Lobbying and the Pharmaceutical and Health Care Industries

(2/16/10)- Billy Tauzin, the head of the Pharmaceutical Research and Manufacturers of America (PhRMA), announced that he would be stepping down from his position, after 5 1/2 years on the job in June. PhRMA is the drug industry's main lobbying trade group.

Mr. Tauzin was a House representative from Louisiana for a quarter of a century. He was originally a Democrat but switched to the Republican party in 1995. He served as chairman of the House Commerce Committee, and was instrumental in passage of the Prescription Drug Act of 2003, which created the Medicare Part D classification for drug coverage for Medicare beneficiaries.

Mr. Tauzin was a key player in negotiating the drug industry's agreement with the Obama administration's health care coverage plan, wherein the drug industry agreed to surrender $80 billion in profits over a 10 year period of time to help alleviate the cost of drugs that fell into the "doughnut" hole. In effect this meant that seniors who fell into the "doughnut hole" under their Medicare Part D coverage would only have to pay one-half the price of the drugs that they purchased in the "hole".

Many believe that the administration, as a quid pro quo for this agreement, gave up on their platform promise to legalize the importation of drugs from Canada and other countries, and also on the promise to push for centralized purchasing of prescription drugs by Medicare.

PhRMA spent over $100 million promoting passage of the Obama health-care reform proposals. When the proposed legislation failed to gain passage it was felt by many health-policy experts that Mr. Tauzin would have to pay for siding with the administration and would be forced out of his $2 million a year pay job.

(11/24/09)- The pharmaceutical industry often cites the high cost to research, develop and market drugs as the main reason why drug prices are so high in this country. Research and development are one thing, but should lobbying expenses be included in determining what the price is that a drug should be selling for?

The healthcare industry spent a record breaking $486 million on lobbying last year, according to figures compiled by the Center for Responsive Politics (CRP). So far this year, through September, the industry has spent about $400 million, which means that it will easily break the record expenditures for this purpose set only last year.

Obviously, the big reason for the increased expenditure is the pending health-care reform legislation that is being argued out in the Senate, after the House passed its version of the legislation.

The drug industry spent $237 million on lobbying last year according to the CRP data, and as of September this year, they had already spent this amount on lobbying expenses.

The Pharmaceutical Research and Manufacturers of America, which is the trade association for the drug industry, is on track to spend over $30 million this year in connection with its lobbying efforts for the industry.

The drug industry gave 54% of its political contributions to the Democrats in the 2008 cycle, up from 37% two years earlier as shown by the CRP figures. For the cycle under way ahead of next year's mid-term elections, 59% has gone to the Democrats.


Allan Rubin
updated February 16, 2010

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