Senators Shield State Interests

Posted October 2, 2009 at 7:09pm

With the Senate Finance Committee’s health care markup nearing a final vote, AARP and drugmakers are preparing to tangle over a plan to scuttle a contentious $80 billion deal between the pharmaceutical industry and the White House.

A spokesman for Sen. Bill Nelson (D-Fla.) on Friday said his boss is expected to reintroduce a proposal that would allow the federal government to pay lower rates for prescription drugs for poor seniors through Medicaid, rather than Medicare.

“Nelson is likely to offer the amendment on the floor,— spokesman Dan McLaughlin wrote in an e-mail Friday.

As party leaders in the coming weeks plot the complicated blending of numerous health care proposals, the two-term Florida Senator will hardly emerge as the only Member balancing policy with economic and political interests back home. But as Nelson’s positioning shows, the process may force health care stakeholders to act — and quickly.

Nelson’s plan to reintroduce his amendment threatens to scrap the high-profile pact reached earlier this year by the Pharmaceutical Research and Manufacturers of America, President Barack Obama and Senate Finance Chairman Max Baucus (D-Mont.). The industry’s cost-savings proposal would stretch out over a decade and narrow the “doughnut hole— in the federal government’s prescription drug benefit for seniors.

If Nelson follows through, a health care lobbyist said, the pharmaceutical industry will spend “millions— on television advertisements and other outreach to attempt to defeat it. The source also suggested drugmakers may try to scare seniors about the cost of Nelson’s plan.

“We oppose it because it’s going to raise taxes on seniors, and people are going to know about it,— the consultant said. “We’re going to spend a significant amount of money to make sure people know the ramifications.—

The Finance Committee shot down Nelson’s plan in its recent markup. The measure failed 13-10, with three Democrats voting alongside their GOP counterparts: Sens. Tom Carper (Del.), Bob Menendez (N.J.) and Baucus.

To drugmakers, Nelson’s plan was the biggest target of the nearly two-week markup. One health care consultant called it “the marquee drug issue— of the ongoing health care debate.

“The Nelson amendment — including a rebate in Part D — is one of the most potentially damaging items for the pharmaceutical industry,— a health care consultant said late last week. “That was the priority vote for the drug industry in this markup.—

The seniors lobby also is gearing up in anticipation of Nelson’s possible floor amendment. An AARP lobbyist on Friday recounted how the organization worked closely with Nelson’s office ahead of the recent markup vote.

“From our perspective, the PhRMA/White House deal is just one way to reduce costs for seniors,— the lobbyist said. “We will have an ad campaign on this. It’s the No. 1 issue for our members over the age of 65.—

Although the White House declined to comment, numerous sources said administration officials were irate with the Sunshine State lawmaker for attempting to renegotiate their deal with the drug industry. The move was seen as pandering to his state’s elderly electorate, which makes up more than 17 percent of Florida’s population.

In an inevitable Nelson amendment redux, health care lobbyists said they will again look to Senators with powerful drug industries in their states, particularly Carper and Menendez.

In Delaware, the pharmaceutical company AstraZeneca employs roughly 8,000 workers. New Jersey is home to numerous life sciences firms, including massive drug and device maker Johnson & Johnson, which employs 14,000 workers alone in the Garden State.

A health care lobbyist called Menendez’s state “the biotech capital of the world.—

“You have to be worried about banging these [companies] too much because they’ll leave your state,— another pharmaceutical consultant said. “For Members that don’t have those high-wage manufacturing jobs in their state, they don’t get it.—

“If building things out of steel was last century, building things out of living organisms is what we’re going to be doing for the next 100 years,— the consultant continued. “If you’re a state that’s doing that, you’re going to do everything you’ve got to grow those jobs. … [Lawmakers] see them as an economic engine for the next 20 to 30 years.—

During the recent Finance markup, other Senators came to the rescue of home-state industries. Minnesota Democratic Sens. Amy Klobuchar and Al Franken on Sept. 15 came out against a proposed tax on medical devices. Minnesota is home to medical device giant Medtronic.

“As Senators from states with vibrant medical technology industries, we write to express our support for health reform efforts that better align incentives and reduce inefficiencies in the current health care system,— the lawmakers wrote. “However, we do not believe that the proposed ‘fee’ on medical device manufacturers would help achieve these generally agreed upon goals.—

Indiana Sens. Evan Bayh (D) and Dick Lugar (R) also signed the letter on behalf of medical device manufacturers. The Hoosier State is home to drugmaker Eli Lilly and Co. and numerous medical device companies.

According to published reports, Minority Leader Mitch McConnell (R-Ky.) also recently defended Kentucky insurance provider Humana, which employs more than 10,000 workers in the Blugrass State.

Health care lobbyists are also planning to pressure Sen. Maria Cantwell (D-Wash.) to vote against Nelson’s amendment. Cantwell, whose state has a 900-employee biologics facility, voted for Nelson’s proposal during the markup.

“We want her to support us on the floor if this comes up for a vote,— a pharmaceutical lobbyist said.