Health reform triggers analysis of the lobbying 'revolving door,' spending reports

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Oct 22 2009

A joint ProPublica/CBS News investigation found that at least two dozen current lobbyists used to be federal officials who helped design the last major change to American health care.

"Four years ago, a group of lawmakers and aides crafted Medicare Part D, the prescription drug program for seniors that has produced billions of dollars of profits for pharmaceutical companies," ProPublica reports. "Today, at least 25 of those key players are back, but this time they're lobbyists, trying to persuade their former colleagues to protect the lucrative system during the health care reform negotiations." Those "foot soldiers" include former Chairman of the House Energy and Commerce Committee Rep. Billy Tauzin, R-La., Former Sen. John Breaux, D-La., Former Sen. Don Nickles, R-Okla., and former Medicare chief Thomas Scully.

"Industry's interests prevailed when Part D was created in 2003," and "the prices the government pays for drugs through Part D are about 30 percent higher on average than the prices it pays for drugs for Medicaid recipients, according to a 2008 report by the House Committee on Oversight." The pharmaceutical industry is now trying to preserve those benefits and "fighting for its bottom line again. Its lobbyists are working against the House version of the health care reform bill, which would require drug companies to give up some of the windfall they gained as low-income seniors were transferred from Medicaid to Medicare during the Part D launch." During such negotiations, "[t]he skills of government workers turned lobbyists are invaluable to the pharmaceutical industry" (Pierce, 10/20).

CBS News reports that "[t]he so-called 'revolving door' is perfectly legal," but it "leads critics to ask whether some who are supposed to be watching out for taxpayers have other interests… One Congressional staffer who made the leap to the pharmaceutical industry after Medicare Part D told CBS News: 'every time a major bill passes, there is an exodus of Hill staffers. ... As long as ... ethics laws and rules are followed, why shouldn't they have that opportunity?'" The arrangement has benefited the pharmaceutical industry, which has "spent at least $18 million lobbying Congress on health care reform and, so far, has fought off two proposals that would cost it billions: allowing cheaper drugs to be imported from Canada, and lowering drug prices for some Medicare patients" (Attkisson, 10/20).

Meanwhile, The Washington Post reports: "The August recess did little to slow the Washington lobbying frenzy over health-care reform, as insurers, drugmakers and hospitals continued to spend millions to attempt to sway the emerging legislation, according to new disclosure reports filed with Congress. The Pharmaceutical Research and Manufacturers of America, the drugmakers' main trade group, shattered records again by spending nearly $7 million on lobbying from July through September, the quarterly disclosure records show. The outlay brings PhRMA's total so far this year to nearly $20 million, just shy of the group's entire lobbying budget for 2008" (Eggen, 10/21).

Roll Call: "America's Health Insurance Plans disclosed Tuesday that it spent $2.4 million in the third quarter of this year, up from $1.9 million in the second quarter and $2 million in the first quarter. In total, AHIP has spent $6.3 million in federal lobbying this year, according to its Lobbying Disclosure Act filings" (Ackley, 10/21).

In a second story, Roll Call reports that "despite the weak economy and President Barack Obama's barring of lobbyists from working in the executive branch, many of the nation's key industries and other interests continue to open their wallets in an effort to shape major and minor legislation. Driving much of the activity is the ambitious Congressional agenda that includes potential reforms of the health care system, proposed regulation of financial companies, union organizing and climate change legislation as well as traditional fights over lucrative defense projects" (Roth, 10/21).

This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.