Pharmaceutical Group Chiefs March to Individual Beats
The announcement that Rep. W.J. “Billy” Tauzin will become the president of the Pharmaceutical Research and Manufacturers of America, perhaps the single most powerful lobby on Capitol Hill, has already launched the predictable lament-a-thon among the hand-wringing classes. And no wonder. Just a year or so ago, Tauzin (R-La.), as the lead architect of the new Medicare prescription drug benefit, carried the industry’s water, making sure the bill contained an important provision banning the government from using its mass purchasing power to negotiate lower drug prices. Now, ensconced in his new $2-million-a-year job, Tauzin will be able to make sure that PhRMA and its member companies continue to get what they want.
But what PhRMA chiefs do -- and how it really affects consumers -- is not always so predictable. The tack they take often flows from individual political beliefs as much as from political connections and industry obligations.
Consider Lewis Engman, who headed the trade group from 1980 to 1984. Engman, a former Federal Trade Commission chief under Richard Nixon, was brought in to protect the brand-name drug industry against the threat of legislation that would make generics easier to bring to market. But Engman, a Rockefeller Republican with a strong belief in free markets, privately viewed such industry stances as anti-competitive and anti-consumer. At peril to himself (he eventually was fired), Engman brought the brand-name companies to the negotiating table and got them to agree to support the Hatch-Waxman bill, which set up a system at the Food and Drug Administration for approving generic drugs. Such drugs have since wrought a multibillion-dollar reduction in prescription costs.
Engman’s successor, Reaganite Jerry Mossinghoff, was by contrast hostile to just about any type of regulation and pushed a more traditional agenda. Yet it was under Mossinghoff, an owlish former patent commissioner, that PhRMA finally coaxed its membership into action on fast-tracking AIDS drugs. Mossinghoff saw that such a move would solidify the industry’s reputation with newly emerging politically powerful patient-advocacy groups.
Alan Holmer, who succeeded Mossinghoff and who is now on his way out, was also a Reaganite. In his tenure at PhRMA, a predictable anti-regulatory bent has held sway, but many believe that Holmer’s legacy will involve only one thing: money. Holmer cemented the industry’s political future to the GOP, switching from bipartisan giving to an all-Republican strategy.
Yet even that may have had pro-consumer consequences, making it impossible for PhRMA to take its usual blanket stand against a Medicare drug benefit. The result, as flawed as it may be, is that the government is now in the business of helping people pay for their medicine. (One un-ballyhooed feature of the Medicare bill, already lamented in the halls of the industry, is its requirement for pharmacists to inform patients when a generic is available.)
In all of this, says Nancy Taylor, a longtime Washington attorney for the drug industry, there is a pattern. “It is an intensely political job inside the trade group itself,” she said. “And what you tend to see is that every time there is a major piece of legislation, the leadership changes. Even when it gets what it wants.” Because, the Beltway assumption runs, one can never get everything one wants.
Why so cutthroat? These days, says Taylor, the executive membership of PhRMA -- all CEOs of major pharmaceutical companies -- comes from marketing and sales; they’re not scientists. They want bottom-line results.
Just what results they will demand -- and get -- from Tauzin is of course a matter of great speculation. But the fact that Tauzin, a Southern Democrat turned Republican, recently recovered from stomach cancer will probably affect his political proclivities and perhaps his PhRMA agenda. He has already gone on record as saying: “This industry understands it’s got a problem. It has to earn the trust and confidence of consumers again.”
