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On K Street

Inside PhRMA's fight to kill Democrats' drug pricing plan

For months, the pharmaceutical industry has waged a multimillion-dollar lobbying campaign designed to keep Democrats’ sweeping drug price proposal out of their massive child care, health-care and climate change bill, Theo and our colleague Rachel Roubein report.

The House’s signature proposal would — for the first time — allow the federal government to directly negotiate with drugmakers for lower prices in Medicare on some medicines.

But the plan faces pushback from several more moderate lawmakers who argue it could stifle the advent of new breakthrough drugs. Sen. Ron Wyden (D-Ore.), the chairman of the Senate Finance Committee, has been hashing out a proposal that can get all the members of his caucus on board — but no plan has yet been made public.

The slow progress is in part due to an all-out lobbying campaign from the Pharmaceutical Research and Manufacturers of America, the drug industry’s powerful trade group, to ensure nothing like the House proposal makes it into the reconciliation bill. PhRMA shelled out more than $22.4 million lobbying on drug pricing and other issues in the first nine months of the year, according to recent disclosure filings. And it has run TV ads warning the proposal will mean that “politicians … decide which medicines you can and can’t get.”

Behind the scenes

Much of PhRMA's push has been focused on lobbying a handful of Democratic lawmakers who’ve expressed concerns about the proposal, according to lobbyists familiar with the efforts.

But on Thursday, Stephen Ubl, PhRMA’s president and chief executive, sat down for the first time this year with Rep. Richard Neal (D-Mass.), the chairman of the House Ways and Means Committee, which advanced the House drug-pricing proposal last month, according to a committee aide. 

It’s not clear exactly what prompted the meeting.

Ubl has met with Wyden only once this year, in July, according to a Senate Democratic aide, and there’s been relatively little communication at the staff level. “Neal emphasized the need for serious measures that will lower costs for patients,” the aide wrote in an email to The Early.

Brian Newell, a PhRMA spokesman, said only that the trade group has had “constructive engagement with various policymakers” in an effort to “lower costs for patients, while protecting choice, access and future innovation.”

Wide-ranging effort

Ubl and pharmaceutical company executives also met in September with Susan Rice, who heads the White House’s Domestic Policy Council, according to a person familiar with the matter. But PhRMA appears mainly to have focused its efforts on lawmakers with concerns about House Democrats’ proposal. They include three House Democrats who opposed drug-pricing language in committee last month, and Sens. Tom Carper (D-Del.), Kyrsten Sinema (D-Ariz.) and Robert Menendez (D-N.J.).

In an interview, Menendez declined to say where he stood on specific policy changes the Senate is exploring on the drug pricing provisions. 

“I said to Ron, you got to show me the whole package, and then we’ll see where we’re at,” Menendez said, referring to Wyden.

Some of the lawmakers who appear wary of the House proposal represent states or districts where pharmaceutical and biotechnology companies are major employers.

“This is like if you were coming after the auto industry,” said one Democratic lobbyist who represents the industry, speaking on condition of anonymity to talk candidly. “How would Michigan react?”

PhRMA has said it supports efforts to lower prescription drugs prices but has argued that House Democrats’ proposal would cost jobs and slash how much money the industry could spend on research developing new drugs.

As it fights the proposal, PhRMA has added more Democratic lobbyists to its already deep bench, including Eben DuRoss, who was previously the Democratic Senatorial Campaign Committee’s finance director and also worked on the 2016 campaign of Sen. Catherine Cortez Masto (D-Nev.).

The trade group also hired Chris Putala in June as an outside lobbyist. Putala is a former Biden Senate aide who had never lobbied on health care issues before this year, according to disclosure filings. Disclosure filings show that he’s lobbied the White House and the Senate on PhRMA’s behalf.

Some lobbyists suggested lawmakers might ultimately hash out a compromise that doesn’t go as far as House Democrats’ language. Reps. Scott Peters (D-Calif.) and Kathleen Rice (D-N.Y.), both of whom opposed the House plan in committee, met with White House staffers on Friday about a potential way forward, according to two people familiar with the matter, but no deal has been finalized.

But one rival plan — a bill led by Peters and a third lawmaker who voted against the plan in committee, Rep. Kurt Schrader (D-Ore.) — has drawn criticism from both progressives who favor a tougher approach and the drug industry, which says it goes too far. 

