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Drugmakers Dramatically Boosted Lobbying Spending In Trump’s First Quarter

Eight pharmaceutical companies more than doubled their lobbying spending in the first three months of 2017, when the Affordable Care Act was on the chopping block and high drug prices were clearly in the crosshairs of Congress and President Donald Trump.

Congressional records show those eight, including Celgene and Mylan, kicked in an extra $4.42 million versus that quarter last year. Industry giant Teva Pharmaceutical Industries spent $2.67 million, up 115 percent from a year ago as several companies embroiled in controversies raised their outlays significantly.

“It’s certainly a rare event” when lobbying dollars double, noted Timothy LaPira, an associate professor of political science at James Madison University. “These spikes are usually timed when Congress in particular is going to be really hammering home on a particular issue. Right now, that’s health care and taxes.”

Trump has come down hard on drugmakers, stating in a press conference before his inauguration that the industry is “getting away with murder.” He has promised to lower drug prices and increase competition with faster approvals and fewer regulations. Sens. Bernie Sanders (I-Vt.) and John McCain (R-Ariz.), and Rep. Elijah E. Cummings (D-Md.) have introduced bills to allow lower-cost drug imports from Canada or other countries.

Lobbyists weren’t expecting much by way of big policy changes during the comparatively sleepy end of the Obama administration this time last year, but with a surprise Trump administration and a Republican-controlled House and Senate, trade groups and companies are probably “going all in,” LaPira said.

Thirty-eight major drugmakers and trade groups spent a total of $50.9 million, up $10.1 million from the first quarter of last year, according to a Kaiser Health News analysis. They deployed 600 lobbyists in all.

PhRMA, the drug industry’s largest trade group, spent $7.98 million during the quarter —more than in any single quarter in almost a decade, congressional records show, topping even its quarterly lobbying ahead of the Affordable Care Act’s passage in 2010.

In their congressional disclosures, companies listed Medicare price negotiation, the American Health Care Act, drug importation and the orphan drug program as issues they were lobbying for or against. They do not have to disclose on which side of an issue they lobbied.

When Medicare prices are on the table, it should come as no surprise that pharmaceutical companies are interested in influencing congress.

“It’s quite literally hitting their bottom line,” LaPira said.

Drugmakers under fire more than doubled their lobbying dollars. Mylan spent $1.45 million during the quarter, up from $610,000 last year. The company’s CEO faced a congressional hearing in the fall when it raised the price of EpiPen to over $600.

Marathon Pharmaceuticals spent $230,000, which was $120,000 more than last year. Marathon was criticized in February after setting the price of Emflaza, a steroid to treat Duchenne muscular dystrophy, at $89,000 a year. That angered advocates, Congress and patients who had been importing the same drug for as little as $1,000 a year. Marathon has since sold the drug to another company, and the price may come down.

Teva and Shire also more than doubled their spending. Teva was accused as part of an alleged generic price-fixing scheme in December, and the Federal Trade Commission sued Shire because one of its recently acquired companies allegedly filed “sham” petitions with the Food and Drug Administration to stave off generics.

Companies that make drugs for rare diseases also more than doubled lobbying dollars as congressional leaders and the Government Accountability Office work to determine whether the Orphan Drug Act is being abused. Those firms include BioMarin, Celgene and Vertex Pharmaceuticals. Celgene, which makes a rare cancer drug, more than tripled its first quarter lobbying to more than $1 million.

Despite efforts to make good on campaign promises to repeal the Affordable Care Act, House Republicans canceled a floor vote on the American Health Care Act in March after multiple studies estimated that millions of people would lose coverage if it passed, and neither Democrats nor ultra-conservatives lined up in opposition to the bill’s provisions. Drug prices weren’t a key part of the package.

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.


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Marathon Pharmaceutical Drops Out Of PhRMA Following Drug Price Controversy

With the sale of its controversial rare-disease drug finalized, Marathon Pharmaceuticals has taken the unusual step of resigning from the powerful industry lobbying group PhRMA.

Marathon had been a member of the Pharmaceutical Research and Manufacturers of America, and Marathon’s CEO, Jeffrey Aronin, had held a position on the board.

The news of Marathon’s resignation comes after the company was widely criticized this year for the $89,000 price tag for Emflaza, a drug for Duchenne muscular dystrophy. Last month, it sold the drug to PTC Therapeutics.

The resignation also falls as PhRMA works on a review of its membership criteria.

“My view is that we want to represent companies that are really swinging for the fences … [companies] that are taking enormous risks in bringing breakthrough treatments to market,” PhRMA President Stephen Ubl said in a recent interview with Kaiser Health News. “So we’ll be looking at our membership criteria to really focus on those attributes.”

An announcement about PhRMA’s membership criteria is expected in the coming weeks.

Mallinckrodt Pharmaceuticals is also no longer a member of PhRMA. A company spokesperson confirmed Mallinckrodt’s resignation in an email, saying “the significant financial and time commitment required” for PhRMA membership outweighed the policy value.

Mallinckrodt, like Marathon, has been in the spotlight for a high-priced drug. The company had bought the decades-old drug H.P. Acthar Gel, which is used to treat a variety of conditions, including lupus and multiple sclerosis. The drug cost $1,235 in 2005, but in 2015, it was priced at about $35,000.

PhRMA said it had no comment about the two drugmakers leaving the association. Neither company is listed as a member on the association’s website.

Marathon declined to comment for this story. The company has no drugs on the market.

According to a company memo obtained by Kaiser Health News, Marathon has discontinued membership in “all relevant associations” after the sale of Emflaza.

Emflaza was approved as an orphan drug by the Food and Drug Administration in February. But the drug has been available outside the U.S. for decades under the generic name deflazacort.

It is a steroid used to lessen the symptoms of Duchenne, a fatal muscle-wasting disease that affects mostly boys. For years, many American patients have imported the generic version at a cost averaging from $1,000 to $1,600 annually.

Facing public outcry over the price of Emflaza, Marathon first said it would “pause” the launch of the drug. In March, it announced that PTC Therapeutics would buy rights to the drug for $140 million in cash and stock. The drug’s new price has not been announced.

Ken Kaitin, a professor at Tufts University School of Medicine said the pharmaceutical industry has justified high prices by saying it needs to pay for research and development.

But when members like Marathon and Mallinckrodt take older drugs and charge high prices, “the rest of the pharma industry has trouble explaining that to the public.”

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.


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