WASHINGTON — Pharmaceutical companies have a frank new message for Washington: Don’t take us for granted.
The industry’s lobbying group, PhRMA, launched a new, seven-figure ad campaign Tuesday with that sentiment prominently laid out across the top, just above a clear reminder of the industry’s role in developing medicines and vaccines for Covid-19.
The group is, at the same time, unveiling a new policy agenda that includes several unprecedented endorsements for drug pricing reforms that will actually ding industry profits, unlike past support for policies that focused on competitors or tiny tweaks.
The policies are much smaller than the drug pricing proposals being considered by Democratic lawmakers, but the group hopes the new plank, which includes a new way to help pay for pricey injectable drugs, will show policymakers that the industry is open to compromise.
The campaign, which will focus on print and digital advertising, is a clear response to lawmakers’ plan to use drug pricing reforms to help pay for expensive new public policies this year. PhRMA is ready to “work with every fiber of our being” against certain changes it considers draconian, according to PhRMA President and CEO Steve Ubl. But, as he put it, “we understand there’s going to be some pain involved.”
“It’s important for us to say, we get it, we’re willing to engage, have these conversations, and be pragmatic,” said Ubl. “What we won’t accept is [a] radical, hyper-partisan proposal that’s going to devastate the industry.”
The new campaign also foreshadows the delicate balance the drug industry will try to strike as it negotiates with a Democratic-controlled Congress and White House, both of which seem intent on taking a hefty financial chunk out of its coffers.
“If policymakers want to punish the industry or if they want to impose meat-axe cuts on the industry for unrelated priorities, they will face opposition,” said Ubl. “If on the other hand — and we hope this is the case — policymakers want to engage on real affordability reforms that lower drug costs for consumers, they’ll find a constructive partner. We’ve got lots of ideas.”
The stakes for PhRMA couldn’t be higher: House Speaker Nancy Pelosi has publicly said that she hopes portions of Democrats’ signature drug pricing bill, H.R. 3, will be included in an infrastructure bill expected to be voted on this summer. That bill would tie what the U.S. pays for certain drugs to the prices paid in other countries and threatens massive fines for drug makers that refuse to lower their prices.
Ubl repeatedly slammed H.R. 3 in an interview with STAT, calling it “a hyper-partisan draconian piece of legislation,” “a job killer,” “an innovation killer,” and “a hope killer.” He also cited predictions the bill could lead to financial collapse for small biotechs. Ubl pledged that PhRMA will “try to push this debate into a more pragmatic center.”
H.R. 3 would also save Medicare $345 billion, according to the Congressional Budget Office.Related:
The policies PhRMA is now endorsing, in contrast, are far smaller. There is an explicit endorsement of the idea, at least, of ending “product hopping,” a tactic drug makers use whereby they introduce a new patented version of a drug to prevent it from going generic.
PhRMA also formally backed a new policy that would see pharmaceutical companies paying Medicare an extra sum for certain expensive injectable drugs to make up for situations where drug makers offer private purchasers a better deal than the price typically paid by the government. The lobbying group has been weighing a version of that proposal for months, and had privately endorsed the policy in negotiations with the Trump White House, but had not previously publicly endorsed it. The group claims the change will save older adults “hundreds or even thousands of dollars a year.”
There is also new language endorsing “addressing patent settlements at the federal level,” though PhRMA is clear that it does not support any changes that would apply retroactively to previous agreements or stop companies from entering into “pro-competitive agreements.”
If its newfound openness to reforms isn’t enough, the drug industry has one other new advantage in the debate over drug pricing: a drastically improved reputation.
Prior to the pandemic, the drug industry was one of the nation’s most hated industries, but that appears to be changing. A February survey from Harris Poll found that 62% of those surveyed gave the pharmaceutical industry a positive rating, versus just 32% in January 2020. A recent poll from Data For Progress, a liberal polling firm, also found that 56% of those surveyed had a positive view of pharma, although 77% of those surveyed still wanted the government to regulate drug prices.
PhRMA’s new ad piggybacks on the industry’s newfound likability. It calls the drug industry’s work on Covid-19, “an American success story we should never take for granted.”
The bulk of the text, however, plugs the group’s new policy agenda, which also touches on racial equity and pandemic preparedness.
PhRMA endorses modernizing the U.S. public health data infrastructure and developing a “clear vision” for the Strategic National Stockpile, among other issues.
On racial equity, PhRMA plugs its recent guidelines on clinical trial diversity and also notes the industry must focus on “improving recruitment and hiring a qualified workforce that is more diverse” and creating “better pathways to biopharmaceutical industry jobs for people of color.” Ubl noted too that PhRMA is “looking at best practices for how our companies can better invest in Black and brown businesses.”
Ubl says he’s under no illusions that the new agenda might be criticized. He insists, however, that it’s an important place to start.
“It’s never going to be enough for some,” Ubl said. “People might quibble within our membership about certain elements. Policymakers may argue that we should do more, but it’s a good place to start. It shows, in my view, credible engagement on the part of industry to try to solve these issues.”