Pharma loses vaccine IP battle despite record Q1 lobbying

This article was updated May 5. 

Despite spending a record-breaking $92 million to lobby the federal government in the first three months of 2021, pharmaceutical interests suffered a major loss on Wednesday when President Joe Biden announced that the U.S. will support some countries’ efforts to waive intellectual property protections on COVID-19 vaccines. 

The industry’s spending in the first three months of 2021 represents a 6.3 percent increase over the same time period last year, putting drug companies on track to break their combined all-time spending record for the second year in a row. Private manufacturers of pharmaceuticals and health products typically far outspend other industries to lobby Washington. In 2021, the industry has already spent more than double the sum spent by the second highest-spending industry.

The Pharmaceutical Research and Manufacturers of America, the nation’s largest pharmaceutical trade association, is perennially the industry’s largest lobbying spender and this year is no exception. So far, the association has spent $8.7 million on K Street. Industry giant and leading COVID vaccine manufacturer Pfizer rang in as the No. 2 lobbying client, spending $3.7 million. The company reported Tuesday that it raked in $3.5 billion in profits from sales of the vaccine during the first three months of 2021 alone.  

PhRMA and Pfizer both lobbied hard against the WTO waiver, which PhRMA said could “create confusion” and “undermine public confidence in vaccine safety.” The U.S. Chamber of Commerce — the top overall lobbying spender in 2021 — also opposed the waiver. 

“In the midst of a deadly pandemic, the Biden Administration has taken an unprecedented step that will undermine our global response to the pandemic and compromise safety. This decision will sow confusion between public and private partners, further weaken already strained supply chains and foster the proliferation of counterfeit vaccines,” said PhRMA president Stephen Ubl in a statement.

South Africa and India, two countries where coronavirus infections continue to surge, brought the patent waiver proposal to the World Trade Organization in March. More than 170 former heads of state and Nobel prize winners from around the world called on Biden to “provide an example of responsible leadership at a time when it is needed most on global health” in an open letter. Democratic lawmakers also urged the president to support the measure.  

“It is unconscionable that amid a global health crisis, huge multi-billion dollar pharmaceutical companies continue to prioritize profits by protecting their monopolies and driving up prices rather than prioritizing the lives of people everywhere, including in the Global South,” Sen. Bernie Sanders (I-Vt.) said in a video statement.

According to the United Nations, low-income countries have administered just 0.2 percent of the global supply of vaccine doses so far. 

“The Administration believes strongly in intellectual property protections, but in service of ending this pandemic, supports the waiver of those protections for COVID-19 vaccines. We will actively participate in text-based negotiations at the World Trade Organization needed to make that happen,” said Katherine Tai, the U.S. ambassador to the WTO, in a statement announcing the decision.

Lobbying ramps up against Democrats’ drug pricing plan 

House Democrats introduced a bill, H.R. 3, that would give Medicare the ability to negotiate drug prices with manufacturers and cap out-of-pocket spending for medication at $2,000. The bill is not expected to surpass the 60-vote threshold necessary to survive a Republican filibuster in the Senate, and prominent Democrats are reportedly planning to attach H.R. 3 to Biden’s sweeping American Families Plan in order to push the proposed change through during the reconciliation period. 

Though Biden did not include Medicare expansion or drug pricing regulations in the original draft of the American Families Plan, the president highlighted his support for policies to bring down the price of prescription drugs as a part of his first joint address to Congress. 

“Let’s give Medicare the power to save hundreds of billions of dollars by negotiating lower prices for prescription drugs,” Biden said. “That won’t just help people on Medicare – it will lower prescription drug costs for everyone.”  

Ubl laid out the association’s opposition to H.R. 3, suggesting that it could make it harder for Americans to access critical medication, in an April 22 statement. 

“It will also destroy an estimated one million American jobs, cede our leadership in life sciences, and stifle the development of new treatments, while failing to address the broader challenges facing patients,” Ubl said. “It’s unfortunate House leaders are reintroducing this partisan bill, particularly as we continue to fight a pandemic.” 

According to the Congressional Budget Office, the government could save more than $450 billion in drug purchases over the next decade if the provisions become law. However, the CBO also projects that H.R. 3 could lead drug companies to produce new drugs at a slightly slower rate.   

Under current law, Medicare is required to pay for certain medications, no matter their cost. This allows drug companies to raise prices on critical drugs. Previous efforts to alter this rule failed during the administrations of former presidents Barack Obama and Donald Trump following extensive lobbying efforts by the pharmaceutical industry.