Industry Group Spent Millions on Congress, Patient Orgs to Help Control Pricing Message

Tax disclosure forms for 2016 show that the pharmaceutical industry’s biggest trade group, the Pharmaceutical Research and Manufacturers of America (PhRMA), raised revenue by almost one-fourth and spent the millions it collected among hundreds of lobbyists, politicians, and patient groups—the largest income surge reported by the group since 2009, when it was mobilizing forces to advance the industry’s interests prior to the passage of the Affordable Care Act.

The tax filing, reported by Jay Hancock of Kaiser Health News (KHN), shows how PhRMA increased dues by member companies and increased other income in 2016 to $271 million, up from $220 million in 2015.

PhRMA’s increased spending in 2016 coincides with a spate of bad publicity about high drug prices after several previously inexpensive drugs became extremely costly almost overnight, as when Turing Pharmaceutical’s former CEO, Martin Shkreli, obtained the manufacturing license of a 62-year-old life-saving antiparasitic medication and raised its price from $13.50 to $750 per pill. In addition, candidates in the US presidential election criticized pharma companies because of high drug prices. Then-candidate Donald Trump also criticized high drug prices and said that he could save $300 billion annually by making drug companies bid on business.

In response, PhRMA spent $7 million in 2016 to prepare its “Go Boldly” advertising campaign, which shows patients and researchers united in the fight against diseases such as cancer, heart disease, and Alzheimer disease. The campaign also shows individual patients who benefit from the significant advances allowed by new medications.

PhRMA also gave millions to politicians of both parties who were up for election in dozens of state and federal races, and donated to both parties’ Governors Associations as well as to the American Action Network, a conservative-leaning group. PhRMA’s state and federal lobbying spending rose by more than two-thirds from 2015 to $57 million. The group gave money to states where policymakers were considering setting drug price limits or requiring greater price transparency. For example, PhRMA gave $64 million to a California fund, which was set up to defeat a proposal to require state agencies to pay no more for drugs than the federal Department of Veterans Affairs paid. According to KHN, that fund, which was also supported by direct contributions from drug companies, spent $110 million to defeat the initiative.

Additionally, the organization spent more than $2 million on a number of organizations representing patient groups, many of whose members require high-cost drugs. For example, the American Autoimmune Related Disease Association, the American Lung Association, the Lupus Foundation of America, and the Juvenile Diabetes Research Foundation received some of the largest donations from PhRMA.

PhRMA’s tax disclosure states that its mission is to conduct effective advocacy for public policies that encourage discovery of important new medicines for patients by pharmaceutical and biotechnology research companies. “PhRMA achieves this by working with, and on behalf of, its member companies before governmental and regulatory bodies in the United States and throughout the world in support of pro-patient, pro-innovation policies; specifically, PhRMA advocates for broad patient access to safe and effective medicines through a free market, without government price controls; strong intellectual property incentives; and transparent, efficient regulation and a free flow of information to patients.”

PHRMA’s spokesperson, Holly Campbell, told The Center for Biosimilars^® in an email that the organization doesn’t comment on its contributions aside from what is reported in the tax disclosure. She noted that PhRMA engages with stakeholders across the health care system to hear their perspectives and priorities: “PhRMA works with many organizations with which we have both agreements and disagreements on public policy issues, and believe engagement and dialogue are critical.”