After Hours: How much did Big Pharma spend to try to stop new drug price control initiatives?

Summary

Full Measure After Hours: Big Pharma's Battle Against Drug Price Controls

Episode: After Hours: How much did Big Pharma spend to try to stop new drug price control initiatives?
Release Date: January 23, 2025
Host: Sharyl Attkisson

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Introduction

In this episode of Full Measure After Hours, host Sharyl Attkisson delves into the tumultuous battle between the pharmaceutical industry and recent legislative efforts aimed at controlling drug prices. Specifically, the discussion centers on the Inflation Reduction Act (IRA) passed in 2022, which marked a significant shift in how drug prices are negotiated in the United States. Attkisson explores the extent of Big Pharma's lobbying expenditures to thwart these initiatives and examines the implications for American consumers and the healthcare system.

Overview of the Inflation Reduction Act

The Inflation Reduction Act represents a pivotal moment in U.S. healthcare policy, introducing mechanisms for the federal government to negotiate drug prices directly for Medicare. This initiative aims to curb the soaring costs of prescription medications, which have long burdened both taxpayers and patients.

Cheryl Attkisson opens the discussion by highlighting the importance of the IRA:

"The Inflation Reduction act does allow a series of older pharmaceuticals to be negotiated by CMS within the Health and Human Services Division of the government." [03:09]

Lisa Gilbert from Public Citizen underscores the significance of this legislative change, noting it as a "huge victory for people who have wanted fair prices for so long." [02:39]

Big Pharma's Lobbying Efforts

Public Citizen conducted an in-depth analysis of Big Pharma's response to the IRA, revealing substantial financial efforts to influence political outcomes. The focus was on three major pharmaceutical companies: Bristol Myers Squibb, Johnson & Johnson, and Merck.

Lisa Gilbert explains the scope of their investigation:

"We were looking in advance of an important hearing that Bernie Sanders held in the help committee... checking in on their lobbying and who they've been hiring, how many people they've been hiring to try to make that influence happen." [01:14]

The report highlighted that these companies collectively spent approximately $43 million between July 2022 and July 2023 lobbying against the IRA's price negotiation provisions. This financial assault included not only direct lobbying but also legal challenges aimed at undermining the legislation.

Gilbert emphasizes the unprecedented nature of the IRA's provisions:

"This is one of the few times that pharma was defeated." [02:39]

Impact on Drug Prices

The IRA mandates that starting in 2026, Medicare will negotiate prices for ten specific drugs, projected to affect millions of Americans who rely on these medications. This initiative is expected to significantly reduce costs for both the government and taxpayers.

Cheryl Attkisson provides concrete figures to illustrate the potential savings:

"A one year supply of each costs between $6,500 and $7,100. Who can afford that?" [09:09]

Gilbert elaborates on the beneficiaries:

"These 10 drugs, you know, are things that impact millions of Americans... we should feel an immediate impact and not just those on Medicare, but also so the price will drop across the board." [04:18]

Public Citizen's Role

Public Citizen has been a steadfast advocate for drug price negotiations, lobbying tirelessly to ensure that the IRA's provisions are implemented effectively. Their efforts were instrumental in countering the formidable financial influence exerted by Big Pharma.

Gilbert highlights Public Citizen's strategic involvement:

"It's a long term push on our side to try to have negotiation of drug prices... this victory in the Inflation Reduction act is huge because we were up against, as always, the pharmaceutical companies." [03:58]

Specific Case Studies: Xarelto and Eliquis

Two of the costliest drugs targeted by the IRA's negotiation provisions are Xarelto and Eliquis, both used to prevent and treat blood clots. These medications alone accounted for $6 billion and $16.4 billion in Medicare expenditures, respectively, in a single year.

Cheryl Attkisson underscores the financial burden:

"If not from that copay, the rest of it is picked up through the monthly premiums and the taxes that are charged so that these programs can stay afloat. So we're all paying these exorbitant costs for drugs." [09:32]

Challenges and Questions

Despite the breakthroughs achieved by the IRA, significant questions remain regarding the selection of drugs for negotiation and the broader scope of potential price controls. Public skepticism persists about why only ten drugs were chosen and why comprehensive negotiations across all medications have not been initiated.

Attkisson poses a critical inquiry:

"Why just 10 drugs? Why doesn't the government negotiate all the drugs that Medicare buys for patients?" [09:32]

Gilbert attributes the limited scope to relentless lobbying efforts:

"The types of goals they have don't align with what regular Americans want." [09:32]

Additionally, the episode touches upon the complexities of campaign finance and the opaque nature of political advertisements, which often obscure the true benefactors behind various advocacy campaigns.

