Why Is Congress Giving Big Pharma a Pass?
Experts say the whole pharmaceutical industry should face Congress for drug price gouging, but Congress continues to give Big Pharma a pass thanks to millions of dollars spent on lobbying.
The U.S. Congress has had several CEOs in the hot seat lately–most notably and most recently, Mark Zuckerberg of Facebook. Joining Zuckerberg have been CEO Tim Sloan of Wells Fargo, CEO Richard Anderson of Amtrak and former CEO of Equifax Richard Smith.
An exception to this hunt is the rare sight of a Big Pharma CEO being hauled before Congress. With the exceptions of Mylan’s and Theranos’ appearances, along with Martin Shkreli who certainly felt the long arm of Congress after he hiked the price of his drug Daraprim by 5,000 percent, it seems that pharmaceutical companies have gotten a free pass from congressional testimony.
Why is Congress giving big pharma a pass?
We’d expect more pharmaceutical companies to be under scrutiny, particularly since, during his candidacy, Trump accused these companies of “getting away with murder,” pledging to bring drug prices down.
In the past, Congress has made a tradition of bringing in a steady parade of executives from a variety of industries including tobacco and banking. However, Congress says they haven’t really “had a need” to bring in pharmaceutical execs, with the exception of the above-named few.
Many healthcare watchdogs see this lack of scrutiny as a mistake, calling for more oversight of the industry. Many of these groups are also advocating for lower drug prices, and say that the only way to ensure this is to call CEOs before Congress and have them explain their business practices—if they can.
Congress has oversight responsibility on all industries, although the role is neither glamorous nor publicized, so watchdog groups continue to ramp up the public pressure to push to Congress pay attention where it’s needed.
Naturally, CEOs want to avoid appearing before Congress at all costs. They don’t want the embarrassing media attention, like when Senator Elizabeth Warren (D-Massachusetts), a former financial whiz herself, told Tim Sloan that he should be fired from the Wells Fargo CEO position. Needless to say, this kind of negative attention is bad for business.
For the CEO, there is absolutely no upside to dealing with Congress; they’d rather stay out of public view. Industry trade associations are usually responsible for performing this function. Experts are hired to communicate with Congress—it’s why members pay dues.
Big Pharma has such a trade association, called PhRMA, and they’re on Capitol Hill, a lot.
Members of the group frequently testify before Congress and join forces with related trade associations that represent physicians, hospitals and biotech. These trade industries typically testify on behalf of the whole industry, not just for one company. However, watchdog groups say the whole industry should be called out, particularly because they, as a whole, consistently rack up prices for services and products. Costs have climbed over 200 percent for at least 20 drugs in the past year. Another 20 drugs showed a 100 percent increase.
Yet, pharmaceutical companies continue to dodge the bullet by avoiding testimony and court appearances. Even companies that have been somewhat in the spotlight have managed to escape. For example, Allergan has been under fire for relocating its drug patent rights to a Native American tribe in order to avoid a legal battle. The House had a hearing but never called CEO Brent Saunders to appear.
The pharmaceutical industry works in complicated ways to avoid escalated situations. PhRMA and other lobbyists work tirelessly behind the scenes to keep CEOs away from Capitol Hill. They also spend millions–$25.4 million in 2017–on lobbying efforts and campaign donations. Drug makers gave about the same amount to congressmen in 2016. $50 million goes a long way when it comes to diverting the attention of curious congressmen.
Historically, Republicans are close allies with Big Pharma, another reason why CEO visits these days are few and far between. Minority members typically have a difficult time pushing their agenda. Since 2014, Bernie Sanders (I-Vermont) has pushed to bring drug company CEOs before Congress, but to no avail.
Typically, Congress must have a strategy in place ahead of time if they plan to call an executive to Capitol Hill. Without a viable solution to high prescription drug prices, a hearing isn’t likely anytime soon. Some Congressional critics say they don’t need any more testimony—Congress needs to act to write legislation that will lower drug prices to help American families.
If the midterms move in favor of the Democrats, and they retake either the House or the Senate, experts say drug CEOs are much more likely to be called to take responsibility for the gross escalation of what should be affordable treatment.