With many lawmakers and presidential candidates declaring open season on drug companies that have substantially jacked up the price of critically needed drugs, the pharmaceutical industry is bracing for a bruising battle this year over calls for price restraints and other reforms.
The leading industry advocacy group, the Pharmaceutical Research and Manufacturers of America (PhRMA), spent $18.32 million on lobbying in 2015, more than a ten-percent increase over the previous year, the Center for Responsive Politics confirmed on Thursday.
That surge in lobbying activity, first reported by The Hill, marked the first time since 2009 that PhRMA has increased its resources for lobbying. For some, that signaled the coming war between Congress and drug companies to address mounting complaints from consumers and government health agencies about unrestrained price gouging.
“The debate continues and it remains a hot topic, a hot political potato, and PhRMA is not shying away from the fight,” Sheila Krumholz, executive director of the Center for Responsive politics, a research group, said in an interview today. “Their issues are many, and they are lobbying on many bills. But I think this increased spending signals that the battle is over drug pricing and Obamacare more generally.”
Former Secretary of State Hillary Clinton and Vermont Sen. Bernie Sanders, the two main Democratic presidential candidates, have vowed action if elected to drive down prescription drug costs and save consumers and government health care programs tens of billions of dollars. Among their proposals are changes in the law to allow Medicare to negotiate lower drug prices with the drug companies and allow the importation of drugs from neighboring Canada.
Meanwhile, the Senate Committee on Aging and the House Committee on Oversight and Government Reform have scheduled bi-partisan hearings on prescription pricing trends and have requested internal documents from several companies deemed the worst offenders, including Valeant Pharmaceuticals International and Turing Pharmaceuticals AG
Turing was formerly headed by hedge fund manager and bad boy of the industry Martin Shkreli, who is currently battling federal criminal charges for alleged securities fraud unrelated to Turing. The drug company gained notoriety last year after it acquired the rights to Daraprim – a decades-old drug used to treat parasitic infections in cancer and HIV patients – and then raised the price from $13.50 to $750 a pill.
Shkreli has been summoned to appear before the two committees, but signaled this week that he would likely invoke his Fifth Amendment right to silence when he goes before the Senate panel and is pondering a similar strategy when he is hauled before the House oversight committee January 26.
Republican Sen. Susan Collins of Maine, the chair of the aging committee, tweeted on Wednesday that Shkreli's decision to invoke the Fifth Amendment was tantamount to stonewalling Congress' investigation, according to media reports. Shkreli fired back that he was making no apology for protecting his interests. "I have valid justification,” he tweeted. “Are you serious? I have constitutional rights. No wonder trust in the US Government is at a low.”
Nervous PhRMA officials have sought to repudiate Shkreli and his media antics, stressing that Turing was not a member of their trade group, according to The Hill. Stephen J. Ubl, PhRMA’s CEO, wrote last December, “A close examination of Turing and Valeant makes clear that they are essentially hedge funds masquerading as pharmaceutical companies.”
Joseph Antos, a health care expert with the American Enterprise Institute, said in an interview today that lawmakers, politicians and the pharmaceutical industry are just now positioning themselves for the time that Congress actually takes up a bill to address prices – but that pressure likely will mount leading up to the November presidential and congressional election.
“We’re still at the lobbying stage, but with storm warnings,” he said. “One could easily see…a push in Congress to pass some aggressive legislation this fall.”