Conclusions and Final Thoughts

The episode concludes by reinforcing the monumental impact of the Inflation Reduction Act on drug pricing and the ongoing struggle to ensure that pharmaceutical companies do not override public interest through excessive lobbying. Attkisson invites listeners to stay informed and engaged, emphasizing the collective responsibility to advocate for transparent and equitable healthcare policies.

Gilbert delivers a poignant closing statement:

"The lobbying... is enormous, egregious, and it is not working for you." [09:32]

Cheryl Attkisson wraps up with a call to action, encouraging listeners to follow the upcoming Sunday episode for deeper insights and to engage with Full Measure through various platforms.

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Key Takeaways

• Inflation Reduction Act (IRA): Pioneers government negotiation of drug prices for Medicare, beginning with ten high-cost medications.

• Big Pharma's Response: Major pharmaceutical companies spent approximately $43 million lobbying to defeat the IRA's price control measures.

• Impact on Consumers: The IRA is projected to lower drug costs significantly for millions of Medicare beneficiaries starting in 2026, setting a precedent for wider price reductions.

• Public Citizen's Advocacy: Played a crucial role in pushing for the IRA's provisions, countering substantial pharmaceutical lobbying efforts.

• Ongoing Challenges: Questions remain about the limited scope of price negotiations and the pervasive influence of pharmaceutical lobbying on policymaking.

This comprehensive examination sheds light on the intricate dynamics between legislation, corporate lobbying, and consumer welfare, offering listeners a nuanced understanding of the ongoing battle to make healthcare more affordable in the United States.

Transcript

[Cheryl Akisson]

Hi, everybody. Cheryl Akisson here. Welcome to another edition of Full Measure After Hours today, how much did Big Pharma spend to try to stop new drug price control initiatives? A shakeup is in the works with the Trump administration promising to upend our medical health establishment. That stands to hit hard with America's pharmaceutical industry, which has spent hundreds of millions of dollars to try to influence politicians to get favorable laws and policies in recent years. Some hugely profitable drugs are already being targeted under price controls that were passed in 2022 as part of the Inflation Reduction Act. The watchdog group Public Citizen looked into how much some of the big name drug companies have spent trying to fight the new price control initiative. They put out a report that I saw, so I contacted Public Citizen to talk to them about it. And you will hear from Lisa Gilbert today in this podcast with Public Citizen.

[Lisa Gilbert]

Yeah, well, so we were looking in advance of an important hearing that Bernie Sanders held in the help committee. He brought in three CEOs from Bristol Myers Squibb, John Johnson, and Johnson and Merck to talk about price gouging and talk about how they had been attempting to influence the Inflation Reduction Act. So this piece looked right at those three companies checking in on their lobbying and who they've been hiring, how many people they've been hiring to try to make that influence happen.

[Unnamed Interviewer]

What were these companies trying to do? What influence did they try to have on the Inflation Reduction Act?

[Lisa Gilbert]

Well, they did not like it. And that is because it's the first time ever we've been able to negotiate drug prices. As I'm sure you and everyone out there in America knows, drug prices are way too high. And one of the things that pharmaceutical companies do not want is to be able to have those prices negotiated by the government, by Medicare, so that they become lower and regular Americans can have fair pricing.

[Unnamed Interviewer]

I think maybe what I had to learn to understand in covering these stories was the government is the biggest customer for drug companies through Medicare and Medicaid, the state health insurance for the poor. So when the government wants to do something with prices, even though you think I'm not on, maybe I'm not on Medicare, it affects everything because that sort of sets the bar for how companies charge for their drugs and so on. So what came out of their lobbying efforts? And then we'll talk about the money they spent.

[Lisa Gilbert]

Well, interestingly, this is one of the few times that pharma was defeated. So the Inflation Reduction act does allow a series of older pharmaceuticals to be negotiated by CMS within the Health and Human Services Division of the government. And so now there's an initial 10 drugs that have been put forth where we will see price negotiation drop the cost for regular Americans. Not effective till 2026, but just a huge victory for people who have wanted fair prices for so long.

[Unnamed Interviewer]

When people inside the government are negotiating prices to pay for drugs, what's their incentive to get us a good deal? Particularly if the drug companies are paying donations and incentives to the politicians that they report to, meaning the federal officials who are negotiating?

[Lisa Gilbert]

That's such a good question. So the incentive is that Medicare spends huge amounts of money that oftentimes they don't have or is a challenge for resource disbursement. So on. For example, just the 10 drugs that are going to be negotiated under the IRA, $50.5 billion in a single year is what Medicare spent in 2023. So just slicing that a little bit means huge savings for the government and of course, eventually for taxpayers.

