How Big Pharma Invests in the Status Quo

It’s cool how so much of the money and favor-trading that goes on in Washington—between politicians, their associates, lobbyists, industry groups, and various power-players—happens in the dark, either never to be disclosed or disclosed so late that it’s offensive they bother to do it at all. It’s extremely dope that, for example, the trade group representing pharmaceutical companies can donate $2.5 million to a nonprofit that exists to spend millions on promoting Donald Trump’s agenda and allies all without anyone knowing they did that until almost the end of the next year. This is extremely good, to me.

Capital & Main’s David Sirota reported yesterday that the Pharmaceutical Research and Manufacturers of America (PhRMA) donated $2.5 million to America First Policies at some point in 2017, as revealed in an IRS disclosure form obtained by MapLight’s Andrew Perez. They also donated $1.5 million to American Action Network, the non-profit arm of the Congressional Leadership Fund, the main super PAC supporting Republicans in Congress. PhRMA donated $6 million to AAN in 2016. It is heavily invested in the Republican Party. It is all the way in on this fun experiment in what happens when hyper-capitalism joins hands with racism and a culture war-obsessed old man with pudding for brains.

As Sirota noted, the tax cuts that America First Policies spent $1 million pushing (plus another $500,000 to “thank” senators who voted for it) greatly benefited the pharmaceutical industry. Axios reported in October that the tax bill “rerouted billions of dollars from the federal treasury into the bank accounts of health care companies and Wall Street investors.” Pharmaceutical company Bristol-Myers Squibb saved $463 million, for example.

Pharmaceutical companies are extremely profitable, even without generous help from a class warfare tax bill. It was also reported this week that 63 percent of total healthcare industry profits last quarter went to pharma companies, despite only collecting 23 percent of the revenue. Pfizer had a third quarter profit of $4.1 billion; its effective tax rate was 1.6 percent.

Profit is a simple calculation. To make a profit, you must sell the thing you are making for more than you spent to make it. This is what pharmaceutical companies do. They invent drugs, which costs them money, but they also use publicly-funded research to help save on those R&D costs—a 2018 study found public funding from the National Institutes of Health “was associated directly or indirectly with every drug approved from 2010–2016.” After they invent the drugs, they sell them for astronomical prices, as high as they can get away with. Hence, massive profit.

But it’s more than that. To keep profiting off the thing they made, they have to make sure no one else can make it cheaper. So they work to keep generic drugs off the market to allow them to keep charging high prices for brand name drugs. Sometimes they literally pay generics manufacturers not to sell the same drug for less. Sometimes they allegedly collude to fix prices, according to a lawsuit filed by 45 states and the Department of Justice. And often they abuse the patent system to keep generics off the market entirely, sometimes for years. Those are three ways pharma companies abuse the rules and all sense of common decency to make profit, and I didn’t even bring up opioids, drug advertisements that push patients to ask for drugs they might not need (and paying doctors to push patients to take certain drugs), and influencing clinical trials to push drugs that might not even work.

Pharmaceutical companies did not become so profitable through hard work, ingenuity, and that gosh darn American spirit. They became so profitable by having absolutely no moral qualms about creating a system in which profit, not need, determines who gets what drugs. And they know that to keep this absurd arrangement alive and well, they have to spend vast amounts—though compared to their profits, it’s hardly vast at all—to butter up those in power. (Do not be fooled by the Trump administration’s meager efforts to tinker around the edges of our current, absurd drug pricing regime. PhRMA would not devote money to supporting Trump if they thought there was any real threat from his administration. It is that simple.)

You can see from the first page of the 990 that Perez posted on Twitter that PhRMA’s investment in conservative Washington goes beyond supporting the racist president’s shitty dark money group. They donated $75,000 to the American Enterprise Institute, a conservative think tank; $150,000 to the American Conservative Union, which hosts CPAC every year; $75,000 to American Commitment, a small non-profit with ties to the Koch brothers; and $75,000 to the American Action Forum, the “policy” arm on the American Action Network. They also gave $1 million to a group that seeks to help Republicans gerrymander, and $1.2 million to a centrist Blue Dog group that no one cares about, according to Kaiser Health News’ Jay Hancock. It is hard to imagine a more blatant investment in the Republican status quo than investing in their redistricting group.

They sprinkle this money around to all the hungry little conservative piggies in DC, who gobble up the delicious treats gratefully and expend those calories as righteous, furious efforts to uphold their values. They fight to enact tax bills that save their paydaddies a couple million here and there, to shape the discourse in such a way that “pharmaceutical companies sue each other prevent cheap generics from reaching patients” is just how things are, but “healthcare is a human right” is ridiculous, outrageous, evidence of great naiveté and suspiciously Communist.

PhRMA has millions and millions to spend doing this, and they’ll have millions and millions more to spend to fight Medicare for All. Just remember who they’re paying, when the time comes.