The Washington lobbying group representing big pharmaceutical manufacturers is shedding high-level officials even as it prepares for what is shaping up to be an intense battle over rising prescription drug prices.
Several top employees have left or are preparing to leave the Pharmaceutical Research and Manufacturers of America, or PhRMA. That includes Charles Clapton and Pam Smith, considered the group's top Republican and Democratic representatives, industry lobbyists and other sources said. Jennifer Romans, the vice president of federal advocacy, also left recently, and several sources said they expect more departures.
The shakeup comes as the group is raising its profile in Washington after the appointment of Steve Ubl as chief executive officer last year. PhRMA has already laid out $11.7 million on lobbying this year — almost a record clip for the group, which now stands as the third biggest spender among interest groups. It has also made high-profile hires in recent months, including Rodger Currie as executive vice president for advocacy, James Stansel as general counsel and Brian Toohey as head of international advocacy.
The changes reflect the tumult the industry faces and its own increasing awareness of a looming regulatory and policy battle. Both major presidential candidates have slammed prescription drug costs, and regulators are eyeing an overhaul to the way Medicare pays for cancer drugs.
Prominent lawmakers have additionally ramped up scrutiny of the industry since several companies significantly hiked the price of older drugs. Democratic Sens. Patty Murray of Washington and Elizabeth Warren of Massachusetts, for example, have pressed for including drug pricing language in the Senate version of the so-called 21st Century Cures biomedical research package (HR 6), according to lobbyists.
“We were in the same shape when I joined. Public approval was at 36 percent and they were in a real rut,” said former Rep. Billy Tauzin of Louisiana, who led PhRMA from 2005 to 2010. “This industry needs to tell its story much more dramatically, that every day they are spending billions of dollars to try to save somebody’s life."
Currie, who was vice president for government affairs and law at PhRMA from 1998 to 2004 before leaving for Amgen Inc., is described by current and former employees as an extremely aggressive advocate. Some herald him as the catalyst needed to reignite PhRMA’s lobbying efforts.
Restoring that aggressive spirit is a major goal for many of the organization's members. One current employee and several industry lobbyists said former CEO John Castellani’s reluctance to take proactive steps to combat the image of drugmakers as profiteers hurt his standing with member companies, many of which hoped the group would take a stronger defensive stance.
Lobbyists said Castellani left the association in disarray and described a culture of distrust at the upper ranks and a lack of communication both within and between departments. Attempts to reach Castellani were unsuccessful.
One current staffer said the association needs to “act like we belong in the discussion” around drug costs, and pointed to Currie as the individual who can bring the energy necessary to help PhRMA push its message in Congress. Lobbyists said Currie feels he is cleaning up a mess left behind before he joined.
In some ways, the changes are also a natural part of restructuring under a new leader.
“It’s not at all uncommon for a new CEO to come in and examine their senior team,” said Nels Olson, co-leader of the board & CEO services practice at executive search firm Korn Ferry. “As they gear up for legislative and regulatory battles, Steve wants to make sure he has the right people on his team.”
PhRMA hired Korn Ferry to find a replacement for Clapton, and the association is recruiting for additional positions, including those vacated by Smith and Romans.
Ubl, who replaced Castellani in 2015, is optimistic about the group's future despite the tumult. He pointed to new member companies including the big Israeli drugmaker Teva Pharmaceutical Industries Ltd. and Alexion Pharmaceuticals Inc., both of which he says will help PhRMA amplify its message.
"The combination of new voices and resources will also bolster our efforts to engage with all stakeholders and advocate for proactive policies that promote continued medical progress,” he said in a statement.
A spokesman emphasized that Ubl has the full support of the group's board of directors, and added that PhRMA is aiming to become more proactive in the debate around drug costs and come to the table with more policies and solutions, a current staff member said.
PhRMA is also preparing to spend hundreds of millions of dollars in a grassroots campaign around the country, as reported by Politico last week. Part of this influx in spending will be offset by higher membership dues and bringing on new members.