[Unnamed Interviewer]

Did public citizen work to lobby to get the ability to have this negotiated in this, in the Inflation Reduction Act?

[Lisa Gilbert]

Absolutely we did. It's a long term push on our side to try to have negotiation of drug prices. And again, you know, this, this victory in the Inflation Reduction act is huge because we were up against, as always, the pharmaceutical companies.

[Unnamed Interviewer]

When do you think we may first start seeing the impact of the drug price negotiations?

[Lisa Gilbert]

It should be 2026. And you know, these 10 drugs, you know, are things that impact millions of Americans. I think 7.1 million is the number of Medicare enrollees that took at least one of these drugs in a year. It's, you know, for issues like diabetes, for heart disease, blood clots, psoriasis, you know, things Americans, you know, need to take drugs regularly for. So we should feel an immediate impact and not just those on Medicare, but also so the price will drop across the board.

[Unnamed Interviewer]

What kind of, excuse me, what kind of money were the drug companies putting into spending to lobby to try to get what they wanted?

[Lisa Gilbert]

Millions of dollars. In this case, 43 million in the period of time that we looked at. So 2022, 2023, you know, it's, they don't say in their disclosures exactly what they're fighting for, but they say that they're lobbying on the Inflation Reduction Act. And since they're all part of the pharma trade association that is very outspoken in opposition, we can clearly intuit that they were using it for.

[Unnamed Interviewer]

Why pick, why do you think the government picked 10 drugs to start with? Why not negotiate, pretty much start negotiations on everything?

[Lisa Gilbert]

Well, certainly that is what we like and what we would hope to see eventually happen. We started, you know, what they were able to win in the Inflation Reduction act is a set of drugs that are single source, meaning only one company creates them where there isn't a generic already. So you can only get the brand name of the drug and which are particularly costly. So starting with these 10, although it doesn't sound like a lot in the grander scheme of drugs, actually is a very significant picture.

[Unnamed Interviewer]

I think one thing that's confusing for people, if they are watching ads on the Internet or tv, they see ads and each one by different sides claims you're going to get taken to the cleaners if this decision is made. How do we figure out when we're being told call your congressman and support this or that, who's really behind the ads and who benefits?

[Lisa Gilbert]

Well, that is certainly a problem, a campaign finance problem. That issue ads are often, you know, said to be from innocuous seeming nonprofits or entities. Citizens for Good Drugs and Good Things. How can you know what they actually are for? Usually you can follow the money and follow disclosures to try to figure out who is behind the shell company or behind the nonprofit. But it's more work than an average citizen just watching TV wants to do. So something we've long advocated for is a deeper level of disclosure on an advertisement. So you can understand where the money.

[Unnamed Interviewer]

Is coming from in terms of political parties. Do the pharmaceutical companies tend to lobby one much more than the other or do they spread the money around?

[Lisa Gilbert]

You know, it's spread around and I think that's because, you know, they want to be prepared for any eventuality and they have the money to do so. There are certainly corporate special interests for whom that is not true. I would say generally we tend to see more money flow to the Republican party closer, more closely linked, you know, conservative goals with major corporations goals. But in this case, PhRMA has the funds to spread more widely and so they often do.

[Unnamed Interviewer]

Can you give a sense of why it's so important for them to have influence? What sorts of things beyond what we talked about? Do they want to be sure to have a say in or control?

[Lisa Gilbert]

Well, you know, they try to make the case over and over again that they need to keep the prices high, they need it for research and development. You know, they want to be able to, you know, invest their money back and come out with the best drugs for the American people. But we know that's not the case. They're actually spending their money, the money they claim they need for research and development on executive compensation, on stock buyback initiatives. You know, their money is going to different places. And so, you know, it's important to them to think about financial policy for that reason so that they can't be reined in when it comes to executive compensation. Important to them to think about reforms across the health sphere. So really, they, not only do they spread their money widely, but they put it into a lot of different topics.

[Unnamed Interviewer]

If you don't know about this, don't worry about answering it. But President Trump, before he left office, put in, I believe, an executive order called Most Favored Drugs, Most Favored Nation Drug Policy. That it's my understanding is, I've asked everybody. It was never implemented. His idea was, the way I understood it, that the companies can't charge more for a drug here at home than they're charging in a foreign country, and that the result would be prices would go up somewhat in a foreign country. But come down here that right now we're subsidizing a lot of other countries that are charged much less. Do you have thoughts about that? Did you know about that?

