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Roll Call

Management, Press Flap Led to Tauzin’s Exit

For press secretaries, going off message may ruin your day, though it rarely gets you fired. Both you and the boss losing your jobs over a slip of the tongue? Seemingly impossible.

But that’s apparently what happened in recent weeks at the Pharmaceutical Research and Manufacturers of America. Late Thursday night, the massive drug lobby unexpectedly announced that its top executive, ex-Rep. Billy Tauzin (R-La.), was stepping down after five years.

Tauzin did not provide specifics as to why he was leaving the group, but industry and downtown sources said recent news accounts pegging Tauzin’s departure to policy rifts with PhRMA’s board are overstated.

“Phoney baloney,” one Democratic lobbyist said.

Instead, pharmaceutical industry sources say Tauzin’s resignation was not only nuanced but a long time coming. A former chairman of the House Energy and Commerce panel, the ex-Creole State lawmaker was known for a breezy management style, his love of hunting and loyalty to his staff. It was precisely those three qualities, industry sources said, that ultimately forced his early resignation.

Even more, sources confirmed that Tauzin’s imminent departure was an open secret within the trade organization’s Chinatown headquarters. Tauzin would leave either when President Barack Obama signed a health care reform bill or in spring 2010, whichever happened sooner.

It was only after a longtime Tauzin press aide, PhRMA Senior Vice President Ken Johnson, apparently misspoke to a New York Times reporter late last year that sources claimed pharmaceutical executives decided that enough was enough: Tauzin and his top staffer would be allowed to depart quietly — but quickly.

“Ken Johnson killed him,” a Democratic lobbyist said.

Johnson, in an e-mail statement, said he was misunderstood.

“The quote in the New York Times was taken out of context, but our board did not know that at the time,” Johnson said. “It’s tough to bat a thousand in this business. Other than that, I am going to uncharacteristically bite my tongue. It serves no useful purpose to comment further. We are totally focused right now on assisting with the leadership transition and making sure that our incoming chairman, [Pfizer CEO Jeffrey Kindler], hits the ground running.”

In the Dec. 23 Times story, Johnson, who was a top aide to Tauzin on Capitol Hill, said drug companies were willing to renegotiate the $80 billion health care deal they cut with the White House.

“There is still a gap that has to be closed between what the Senate is proposing and what the House passed,” Johnson told the Times. “I think there is a growing sense that they may need some additional help to achieve that goal, and as a result we are willing to listen.”

Pharmaceutical executives were irate. Sources said that not only were they blind-sided by Johnson’s apparent offer on behalf of drug companies to throw more money onto the health care bonfire, but executives were also apparently bewildered as to why a staffer, not Tauzin himself, was being interviewed by one of the nation’s largest newspapers.

In response to the Times article, members of PhRMA’s board held an emergency Christmas Eve conference call to vent about Johnson’s wager and to plot their next move.

“There was no question [the board] was upset,” a pharmaceutical industry source said.

Multiple sources also said that Johnson’s flap last year reignited long-held tensions over Tauzin’s tenure, which had irked many pharmaceutical executives since his 2005 arrival.

In calmer times, Tauzin’s penchant for out-of-town hunting trips, his casual management style and Johnson’s freelancing were tolerated, sources said. But when Tauzin’s longtime press aide essentially put billions of dollars’ worth of corporate profits at stake, the jig was up, insiders say.

“A lot of companies thought [Tauzin] wasn’t carrying his weight from a management perspective and that the press operation had gone awry,” a health care lobbyist said. “Billy wasn’t around, and CEOs were getting frustrated.”

A PhRMA press statement late Thursday indicated that Tauzin’s last day will be June 30. Johnson told his staff on Friday that he will leave the same day.

An avid sportsman, Tauzin has owned hunting preserves in Texas and Maryland, including 230 acres on the Eastern Shore, according to previous reporting by Roll Call.

“He single-handedly is keeping the game population in check in Maryland,” a health care lobbyist said.

And even when he was in town, sources claim that Tauzin, who first served in Congress as a Democrat but switched parties after the 1994 GOP House takeover, did not have the necessary clout with Democratic Congressional leadership and the White House that the trade association’s membership craved.

The companies also were worried about the return on investment for their recent political bets made on Tauzin’s watch. At his behest, the trade group has poured millions of dollars into Democratic political causes to curry favor with the new majority party.

“He was no longer effective in a Democratic-led government,” a Democratic health care lobbyist said. “He didn’t have standing with Democratic leadership on the Hill, he didn’t have any standing or relationships in the White House.”

“He left the party,” the source added. “People sort of remember that.”

As a result, numerous sources also claimed Tauzin was marginalized from the outset in the health care reform debate by the pharmaceutical companies themselves and by Tauzin’s in-house lobbying and policy team, which frequently worked directly with PhRMA’s member companies.

“The CEOs have never been as active as they are now,” a pharmaceutical industry lobbyist said. “It wasn’t Billy that was doing all of the discussions with the White House, it was the CEOs. ... They were acting as the principals more that Billy was.”

Tauzin’s personal loyalty to Johnson, too, infuriated Democrats, a source said. Known for his partisanship while a staffer on Capitol Hill, Johnson apparently frustrated member companies for his “insular style.”

“Ken has been a huge problem forever. ... He’s not very collaborative with member companies or a lot of his colleagues,” a health care lobbyist said.

With Tauzin and Johnson leaving, the hunt is on for their replacements. Sources said the drug industry’s top trade group is unlikely to hire another former Member as president and CEO.

Ivan Adler, a headhunter at the McCormick Group, predicted a “tough” recruitment process because of the board’s recent dealings with Tauzin. The job does pay handsomely, though: Tauzin’s annual compensation was estimated at $2 million.

“You need to know somebody who understands ‘Washington,’ and that’s easy to find,” Adler said. “What’s difficult is finding someone who can manage an organization that’s always in crisis mode.”

“It’s constantly herding cats,” Adler continued. “In an organization like PhRMA, this time around they’re going to focus on someone who knows how to run an organization and not just how to get into the Senate Cloakroom.”

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