Published in POLITICO
By J. LESTER FEDER and BRETT NORMAN and MATT DOBIAS
If Republicans are mad about PhRMA’s betrayal during the health reform debate, they sure have a funny way of showing it.
Even though the pharmaceutical trade group was the first industry group to make a deal with the Obama administration to support health reform, Republicans are working hard to fast-track the passage of the industry’s top legislative priority — the reauthorization of the Food and Drug Administration “user fee” bill that regulates drug approvals.
In fact, they’re so eager to let it through that they’re not trying to add any amendments to the bill that could cause trouble with Democrats, like measures to repeal parts of President Barack Obama’s health reform law — the kinds of GOP-sponsored measures that have gummed up other legislation, like the student loan bill.
They’re also not pushing for any add-ons that could be seen as punishment for the industry — like the payment cuts House Republicans have proposed for hospitals, a major constituency that also supported the health reform law.
And they repeatedly went to bat during last year’s budget fights to block White House Medicare proposals that would eat into drug makers’ profits.
Though few lawmakers or longtime Washington observers are willing to talk on the record about an industry that is fiercely protective of its image, most agree: The Pharmaceutical Research and Manufacturers of America is playing the Washington game as well as it ever has — and much better than other health care sectors.
“I haven’t seen anybody picking on the PhRMA guys,” observed Tom Scully, a health lobbyist who ran the Centers for Medicare & Medicaid Services under President George W. Bush.
The House Energy and Commerce Committee is expected to approve the bill Thursday, after the panel’s Health Subcommittee took about 25 minutes to endorse the measure Tuesday. The Senate Health, Education, Labor and Pensions Committee made similarly quick work of the bill last month.
Energy and Commerce Committee Chairman Fred Upton (R-Mich.) said Wednesday that he hopes to have a bill on Obama’s desk by July 4.
This is not to say that the GOP-PhRMA marriage is as happy as it once was. Health lobbyists say that Republican lawmakers still seethe at drug makers behind closed doors, and the House Energy and Commerce Committee has been pursuing a probe of the agreement with the administration to back health reform in exchange for limiting PhRMA’s share of the tab to $80 billion.
The one public crack in the GOP-PhRMA alliance has been the frustration voiced by some members about drug makers’ refusal to cooperate with the investigation — but they haven’t exactly used all their leverage to compel cooperation.
Rep. Michael Burgess (R-Texas) said the investigation into the behind-the-scenes dealings of industry and the Obama administration is a “completely separate” issue from the must-pass user fee legislation.
He said it would be “absolutely inappropriate to conflate the two” and that using the user fee legislation for leverage in the investigation — which he said is more about White House transparency than PhRMA itself — “was never considered under any circumstances.”
And while some members stew about the PhRMA deal in private — according to lobbying sources — Burgess said his feelings toward the industry are unchanged by its role in health reform.
“From my perspective, it is fine,” Burgess said of the relationship, adding that he “had no beef with anyone in any of the industries” going to the White House to carve out the best deal they could.
Other health care interests, such as hospitals, can only dream about being on such good terms with House Republicans. Though they were more coy in their support of the health reform law than PhRMA, lobbyists for the sector say, Republicans have been out for blood ever since.
House Republicans pushed an $18 billion package of cuts to hospital payments under Medicare last year in their bill to extend the payroll tax and suspend cuts to Medicare providers, though opposition from Senate Democrats and the White House forced these provisions out of the final deal.
They also pushed a measure that was widely seen as a poke in the eye of the American Hospital Association — loosening restrictions on physician-owned hospitals that would compete with AHA members. That provision didn’t make it into the final payroll tax deal either.
“I don’t understand it,” said one health lobbyist. Gunning for the hospitals while continuing to push PhRMA’s agenda, the lobbyist said, is “inconsistent with all the talk that you heard from the Republicans” about being mad at the trade group during the health reform debate.
PhRMA spokesman Matt Bennett declined to comment on whether Republicans are going easy on the industry. He maintains that Congress is moving PhRMA’s priorities based on their merits alone.
“I really don’t think it’s a political question,” Bennett said. “These are important policies that everyone agrees have to move forward.”
But several Capitol Hill and lobbying sources hinted that PhRMA’s mighty coffers might have a little something to do with it.
As one drug lobbyist put it, the industry “has the resources to get right with people once they’ve pissed them off.”
The pharmaceutical industry reported political spending of more than $30 million in the 2010 cycle, according to the Center for Responsive Politics — about 50 percent more than hospitals and nursing homes spent during that time. And its 2011 lobbying budget was more than twice that of hospitals and nursing homes, upward of $240 million.
These figures likely understate total expenditures since they don’t count funds spent on issue advertising or funneled through outside organizations like the Chamber of Commerce.
Drug makers have used that spending over many cycles to build goodwill with Republicans, generally giving more heavily to the GOP even in years in which hospitals have banked heavily for Democrats.
But money alone doesn’t explain PhRMA’s continued clout with the GOP. It helped that the group started distancing itself from its health reform deal even before the bill was passed.
The PhRMA president who negotiated the deal, former Republican Rep. Billy Tauzin, was ousted a month before the final bill was passed. Though sources familiar with the group’s inner workings say the board was largely dissatisfied with his poor management of the group’s staff, drug company leaders used his departure to assign blame for the deal, grumbling on background to several news outlets that he gave away too much. Tauzin did not return a call requesting comment for this story.
Though the board had signed off on the deal with the administration and had ample time to object, this stance was certainly convenient.
“They’re not going to gloat about [the agreement] because you don’t want to piss off House Republicans,” said the drug lobbyist.
But perhaps the biggest factor shielding PhRMA’s interests is that they line up so well with Republican free-market gospel that lawmakers would never back policies that would make them feel real pain. It also doesn’t hurt that key Democrats, like Senate Finance Committee Chairman Max Baucus (D-Mont.), are invested in protecting the industry’s health reform deal.
The shared interests are a major reason Republicans and drug makers are getting along so easily over the drug user fee bill. The bill sets the fees companies pay for the Food and Drug Administration to review new drugs and sets performance goals for the agency to turn around applications quickly.
Drug makers want the faster approvals made possible by the user fees, which underwrite the salaries of the staff who review applications. And the industry would scream bloody murder if Republicans interfered with the legislation to keep business running as usual.
Judging from how easily the bill is moving through Congress, there’s little chance of that.