Industry Blog

13
Feb 10

Obama fails to turn back lobbying cash tide.

Barack Obama swept into the White House on the back of a promise to rein in the pervasive influence of lobbyists in government.

But an analysis of lobbying records released yesterday shows that corporations spent more money than ever lobbying members of Congress in 2009, even amid the worst recession in decades.

According to the Center for Responsive Politics, corporations and other interest groups spent a total of $3.47bn (€2.55bn, £2.21bn) on federal lobbyists last year, a 5 per cent increase from 2008, which broke all previous records.

The lobbying frenzy peaked in the fourth quarter of 2009, which hit a record of $955m spent, just as negotiations over the now stalled healthcare reform supported by the Obama administration were ramped up on Capitol Hill.

“Lobbying appears recession-proof,” said Sheila Krumholz, executive director of the Center. “Even when companies are scaling back other operations, many view lobbying as a critical tool in protecting their future interests.”

The pharmaceutical and health products industry broke all records by spending $267m last year, in what the Center’s analysts said was the “greatest amount ever spent on lobbying efforts by a single industry for one year”.

Not all of those funds were spent rallying against healthcare, however. The pharmaceutical industry’s main lobby group, the Pharmaceutical Research and Manufacturers of America (PhRMA) spent $26m lobbying in favour of healthcare reform after it negotiated an $80bn deal with the Senate and White House last summer that critics said was a gift to the industry.

The chief negotiator of that deal, former congressman Billy Tauzin, yesterday announced his resignation as president of the trade group. Mr Tauzin, who has run the association since 2005, said he would formally step down in June.

http://www.ft.com/cms/s/0/11f99a48-183c-11df-9256-00144feab49a.html

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4
Jul 09

Pharmaceutical Industry Lobbying Efforts

The pharmaceutical industry, which has long invested heavily in federal lobbying, is now on course to smash its previous records as it tries to shape the health care overhaul pushed forward by Democrats.

The industry is increasingly employing Democratic lobbyists with ties to the Obama administration and congressional leaders such as Sen. Max Baucus , D-Mont., chairman of the Senate Finance Committee. A few years ago, when Republicans controlled Congress and the White House, industry representatives were solidly allied with the GOP.

Such efforts might be having an effect.

The pharmaceutical  industry sealed a deal recently with Baucus to offer $80 billion in drug discounts for seniors as part of Medicare. The agreement might preempt efforts by liberal Democrats to seek even deeper concessions from the drug industry. The drug companies have opposed a government health insurance component that President Obama and more liberal Democrats are seeking, a provision that could lead to more control over drug prices.

Robert Blendon, professor of health policy and political analysis at Harvard University, said that drug companies have been “smart and savvy” in their dealings with Congress.

“Their involvement gets them a seat at the table,” he said.

www.cqpolitics.com

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23
Jun 09

Manufacturers avoid worst.

The pharmaceutical industry has headed off the threat of more onerous imposed cost savings by stepping up to the plate on healthcare reform in the all-important U.S. market.

A weekend deal, announced by President Barack Obama, offering some $80 billion in prescription discounts over 10 years to help elderly Americans afford drugs will crimp profits, but the figure is a less than initially feared.
“Negotiations began with government asking for $130 billion, so $80 billion would represent a relatively benign outcome,” said Savvas Neophytou, an analyst at Panmure Gordon. What’s more, the plan agreed with Senate Finance Committee Chairman Max Baucus, with the backing of the Obama administration, means concessions will be funnelled in an area that could generate additional sales volume.
Drugmakers have agreed to provide a 50 percent discount for those elderly and disabled Americans in the Medicare health insurance program who face a gap in coverage after their drug costs reach a certain level, known as the “doughnut hole”.
“Roughly 20-25 percent of Medicare D patients reach the doughnut hole, and the majority of them either stop or switch their medications,” Deutsche Bank analyst Barbara Ryan said in a research note.
“Therefore, pharma may be providing discounts for branded drugs which will primarily represent incremental demand.”
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22
Jun 09

Obama To Formally Announce Medicare Drug Cuts Today.

The pharmaceutical industry agreed Saturday to reduce Medicare drug costs as part of health overhaul in an apparent effort to stave off potentially more-burdensome givebacks under the Democrats’ health-overhaul plan. Today, President Barack Obama will make a formal announcement about the deal.

The Wall Street Journal reports: “Drug makers on Saturday outlined a proposal to forgo $80 billion in revenue over a decade, largely by covering more of the cost of brand-name prescription drugs under the federal government program for seniors. It would make up part of the $313 billion in government health-spending cuts that President Barack Obama has proposed over a decade to help pay for the overhaul plan. … The agreement is the latest in a series of cost-cutting deals the government has made with insurance companies, doctors, hospitals and medical-device manufacturers as it seeks to find ways to pay for proposed changes to the health-care system, including expanding insurance coverage to 46 million uninsured Americans.”

kaiserhealthnews.org

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16
Jun 09

Hospitals oppose Obama’s Medicare, Medicaid cuts

Obama said high health care costs hurt the entire economy and contribute to the nearly 50 million people who lack coverage. His address focused on payments to Medicare and Medicaid, which cover millions of elderly and low-income people and involve thousands of doctors, hospitals, nursing homes and other institutions.

He proposed cutting $313 billion from the programs over 10 years. That’s in addition to the $635 billion “down payment” in tax increases and spending cuts in the health care system that he announced earlier.

Together, Obama’s plans would provide $948 billion over a decade in savings and/or tax increases to help insure practically everyone and to slow the rate of soaring health care costs.

The president wants to cut $106 billion over 10 years from payments that help hospitals treat uninsured people. Spending on Medicare prescription drugs would fall by $75 billion over a decade.

And slowing projected increases in Medicare payments to hospitals and other providers — but not doctors — would save $110 billion over 10 years, the president said.

Obama called them “commonsense changes,” although he acknowledged that many details must be resolved. Some powerful industry groups called the proposals unwise and unfair.

“Payment cuts are not reform,” Rich Umbdenstock, president of the American Hospital Association, said even before Obama’s plan was announced. His group is urging hospitals with large proportions of low-income patients “to push back on proposed cuts.”

The pharmaceutical industry is wary of Obama’s plan to extract $75 billion over 10 years from Medicare prescription drug spending. The White House said “there are a variety of ways to achieve this goal.” For instance, it said, drug reimbursements might be reduced for people who receive both Medicare and Medicaid.

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