Drug makers launch ‘Hail Mary’ campaign to sink reconciliation bill

This gathering, the annual planning meeting of the industry’s most prominent trade group, took place last week at the Conrad Washington Hotel and was attended by executives from some of the largest drug manufacturers in the country.

At a time when Democrats are due to pass a reconciliation bill, the routine meeting of the Pharmaceutical Research and Manufacturers of America, or PhRMA, has become an opportunity for board members to address allies in the House and Senate.

Several pharmaceutical lobbyists have spoken to POLITICO about the mood on K Street regarding the lobbying effort, and most have been granted anonymity so they can speak freely about their work.

The stakes are high for Democrats to deliver on key pledges to rein in health care spending before the midterm elections in November, and it represents a major victory towards the party’s 20-year goal of allowing Medicare to negotiate drug prices.

Despite the industry’s legendary influence, momentum appears to be building for a deal, punctuated Wednesday night by the announcement of an agreement between Senate Majority Leader Chuck Schumer and the Senate Democrat most skeptical of the reconciliation bill, Joe Manchin West Virginia, which includes tax and climate measures that were once lifted.

Democrats are desperate to revive anything from the ambitious agenda that President Joe Biden laid out early in his presidency. Drug pricing provisions will also save the government $288 billion over the next decade, which can be used to fund other priorities. Using the budget reconciliation process, Democrats can pass a drug pricing plan with just 50 votes in the Senate. They have September. 30 is the deadline to act, and the senators are set to retire for the August break after next week.

“We are indebted to our members”

The pharmaceutical industry has spent millions of dollars over the past two years to counter drug pricing plan iterations and will now use “every tool.” [it] must reject” the conciliation bill, PhRMA spokesman Brian Newell said in an emailed statement.

PhRMA “continues our active engagement with Hill to remind legislators of the significant shortcomings of this bill,” he said.

This week, it’s the Biotech Innovation Organization’s turn to head to Capitol Hill as executives from the industry group’s member companies fly in for their own board meeting.

For BIO’s small-to-medium member companies, “policy changes can mean your company sinks or floats very quickly, and that’s a little lost for many Hill employees who may only be familiar with larger companies.” said Nick Shipley, BIO’s chief advocacy officer.

The group will continue to urge lawmakers to vote against the bill as long as it includes Medicare negotiations. However, part of the BIO’s advocacy strategy also includes promoting policies that aim to mitigate harm.

“It doesn’t mean you’re giving up the opposition, it doesn’t mean you should just let go of the situation,” Shipley said. “But if we have the opportunity to achieve a real improvement in the bill, we will do it. It’s just something we owe to our members.”

One of the changes the group is seeking includes repealing a provision in the 2017 Republican tax law that requires companies to amortize their research and development expenses over several years rather than claiming them for one year. This provision was in previous versions of the Conciliation Bill and enjoys widespread support.

Former rep. Ron Klink (D-PA), now a Nelson Mullins lobbyist who considers PhRMA a client, jokingly told POLITICO that he rejects the reconciliation bill at every opportunity, including poking fun at his former House colleagues about their offers drug prices to the Democratic Club when he’s in town.

“This is the industry that cured us of the plague and got America back to work, and you shit on them all,” he said with a laugh, recalling his conversations in a private club near Capitol Hill. “And of course they don’t take it very well, but we are good friends and they tolerate it.”

While Klink believes the drug pricing plan is bad for both patients and the pharmaceutical industry and could lead companies to move operations overseas, he said he understands why Democrats feel the need to pass it.

“I’ve been in those rooms when it comes down to it,” he said. “And they sit there and say, ‘Look, we can hang either together or separately.’ And if we don’t miss something, we’ll get our butts kicked in November.”

The industry has combined its lobbying for leather shoes with advertising campaigns designed to bring the issue to the attention of lawmakers.

FRMA and National Manufacturers Association, which includes pharmaceutical companies, is launching TV and digital ads that reinforce a long-standing argument that the measure will slow innovation and drug development. But advertising has so far refrained from addressing individual members.

“It’s risky to wait until September”

Biden’s reconciliation bill was once a multi-trillion-dollar giant that proposed raising taxes on the wealthy to provide free community colleges and kindergartens and fight climate change. He shrunk in the face of opposition from Manchin and another Democrat in the Senate. Kirsten Cinema or Arizona.

The fate of the measure appeared uncertain after Manchin appeared on Fox News in December and said he could not vote for it. But the bill began gaining momentum earlier this month when Schumer reintroduced the drug price provisions — the least objectionable part of the bill — and only continued to gain momentum, culminating in a deal between Schumer and Manchin on Wednesday.

The plan would raise $739 billion largely through allowing Medicare to negotiate drug prices. the most expensive drugs, higher corporate taxes and stronger tax laws. The funds will be used to extend Affordable Care Act subsidies by three years, cap Medicare Part D out-of-pocket drug spending for older adults at $2,000 a year, combat climate change, and reduce the deficit.

And just as drug makers have ramped up their lobbying, so have insurers and patient advocates. For example, the Blue Cross Blue Shield Association and the AARP are pushing for legislators to pass a bill, each running ad campaigns for expanding subsidies under the Affordable Care Act and for drug languagerespectively.

Groups including the Alliance for Public Health Plans are pushing for subsidies to be extended for more than a few years – ideally permanent – but the price is probably too high for Democrats. The original plan extended the expanded subsidies by two years, with a new deal announced on Wednesday bringing them up to three.

Bill Sweeney, AARP’s senior vice president of government affairs, said the group has been talking to lawmakers on both issues — and has stepped up its network of members on the ground to write to its members of Congress.

“This is the culmination of over three years of really intense work. We will do everything in our power to reach the finish line,” said Sweeney. “I hope people will continue to focus on how important, transformative and historic this is.”

A group of seniors also ran ads in West Virginia to promote Manchin and counter ads from pharmaceutical industry ally, the 60 Plus Association. it said yes “could not stand the pressure” by agreeing to support the reconciliation bill.

“Everyone knows that Joe Manchin cares about the people of West Virginia, and he knows too many of us are struggling to pay for our drugs while the big pharmacists are making record profits.” The GAAP declaration states. “That’s why he supports allowing Medicare to negotiate drug price cuts.”

There is also pressure to vote quickly. “Who knows what other powers will be in the game? Who knows who might be sick with Covid and unable to vote?” said David Mitchell, founder of Patients for Affordable Medicines, which is pushing for drug pricing reform.

“We don’t have to work hard in the Senate in the sense that we’re trying to win votes,” he said of the group’s support. “We’re trying to make sure we’re doing everything we can to support them, provide support.”

Democrats’ extremely narrow majorities in the House and Senate, their long-standing struggle to reach a reconciliation deal, and a history of successful drug industry lobbying mean that any predictions for legislation remain hazy. But drug makers are concerned.

“You have to understand the dynamics and the context, but you have to keep advocating your interests, voicing your concerns, negotiating,” said one industry lobbyist. “Because you just never know.”