Groups launch last-ditch effort against drug pricing changes

With reconciliation vote approaching, pharmaceuticals pour millions into ads against prescription drug provision

Nevada Democratic Sen. Catherine Cortez Masto went to the Senate floor this week to decry "misleading" ads in her state about the prescription drug provision. (Bill Clark/CQ Roll Call file photo)
Nevada Democratic Sen. Catherine Cortez Masto went to the Senate floor this week to decry "misleading" ads in her state about the prescription drug provision. (Bill Clark/CQ Roll Call file photo)
Posted July 29, 2022 at 11:46am

Special interest groups are hammering the airwaves in states like West Virginia, Nevada, Georgia, New Hampshire and the District of Columbia as the Senate closes in on passing legislation that would allow Medicare to demand lower prices for prescription drugs and cut into the profits of pharmaceutical companies.

The ads have become so ubiquitous in Nevada that Democratic Sen. Catherine Cortez Masto, who is in a tough fight for reelection, hit the Senate floor this week to defend her record and blast the organization airing them as "a dark money group” that accused her of supporting a bill that would lead to billions of dollars in cuts to Medicare.

“I was shocked when last week, hundreds of Nevadans began calling my office,” Cortez Masto said. “They were anxious and alarmed over a deliberately misleading ad that is running on TV, on Facebook and via a text campaign.”

Cortez Masto, who supports the drug pricing overhaul efforts, was referring to ads paid for by a group called American Prosperity Alliance, which has spent about $10 million on TV, radio and digital ads since the end of June, according to Federal Communications Commission filings.

The policies they are fighting against — included in a reconciliation package Senate Democrats hope to pass as soon as next week — would mark the most significant prescription drug legislation to clear Congress in 20 years. It would also represent a rare loss for the powerful pharmaceutical industry, which spends millions of dollars per year on lobbying and campaign contributions to influence policy.

It is not clear who is funding American Prosperity Alliance, which appears to be a new group that launched a bare-bones website June 30, according to the website’s source code. It lists no membership or other identifying information.

But FCC filings for the group name Parker Poling, a partner at Harbinger Strategies, as the group’s treasurer. Poling did not respond to multiple requests for comment. Poling is also a registered lobbyist for AmerisourceBergen, a pharmaceutical distribution company, and Genentech, a drug manufacturer.

Other groups, including Pharmaceutical Research and Manufacturers of America, the National Association of Manufacturers and a group called American Commitment have collectively spent millions of dollars on ads in July alone as part of a last-ditch effort to stop the reconciliation bill, which would fulfill Democrats’ decades-long promise to lift a restriction that bars Medicare from negotiating for lower prices on prescription drugs.

“We’re going to use every tool in the toolbox to relentlessly educate lawmakers about the flaws in this bill,” said Stephen Ubl, president of PhRMA, which launched an eight-figure ad campaign this month.

On Friday, American Commitment announced a "seven-figure initial ad buy" targeting the drug pricing provisions in West Virginia, Nevada, Georgia and the District of Columbia. The ads, which will run on cable, broadcast and digital mediums, accuse Democrats of cutting $300 billion from Medicare to “prop up Obamacare, fuel inflation and pad insurers’ profits.”

The bill would spend $64 billion to extend expiring health insurance subsidies through the end of 2025.

Meanwhile, the National Association of Manufacturers launched a six-figure TV ad campaign in Washington, D.C., warning against the bill.

PhRMA's ad, airing in D.C. and other states, argues that “government price-setting” would mean “fewer medicines” for Alzheimer’s, childhood diabetes, breast cancer and other diseases. 

The CBO estimated that the Senate drug pricing bill would lead to 15 fewer drug approvals over the next 30 years. The Food and Drug Administration approved an average of 38 new drugs per year from 2010 through 2019, according to the CBO. PhRMA, questioning the CBO’s methodology, argues that the bill would lead to far fewer drug approvals.

Those efforts might be fruitless. Similar legislation has already passed the House and looks poised to pass the Senate as soon as next week. It would need to pass the House again before being sent to President Joe Biden, who is expected to sign it into law.

Key Manchin priority

Sen. Joe Manchin III, D-W.Va., a key vote for Democrats in the 50-50 Senate who has also been the target of some of the ads, has vacillated on what he is willing to support. But he has consistently focused much of his enthusiasm on the drug pricing provisions. At one point during the lengthy ongoing negotiations, drug pricing was one of the few things he was willing to do.

"I said, 'Chuck, the one thing that we can do today, tomorrow, anytime, is the reduction of the Medicare drug prices,'" Manchin said Thursday, recounting conversations with Senate Majority Leader Charles E. Schumer, D-N.Y. "We're reducing drug prices for Americans across the board in Medicare, so I think it's a win-win here."

Manchin this week announced that he now supports climate and tax provisions as well as health provisions in the reconciliation bill. 

The drug pricing provision, which would target the highest-cost drugs for negotiation by the government, would save Medicare about $288 billion through 2031, according to the Congressional Budget Office.

It would also penalize drug companies for raising prices faster than the rate of inflation beginning in 2023 and cap out-of-pocket drug costs for seniors.

Patients for Affordable Drugs Now, which supports the reconciliation bill, has tallied at least $16 million in July alone on TV and radio ads against the drug pricing provisions in the reconciliation bill. Many of the groups have been airing ads for about a year now.

“The spending went up dramatically here in this last month as we move toward a vote,” said David Mitchell, president and founder of the group. “Here we are in the closing days of this fight, and it appears that pharma will say anything, lie, mislead people, scare people, to protect its power over us."

The ads appear to be targeting senators who are running competitive reelection campaigns this year, including Cortez Masto, Maggie Hassan D-N.H., and Raphael Warnock, D-Ga.  

American Prosperity Alliance started airing ads in those states, West Virginia and D.C. at the end of June and beginning of July, and has more ad blitzes prepared for August, according to a review of FCC filings. None of those senators has publicly questioned the bill, and all appear to strongly support it.

Some groups have run their own ads countering the drug industry’s campaign. AARP has spent $23 million on ads from 2021 through 2022, including $16 million in the past seven months alone. It recently announced a $1 million ad buy to run on D.C.-area cable channels from July 1 through Aug. 5.

“This is the biggest prescription drug bill that will pass in 20 years,” said Bill Sweeney, senior vice president of government for AARP. “Nobody wants to pay more money for drugs. It’s an amazing feat of mental gymnastics to go up on TV and argue that it’s wrong to lower seniors’ drug costs. So we are up on the air setting the record straight."