February 4, 2023

That meeting, an annual planning meeting for the industry’s most prominent trade group, took place last week at the Conrad Washington hotel — attended by leaders from some of the largest drug makers in the country.

As the clock ticked for Democrats to pass the reconciliation bill, the routine meeting of the Pharmaceutical Research and Manufacturers of America, or PhRMA, turned board members into an opportunity to reach out to allies in the House and Senate.

Several lobbyists representing pharmaceutical interests spoke to POLITICO about the K Street vote on the lobbying efforts, and most were given anonymity to speak freely about their work.

Much is at stake for Democrats to deliver on key promises to curb health care costs ahead of November’s midterm elections, and to mark a major victory in the party’s 20-year goal of bringing Medicare into effect. to negotiate the price of medicines.

Despite the industry’s storied clout, momentum appears to be building for a deal, which was punctuated Wednesday night with the announcement of an agreement between the Senate majority leader. Chuck Schumer and the Senate Democrat most skeptical of the Reconciliation Act, Joe Manchin of West Virginia, including once-deprecated tax and climate measures.

Democrats are desperate to reinvigorate some of the ambitious agenda that President Joe Biden set out early in his presidency. The drug pricing provisions also save the government $288 billion over the next decade, which can be used to fund other priorities. Taking advantage of the budget reconciliation process, Democrats can approve the drug pricing plan with just 50 votes in the Senate. They have a September 30 deadline to act, and the senators head off into the August recess next week.

‘We owe it to our members’

The drug industry has spent millions of dollars in the past two years resisting repeats of the drug pricing plan and will now [it] should push back” on the Reconciliation Act, Brian Newell, a PhRMA spokesperson, said in an emailed statement.

PhRMA “continues our aggressive engagement with the Hill,” he said, “to remind lawmakers of the significant flaws in this bill.”

This week it’s the turn of the Biotechnology Innovation Organization to head to Capitol Hill as executives from the industry group member companies fly in for their own board meeting.

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For BIO’s small and medium-sized member companies, “policy changes for your company can sink or swim very quickly, and that gets a little lost for many Hill employees, who may only be familiar with larger companies,” said Nick Shipley, BIO’s chief advocacy. officer.

The group will continue to urge lawmakers to vote against the bill as long as Medicare negotiations are included. However, part of BIO’s advocacy strategy includes pushing for policies to smooth the damage.

“It doesn’t mean you withdraw the opposition, it doesn’t mean you lie down and just let it go,” Shipley said. “But if we get a chance to look for a real improvement in the bill, we will. We simply owe that to our members.”

Among the changes the group is pursuing includes pushing for a repeal of a provision from the Republicans’ tax law of 2017 that forces companies to write off their research and development spending over several years, rather than spending it within a year. year to claim. The provision was in previous versions of the reconciliation bill and has broad support.

Former Representative Ron Klink (D-Penn.), now a lobbyist at Nelson Mullins who considers PhRMA a customer, jokingly told POLITICO that he is pushing back the atonement bill at every opportunity — including rebuking his former House colleagues about their drug prices. proposals at the Democratic Club when he’s in town.

“Here’s the industry that got us out of the blight and put America back to work, and you’re destroying them all,” he said with a laugh as he recounted his conversations at the private club near Capitol Hill. “And of course they don’t take it very well, but we are good friends and they tolerate it.”

While Klink believes the drug pricing plan is bad for patients as well as for the pharmaceutical industry — and could lead companies to move operations abroad — he said he understands why Democrats feel the need to pass it on.

“I’ve been in those rooms when it comes down to it,” he said. “And they sit there and say, ‘Look, we can either hang together, we can hang apart. And if we don’t pass something, we’ll get a kick in the ass in November.’”

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The industry has combined its shoe leather lobby with advertising campaigns designed to raise the issue for lawmakers.

PhRMA and the National Association of Manufacturers, which includes pharmaceutical companies among its members, is rolling out television and digital advertisements that reinforce a long-standing argument: the measure would slow innovation and the development of new medicines. But the ads have so far refrained from calling individual members.

‘Weird wait until September’

Biden’s reconciliation law was once a multibillion-dollar behemoth that proposed raising taxes on the rich to provide free community education and childcare and fight climate change. It shrank in the face of opposition from Manchin and another Senate Democrat, Kyrsten Sinema from Arizona.

The fate of the measure seemed uncertain after Manchin appeared on Fox News in December and said he could not vote for it. But the bill started gaining momentum earlier this month when Schumer brought back drug pricing provisions — the part of the bill with the fewest objections — and has only continued to pick up steam, culminating in the deal. of Wednesday between Schumer and Manchin.

The plan would raise $739 billion, largely by allowing Medicare to negotiate the prices of the most expensive drugs, raising corporate taxes and boosting tax enforcement. The money would go toward extending the Affordable Care Act grants for three years, limiting out-of-pocket drug costs for seniors under Medicare Part D to $2,000 a year, fighting climate change and reducing the deficit.

And just as drug companies have stepped up their lobby, so have insurers and patient advocates. For example, the Blue Cross Blue Shield Association and AARP are urging lawmakers to pass the bill, with each running ad campaigns for extension of the enhanced Affordable Care Act grants and for the negotiating language for drugsrespectively.

Groups, including the Alliance of Community Health Plans, are pushing for the grants to be extended beyond a few years — ideally to make them permanent — but the price tag is likely too expensive for Democrats. The original plan extended the increased subsidies for two years, while the new deal announced Wednesday increased it to three years.

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Bill Sweeney, AARP’s senior vice president of government affairs, said the group has spoken with lawmakers on both issues — and activated its grassroots network of members to write their members to Congress.

“This is the culmination of more than three years of really intensive work. We’re going to do everything we can to get this across the finish line,” said Sweeney. “I hope people stay focused on how important, transformative and historic this is.”

The seniors group has also placed ads in West Virginia to boost and counter Manchin by a pharmaceutical industry ally, the 60 Plus Association, who say he “cracked under pressure” by agreeing to the reconciliation law.

“Everyone knows that Joe Manchin cares about West Virginians, and he knows that too many of us are struggling to pay for our drugs while big pharma is making record profits,” the statement said. AARP advertisement declares. “That’s why he supports letting Medicare negotiate lower drug prices.”

There is also pressure to vote quickly. “Who knows what other forces will be at play? Who knows who are sick because of Covid and can’t vote?” said David Mitchell, the founder of Patients for Affordable Drugs, which is pushing for drug pricing reforms.

“We don’t have to work hard in the Senate, in the sense of trying to win votes,” he said of the group’s advocacy. “We’re trying to make sure we’re doing everything we can to support them, to provide support.”

Democrats’ extremely small majorities in the House and Senate, their protracted battle to agree on reconciliation, and the drug industry’s history of lobbying success mean that any prediction for legislation remains obscure. But drug manufacturers are concerned.

“You have to understand the dynamics and the context, but you have to keep defending the case, expressing your concerns and having the conversations,” said an industry lobbyist. “Because you never know.”