The Wonk Room

Big Pharma Afraid Of Losing Its Seat At The Table

In an interview with the Wall Street Journal, Big Pharma CEOs admit what AHIP’s Karen Ignagni have only implied: they’re willing to support health care reform so long as it increases their profits. As the Wall Street Journal observes, “extending health-insurance coverage to millions of uninsured Americans is likely to benefit drug makers,” increasing their “$291 billion in annual U.S. sales” by $15 to $18 billion, according to some estimates.

But that pay increase my be threatened by the introduction of a new public option — that could negotiate drug prices — and comparative effectiveness research that isn’t guided by an industry hand. As the Wall Street Journal reports, “to help accomplish their goals, the drug makers spent $47.4 million on lobbying in the first quarter, up 36% from a year earlier, according to company-disclosure reports filed with Congress and analyzed by the nonpartisan Center for Responsive Politics. Pfizer Inc. more than doubled its spending on lobbying in the period to $6.1 million”:

The pharmaceutical executives are using their new access to try to steer lawmakers away from measures that could reduce drug margins, pressing instead for cost reductions by hospitals and insurers.

In their meetings at the White House and on Capitol Hill, as well as in speeches and op-ed articles, industry executives and lobbyists have backed such steps as shifting insurance coverage toward prevention, which could increase sales for heart, diabetes and other drugs that patients take long term….Pfizer Inc. Chief Executive Jeffrey Kindler says he backs “comprehensive health-care reform in this country” and is willing to make compromises. But he opposes a public insurance plan except for the poor who otherwise can’t afford insurance, saying it would crowd out private insurers and take “the form of price controls” that fail to reward companies for their expensive and risky investments in drug development.

Indeed, the threat of a robust CER effort and a muscular public option have brought the pharmaceuticals industry to the table and it’s terrified of losing it’s seat. The industry heavily lobbied for input over what’s researched and how, and is now afraid that despite it’s best efforts, some of the CER money will still be spent without its input:

Thornhill, whose firm represents the Partnership to Improve Patient Care–an association funded by BIO and PhRMA and other organizations to lobby on CER–puts the chances of getting the Baucus proposal into health care reform at just 50/50. But even it if is included and signed into law this fall, he notes, a new institute won’t be set up until the end of 2010 at the earliest, with research projects beginning no earlier than 2011.

So “you have this gap between when the [stimulus] funding gets handed out until you have new framework even established,” Thornhill noted. “So its hard for us to go out and lobby to have this Conrad-Baucus entity just control the funding. The pushback is ‘What are we are going to do for two and a half years? Just sit on our hands?’”