Policy

Drug Industry Spending Jumped As Cures Crossed Finish Line

Rep. Pat Tiberi, R-Ohio, walks to the Capitol for a vote on Thursday, Sept. 8, 2016. (Bill Clark/CQ Roll Call)

The pharmaceutical and biotechnology industry lobbying giants ramped up their advocacy spending in the final three months of 2016, just as Congress was finalizing a new law aimed at speeding drug development and research.

The Pharmaceutical Research and Manufacturers of America dropped $4.9 million in the fourth quarter of 2016, up from $3.8 in the same quarter in 2015, a CQ analysis of new lobbying filings shows. The Biotechnology Innovation Organization spent $2.3 million to influence policymakers over the same three months, up from $2.1 million the year before.

The spike came as the industry was advocating to get a bipartisan package known as “21st Century Cures” through both chambers of Congress and to the president’s desk. President Barack Obama signed it on Dec. 13.

The spike also hints at the increasingly embattled industry’s concerns about how it will be treated by President Donald Trump, who frequently took aim at the drug industry during his campaign and after winning the election. Congressional leaders also ramped up their scrutiny of drug price increases over the course of 2016.

Overall, PhRMA dropped more than $19.6 million on K St. activities over the course of 2016, up from more than $18.3 million the year before. BIO spent more than $9.2 million in 2016, up from nearly $8.4 million in 2015.

PhRMA and BIO did not immediately comment on their spending.

Lower spending by doctors and insurers

The spending by pharmaceutical companies contrasts with lobbying investments by other health groups, despite increasing congressional focus on repealing the 2010 health care law.

Nearly as soon as Trump was elected, hospitals and insurance companies began to lament the disastrous effects on their industry if the law is repealed without a significant replacement.

However, those industries didn’t immediately ratchet up their spending on lobbying. The major group representing doctors, the American Medical Association, spent nearly $3.9 million, and the organization representing insurers, America’s Health Insurance Plans, spent more than $1.3 million in the fourth quarter of 2016. That’s half a million dollars less than each spent during the same period the year before. The American Hospital Association spent nearly $5 million, a slight uptick from its fourth quarter 2015 filing.

Several health sector lobbyists suggested that many groups are holding back their lobbying firepower for the replacement effort and waiting until more details emerge about how Congress plans to change the law. With only 52 votes in the Senate, Republicans must rely on the budget process known as reconciliation to pass revisions to the law or kill parts of it.

Lawmakers concede, however, that the sector is anxious. Several House members, including Reps. Fred Upton, R-Mich.; Brett Guthrie, R-Ky.; and Richard Hudson, R-N.C.; said they spent last week meeting with hospital officials, health plan representatives and state officials in their districts who are nervous about the effects of repealing the health care law.

Rep. Pat Tiberi, R-Ohio, who chairs the Ways and Means panel’s Health Subcommittee, said his staff is meeting with industry groups nearly every day.

“There’s anxiety, and I understand that anxiety. It’s normal,” he said. “I would have that anxiety if I were in their shoes as well. It’s our job to listen and try to learn about why they have that anxiety and what their concerns are, and work for them for the betterment of their patients. The intensity has kicked up a little bit because of some of the tweets and some of the rhetoric on both sides.”

Other advocacy spending

One consumer group, AARP, dropped $2.5 million on its lobbying activities at the end of the year, up from $1.8 million during the fourth quarter the prior year. Other consumer groups such as Families USA and Enroll America, some of the staunchest defenders of the health care law, don’t retain registered lobbyists.

Abortion rights groups, who see efforts to replace the health care law as a threat to reproductive rights, in part because the law calls for birth control coverage without cost to women, didn’t dramatically up their spending, either. Planned Parenthood spent about $40,000 more on lobbying than at the end of 2015 between its foundation and its action fund. The Center for Reproductive Rights spent about $40,000 less. Groups on the other side, like the National Right to Life and the Family Research Council, spent the same amounts.

Other provider groups such as the American Association of Medical Colleges, the American Academy of Family Physicians and the Children’s Hospital Association also spent less on lobbying in the fourth quarter. The Federation of American Hospitals spent $730,000 in the fourth quarter, a slight uptick from the $670,000 spent in that period in 2015.

Several insurers, including Blue Cross Blue Shield Association, Cigna Corp., Anthem Inc., Aetna Inc., and Wellcare Health Plans Inc. all spent less at the end of 2016 than in the prior year. United Healthcare spent $630,000, up from $490,000, and Kaiser Permanente spent almost $1.5 million, up from $1.2 million the year before.

Over the entire course of 2016, AHIP spent almost $2.5 million less on lobbying than it did in 2015.

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