[Lisa Gilbert]

I do know about that. I mean, I think, as you say, the initiative was never implemented. And, you know, we certainly don't think, based on the amount of influence that pharmaceutical companies have, the money that is sloshing around, it makes sense that it was never implemented and they were able to forestall it. And I also don't think it would have the impact that they claim. The idea that, you know, the American prices would adjust in that way, it's not happened previously. Other countries certainly have different amounts and companies simply charge more in America because they can and they would continue to.

[Unnamed Interviewer]

Do so looking forward at issues that impact our health and the drugs that we take. What do you think is a message people should know about pharmaceutical industry money.

[Lisa Gilbert]

And lobbying, that it is enormous, egregious, and it is not working for you. One stat we haven't talked about yet, 143 lobbyists, is how many people, individual people they hired, to run around the Hill to walk to the administration and tell them that the Inflation Reduction act negotiations were a bad idea. That just shows the scope and scale of what they're able to achieve. And certainly, you know, the types of goals they have don't align with what regular Americans want.

[Cheryl Akisson]

A few more facts. The Inflation Reduction act permitted the federal government, as you may have gathered, to negotiate down the price that Medicare will pay for some older drugs, 10 of them to begin with, drugs prescribed to elderly Americans. That's how the government can have influence because Medicare, the government, is the biggest buyer of pharmaceutical drugs. So if the government finally chooses to negotiate the prices, that impacts in a big way the price that everybody will pay, really, because even private insurers take the lead from the prices set through Medicare anyway. It is estimated that about 7.7 million Medicare patients took at least one of the 10 drugs we're talking about in 2022 at a cost to taxpayers of $46.4 billion that year alone. Think about this. We're talking about just 10 drugs that 7.7 million Medicare patients took in one year. And that was $46.4 billion worth. This is why so many economists say that our system cannot sustain the medical costs that are now being incurred in so many different ways in our society. Two of the costliest drugs we're talking about are Xarelto and Eliquis. Both used to prevent and treat blood clots. In one year alone, Medicare shelled out an incredible $6 billion for Xarelto and $16.4 billion for Eliquis. A one year supply of each costs between $6,500 and $7,100. Who can afford that? And I know a lot of people think, well, Medicare's covering it. My copay is reasonable, or insurance is covering it. But don't be fooled. When insurance or Medicare are covering the cost, that just means we're paying it in a different way. If not from that copay, the rest of it is picked up through the monthly premiums and the taxes that are charged so that these programs can stay afloat. So we're all paying these exorbitant costs for drugs. For some specifics of how much these companies spent lobbying to try to influence how this was all going to turn out, how the price negotiations might turn out. From July of 22 through July of 23, Public Citizen says that Bristol Myers Squibbling, which is connected to eliquis, spent about $10 million lobbying politicians. Johnson and Johnson connected to Xarelto, spent about $11 million. They're spending even more in court. Bristol Myers, Squibb, Johnson and Johnson and Merck sued the federal government calling the drug pricing negotiation program a sham and tantamount to extortion and unconstitutional. Of course, I have a question that I didn't see answered, at least in the write up of the Inflation Reduction act. Why just 10 drugs? Why doesn't the government negotiate all the drugs that Medicare buys for patients? Why should there be any drugs that aren't negotiated in this fashion? Why haven't they always been. And I think again, that can be chalked up to lobbying. Members of Congress, the political parties and other influencers get a great deal of money and political contributions from the pharmaceutical industry. This is one of the subjects under discussion in the upcoming episode of Full Measure on Sunday, January 26th. To find out how to watch, go to cherylakkisson.com, click the full Measure tab and you will see where to watch for a station in time near you. Or you can always watch online at FullMeasure News. We feed the program live about 9:30am Eastern Time on Sundays and then it's posted thereafter. So if you happen to be listening to this after January 26th and you want to catch the story, just go to FullMeasure News. I hope you enjoyed today's podcast and that if you did, you will leave us a great review. Subscribe to it and share it with your friends. I hope you've read or will consider reading my 5 star bestseller follow the How Big Pharma Misleads, Obscures and Prevails. Last time I looked, it was on sale for half price at Amazon, but you can pick it up anywhere that books are sold. And for some interesting original gift ideas or a little something for yourself, go to cherylakkison.com and click the Store tab. We have exclusive original items with slogans like I need to find some new conspiracy theories. All my old ones came true. Proceeds benefit independent reporting causes. Oh yeah, and another slogan on some of those products do your own research. Make up your own mind. Think for yourself.