) and others, but not
PhRMA, its near-total funder. 

As Democrats were reviving legislation to establish drug pricing
negotiations, WWFH battled the plan through an advocacy campaign that
the PR firm 720 Strategies called, in a document
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taken offline, “a cohesive, industry-sponsored grassroots
program.” The D.C.-based firm, which also lists numerous Big Pharma
companies like Novo Nordisk among its corporate clients
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PhRMA, but in the past few weeks has removed the group’s logo from
its online gallery.

Another organization that opposes the negotiations process while being
heavily funded by PhRMA is RetireSafe, which describes itself as a
“grass-roots” organization that advocates on behalf of seniors on
issues related to Social Security and Medicare. In 2022, RetireSafe
received $355,000
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PhRMA, which made up about 63% of the group’s total revenue that
year. Besides PhRMA, the group’s website says its partners include
drug companies Pfizer and Amgen.

RetireSafe spent at least $50,000 on lobbying in 2022 on issues
including opposing the IRA. In August 2023, RetireSafe President and
CEO Mark Gibbons wrote an opinion piece
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the Washington Times that argued that the negotiations program will
“reduce treatment options for older adults on Medicare and plunge
America’s ability to discover new cures into the darkness.”

RetireSafe has been receiving funding from PhRMA since at least 2011,
and it has also been funded by the Biotechnology Innovation
Organization, another prominent pharmaceutical lobbying group. In
2013, RetireSafe sent a letter to Congress, claiming to be co-signed
by hundreds of other groups, arguing against a proposal to allow
Medicare to negotiate prices with drug companies. It was
later discovered
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at least five of the organizations RetireSafe claimed had co-signed
its letter said they did not and that they actually supported the
idea. The organization Health Care for America Now speculated that the
letter had been orchestrated by PhRMA, and a PhRMA spokesperson told
Forbes that it collaborates with the group, while declining to confirm
that it was the author of the letter. 

Neither We Work For Health nor RetireSafe responded to a request for
comment on their funding from PhRMA and their advocacy campaigns.

Incubate, a venture capital advocacy group that received all of its
funding in 2022 from PhRMA, has been speaking against the IRA program.
In August 2023, it called
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government’s selection of drugs a “regrettable milestone” in
what it described as a “price control” system. In an Axios
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around the same time, Incubate’s executive director John Stanford
criticized the way the IRA exempts synthetic drugs from negotiations
for nine years while giving more complex biologics 13 years.

Since 2021, Incubate has spent $210,000 while lobbying against price
negotiation legislation, including Build Back Better and the IRA. In
2022, Incubate received $715,000 from PhRMA, the totality of its
revenue, and in 2021 it had received $720,000 from the drug lobby
group. Despite its substantial PhRMA support, Incubate seemingly does
not disclose its financial connection to the group on its website.

Other groups have challenged the Medicare price negotiations in op-eds
with scant acknowledgement of their PhRMA funding. The Council For
Affordable Health Coverage (CAHC), which says it fights back against
what it calls government price controls and is weighing in on the
implementation of the IRA, brought in $220,000 from PhRMA in 2022, a
connection not to be found on its website. The Galen Institute, which
says it works to “counter the march toward government-controlled
medicine,” received $100,000 from PhRMA, the vast majority of
its revenue
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year. The institute’s founder, Grace-Marie Turner, cheered
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HHS of a “draconian and deceptive scheme” in the program. 

The healthcare CEO coalition Healthcare Leadership Council, whose
members include pharma firms Merck and Bristol Myers Squibb, both of
which took on the IRA’s pricing provisions in court, received
$895,000 from PhRMA. The group’s president Mary R. Grealy panned the
negotiations as “artificially-low price ceilings” in a statement
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The conservative mainstay Heritage Foundation also was given $125,000
by PhRMA in 2022. Last year, its director of health and welfare
policy, Nina Owcharenko Schaefer, threw cold water on the negotiations
in a commentary in the Daily Signal, co-authored by the Galen
Institute’s Turner, that claimed the IRA’s drug price program
would result in price controls and “draconian taxes.” Two more
organizations, the Washington Legal Foundation and the Pioneer
Institute, received $40,000 and $50,000 respectively from PhRMA in
2022 as their leaders called the plan “Orwellian” in
the Washington Times
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predicted a “nuclear winter” for biopharma in the Boston Business
Journal.

Though pharma industry groups promote warnings that Medicare price
negotiations will hamper innovation, congressional Democrats have
pushed back with findings
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spending by the top 14 drug companies on stock buybacks and dividends
hugely outpaced their outlays on research and development from
2016-2020. In February, the Democratic-led Senate Committee on Health,
Education, Labor and Pensions (HELP) issued a staff report
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that in 2022, Johnson & Johnson and Bristol Myers Squibb, two
companies producing some of the 10 targeted drugs for negotiations,
spent billions of dollars more on stock buybacks, dividends, and
executive compensation than they did on R&D. One of the drugs now in
Medicare price negotiations is the arthritis treatment Stelara, which
the HELP report found made twice as much for Johnson & Johnson in the
U.S. ($30.4 billion) as it did in the rest of the world combined
($14.9 billion) since 2016.

_David Moore [[link removed]] is co-founder of
Sludge [[link removed]]._

* Big Pharma
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* drug prices
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* lobbyists
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* astroturf activist groups
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