PBMs, under fire from the Trump administration, spend a record sum on lobbying

DATE: April 23, 2019

Published by STAT News

Lobbying disclosures filed on Monday revealed a flurry of pharmaceutical industry activity, including the largest-ever expenditure for the trade group representing pharmacy benefit managers.

The Pharmaceutical Care Management Association spent a record-breaking $1.49 million on lobbying in the first quarter of 2019, the most it has ever spent in a three-month span, according to a STAT analysis of the latest lobbying disclosures. The all-time record comes as the lobbying organization is vocally opposing a Trump administration proposal to ban certain rebates from drug companies to PBMs that could fundamentally threaten the industry’s business model.

Congress, too, has stepped up its scrutiny of the industry in recent months, and even dragged industry heads to testify at a pair of high-profile hearings earlier this month.

At one, Rep. John Sarbanes (D-Md.) told executives: “Just to get the lobbyists in the room to shudder a little bit, I think the PBMs should be utilities, or converted to nonprofits, or something.”

PCMA did not immediately comment on the record-setting spend.

Meanwhile, the drug manufacturer trade group PhRMA spent $9.91 million on lobbying in the first quarter of 2019 — a sum that paid for 20 outside lobbying firms and 27 in-house lobbyists.

That figure is a bit shy of the $9.96 million the group dropped in the same three-month span last year. PhRMA spent $6 million on federal advocacy in the fourth quarter of 2018, lobbying on a slate of issues including the Trump administration’s idea to peg what Medicare pays for drugs to what other countries pay and a policy related to a Medicare coverage gap known as the donut hole.

Like PBMs, drug manufacturers this year have also been forced to tailor their advocacy efforts to the bipartisan ire of Capitol Hill. In February, the Senate Finance Committee called seven executives from major drug manufacturers to testify — the first such appearance from major drug industry figures in decades.

Monday’s filing shows PhRMA also became a launch client for Marshall and Popp, a firm founded by a pair of recent Capitol Hill alumni: former aides to Sens. Mitch McConnell and John Cornyn, who last year were the Senate’s first- and second-ranking Republicans, respectively.

One of PhRMA’s newest member companies spent big as well. The Bay Area drug giant Genentech spent $2.95 million in its first quarter since joining the advocacy organization, compared to $1.16 million for the same period last year. Genentech has never spent more than $1.8 million on lobbying in a single quarter, according to disclosures dating back to 1999.

PhRMA also announced in January it would add Gilead, another Northern California manufacturer, to its ranks. The dual additions are likely to add to the trade group’s revenues and overall D.C. clout.

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