“While we appreciate there are Democratic lawmakers who want to find a more responsible path forward, this proposal falls short of the balanced approach patients need to lower their drug costs,” PhRMA spokesman Newell told The Early.

He said Peters and Schrader’s bill would still impose “government price setting on some of the most innovative treatments covered by Medicare” and “punitive measures to impose price controls and retroactive penalties on medicines even if the prices paid by insurers and health plans have fallen.” 

But Peters told The Early he thought compromise was possible.

“My understanding is that a lot of senators are interested in figuring out something that might pass, and so we’re talking to a lot of offices about our bill,” he said.

At the White House

Former HUD officials urge Biden to protect affordable housing programs

First in The Early: More than two dozen former officials who worked in the Department of Housing and Urban Development during the Obama administration are releasing an open letter this morning to President Biden, Senate Majority Leader Chuck Schumer (D-N.Y.), and House Speaker Nancy Pelosi (D-Calif.) urging them to expand rental assistance and make “long-overdue investments needed to repair and preserve" public housing as negotiations continue over the White House's package of far-reaching social programs.

  • “We are urging you — do not leave these millions of people and families behind as you are negotiating final spending in the Build Back Better Act,” write the former officials. “Affordable housing priorities funded in the Build Back Better Act, if properly targeted, will lead us toward affordable, safe and stable housing, and will decrease racial disparities caused by historic and current racist housing practices and decades of community disinvestment.”

Context: “Low-income housing, and the voucher program in particular, are among those most at risk of being sharply scaled back as the White House seeks to slash the package to accommodate the demands of two centrist Democrats, Senators Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona, according to several people involved in the talks,” the New York Times's Glenn Thrush reports. 

The letter calls for expanding the federal government's main voucher program for helping poor, elderly and disabled Americans pay for housing further than what the House Financial Services Committee approved in September. The former officials want “voucher investments that would help roughly 1.7 million Americans secure affordable, safe, and stable housing (750,000 vouchers, 205,000 of which are set aside for people experiencing/at-risk of homelessness).”

On the Hill

Democrats say they're close to deal on Biden's Build Back Better plan

Democrats on Oct. 24 said they are nearing a deal on President Biden's domestic policy package through compromise. (The Washington Post)

Breakfast at Biden’s: Negotiations over President Biden’s domestic agenda reached a critical juncture this weekend, culminating in a Sunday breakfast meeting between Biden, Senate Majority Leader Charles E. Schumer (D-N.Y.) and Sen. Joe Manchin III (D-W.Va.).

Here’s where negotiations stand: 

  • Manchin wants a $1.5 trillion social spending bill, but the White House wants $2 trillion. That means two popular Democratic priorities may need to be cut from the final bill to reduce costs, Politico’s Heather Caygle, Alice Miranda Ollstein, Eleanor Mueller and Marianne Levine report.
  • Sen. Kyrsten Sinema (D-Ariz.) opposes raising taxes on corporations and the wealthy, but “has been speaking with Sen. Elizabeth Warren (D-Ma.) in recent days about a proposal that would impose a minimum corporate tax of 15 percent, as well as a ‘mark-to-market’ plan,” our colleagues Seung Min Kim and Ashley Parker reported over the weekend.
  • Medicare’s dental benefit could be converted into an $800 voucher. Progressives are “critical of that idea but acknowledged it could be a way to get aid to seniors sooner,” Politico reports.
  • Paid leave has been trimmed from 12 to four weeks, and could be removed from the bill entirely. “Paid leave advocates are up in arms over what they see as an unwillingness by the White House to fight.”

For your radar: 

  • Happening today: House Speaker Nancy Pelosi (D-Calif.) expects Senate Democrats to unveil a tax proposal that will replace the corporate tax hike as a source of funding for the bill. “We probably will have a wealth tax,” Pelosi said on CNN’s “State of the Union” Sunday. “But, again, it’s only 10% of what we — you need.”
  • Happening Thursday: Pelosi previously said she wants Congress to pass the bipartisan infrastructure bill by Oct. 31, when funding for surface transportation expires and before COP26 and next month’s gubernatorial elections. The vote could happen as soon as Thursday. “We have 90 percent of the bill agreed to and written,” Pelosi said.

The Media

What we’re reading: 

Viral

VP Biden vs. President Biden

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