News & Politics

Pharma Giant Gets Cozy With Congress, Spends $100 Million in Advertising to Cash in on Health Reform

Last year PhRMA was employing 165 lobbyists; 137 of whom were former employees of the legislative or executive branches.

More than a million spectators gathered before the Capitol on a frosty January afternoon to witness the inauguration of Barack Obama, who promised in his campaign to change Washington’s mercenary culture of lobbyists, special interest influence and backroom deals. But within a few months of being sworn in, the President and his top aides were sitting down with leaders from the pharmaceutical industry to hash out a deal that they thought would make health care reform possible.

Over the following months, pharmaceutical industry lobbyists and executives met with top White House aides dozens of times to hammer out a deal that would secure industry support for the administration’s health care reform agenda in exchange for the White House abandoning key elements of the president’s promises to reform the pharmaceutical industry. They flooded Congress with campaign contributions, and hired dozens of former Capitol Hill insiders to push their case. How they did it—pieced together from news accounts, disclosure forms including lobbying reports and Federal Election Commission records, White House visitor logs and the schedule Sen. Max Baucus releases voluntarily—is a testament to how ingrained the grip of special interests remains in Washington.

In the 2008 campaign, Obama declared his intention to include all stakeholders as he sought to reform the nation’s health care system, but also supported key Democratic health reform policies. Among these were several that targeted the pharmaceutical industry: Allowing re-importation of drugs from first world countries with lower drug prices and providing Medicare with negotiating authority over prescription drug prices in the recently enacted Part D program. These weren’t just promises, Obama had already voted for both of them as a senator in 2007. (Roll Call Vote 132 and Roll Call Vote 150.)

Set to carry out this agenda were two Capitol Hill veterans, schooled in the monied Washington culture, chief of staff Rahm Emanuel and deputy chief of staff Jim Messina. Emanuel was a former fundraiser, Clinton administration official, investment banker and member of the Democratic leadership in Congress. Messina was the former campaign manager and chief of staff to the powerful Senate Finance Committee chairman Max Baucus. Both were known for their unparalleled legislative abilities.

Because of Obama’s decision to develop a plan operating through the legislative process, members of Congress also played key roles. Early on, the pharmaceutical companies were told to deal directly with Senate Finance Committee chairman Max Baucus. Baucus would be the vehicle for the deal worked out behind the scenes by the White House and PhRMA.

Central to this effort was PhRMA president, CEO and top lobbyist Billy Tauzin, a longtime Democratic member of Congress who switched party affiliations after Republicans gained control of Congress in 1994. By switching parties Tauzin was able to maintain his influence and even rose to be Chairman of the House Committee on Energy & Commerce. Tauzin became the poster child of Washington’s mercenary culture. He crafted a bill to provide prescription drug access to Medicare recipients, one that provided major concessions to the pharmaceutical industry. Medicare would not be able to negotiate for lower prescription drug costs and reimportation of drugs from first world countries would not be allowed. A few months after the bill passed, Tauzin announced that he was retiring from Congress and would be taking a job helming PhRMA for a salary of $2 million.

Tauzin’s job change became fodder for a campaign ad that then presidential candidate Barack Obama ran in the spring of 2008 simply titled “Billy.” It featured the candidate, sleeves rolled up, talking to a salon of gasping Americans about the ways of Washington. “The pharmaceutical industry wrote into the prescription drug plan that Medicare could not negotiate with drug companies. And you know what, the chairman of the committee, who pushed the law through, went to work for the pharmaceutical industry making $2 million a year.” The screen fades to black to inform the viewer that, “Barack Obama is the only candidate who refuses Washington lobbyist money,” while the candidate continues his lecture, “Imagine that. That’s an example of the same old game playing in Washington. You know, I don’t want to learn how to play the game better, I want to put an end to the game playing.”

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Paul Blumenthal is the senior writer at the Sunlight Foundation.