Justin Im

PHPM310

Assignment 6A

19 April 2018

Word Count: 458

PhRMA and the ACA

In 2009, Congress sought out to reform the nation’s healthcare system. With many

questions as to how this would affect those in the industry, many players, including doctors,

hospitals, payers and providers alike, form interest groups to lobby on their behalf. This is the

basis of the interest group theory; a theory that believes many different interests compete to

control government policy. The Pharmaceutical Research and Manufacturers of America, or

PhRMA, is one of the biggest and most influential special interest groups advocating on the

behalf of pharmaceutical and biotechnology companies.

PhRMA, which is made up mostly of current and former pharmaceutical executives,

lobbied for legislation that would be favorable to the industry. The special interest group made

sure to keep the reimportation ban in place, making it illegal to import pharmaceutical products

from countries like Canada.1 They also made sure that the government would not be allowed to

negotiate drug prices.2 Both of these initiatives were clear wins for the pharmaceutical and

biotechnology lobby. They were also able to get twelve years of patent protection on biologics

despite the best efforts made by Henry Waxman, an influential chairman of the House Energy

and Commerce Committee, that staunchly fought for zero years of patent protection.3

However, the negotiations weren’t always one-sided. Congress was able to successfully

negotiate a payment from the pharmaceutical companies to the tune of $90 billion. This money

would go directly to fund the expansion of the ACA. Billy Tauzin, a former House Representative

(R) and CEO of PhRMA from 2005-2010, explained that it was better for them to make a deal

and stave off the possibility of a single-payer system or a public option.4 Even this large, lump-
sum payment proved to be beneficial to the pharmaceutical companies. The companies

understood that expanded coverage was beneficial to their bottom line. More coverage meant

more potential customers.

In my opinion, I believe PhRMA and the companies it represents, definitely came out as

winners of the ACA. Using their large clout and scale, they were able to successfully lobby for

legislation that gave them favorable terms while nixing legislation that would be harmful to their

bottom line. While PhRMA was far from being the only special interest group to win favorable

terms, I would argue that they benefited more than any other interest group. They were able to

successfully negotiate for twelve years of protection on their drugs, while also banning the

importation of pharmaceuticals and banning the government from negotiating lower drug prices.

All key pieces of legislation that help the drug companies keep their monopoly-like prices with

very little to no competition.

 References

1. Norman B, KARLIN-SMITH SARAH, Pradhan R, et al. The one that got away:

Obamacare and the drug industry. POLITICO.

https://www.politico.com/story/2016/07/obamacare-prescription-drugs-pharma-225444.

Published July 13, 2016. Accessed April 19, 2018.

2. Berwick DM. The Toxic Politics of Health Care. JAMA. 2013;310(18):1921–1922.

doi:10.1001/jama.2013.281965

3. Japsen B. Obamacare Will Bring Drug Industry $35 Billion In Profits. Forbes.

https://www.forbes.com/sites/brucejapsen/2013/05/25/obamacare-will-bring-drug-

industry-35-billion-in-profits/#62a9367434a5. Published May 25, 2013. Accessed April

19, 2018.

4. David D. Kirkpatrick and Duff Wilson. One Deal Too Many Costs Billy Tauzin His Job.

The New York Times. https://www.nytimes.com/2010/02/13/health/policy/13pharm.html.

Published February 12, 2010. Accessed April 19, 2018.