June 9, 2021
WASHINGTON — State lawmakers in Oregon have tried to lower high drug prices from nearly every angle: They’ve sought to cap how much people can pay for insulin, install a panel that could determine how much state agencies should pay for medicines, and even import drugs in bulk from Canada. Nearly every proposal has failed.
One reason, at least according to the effort’s supporters: Two-thirds of the state legislature accepted at least one campaign check from the drug industry during the 2020 election cycle. The trade group PhRMA, alone, wrote checks to 43 of the legislature’s 90 lawmakers.
It was even more dramatic in Louisiana, where 84% of lawmakers accepted funding from pharmaceutical companies. In California, it was 82%, and in Illinois, 76% of legislators cashed a check.
“It’s gross,” said Rachel Prusak, a Democratic state representative in Oregon who has introduced a number of drug pricing bills. “I’m sure it influences other people that take a lot of money. That’s why we can’t get bills passed.”
The same dynamic has played out in nearly every state across the country. In the last two years, at least 2,467 state legislators — over one-third of all state lawmakers nationwide — used pharmaceutical industry cash to fund their campaigns, according to a new STAT analysis of campaign finance records that spans the full 2020 election cycle. The industry wrote over 10,000 individual checks totaling more than $9 million.
STAT’s findings provide an unprecedented look at drug industry influence in state capitols across the 2020 election cycle. The dataset includes the largest 23 U.S. drug manufacturers by revenue plus the trade groups PhRMA and BIO. It builds upon a previous analysis that STAT published prior to the election, and now includes complete data from nearly every state, including all contributions made through Dec. 31, 2020.
The analysis accompanies a separate review of donations to members of Congress. For both projects, readers can browse interactive maps that chart drug companies’ donations to states, political parties, and lawmakers.
It’s hard to compare the drug industry’s spending in the 2020 election to past election cycles, since similar analyses don’t exist. But it’s clear that pharmaceutical companies found themselves in an unprecedented political moment: At the start of the cycle, widespread and increasingly vocal animus over high drug prices spurred a slew of aggressive new policy proposals.
Then the Covid-19 crisis plunged the drug industry into a vaccine race that overhauled both its priorities and its reputation writ large. But there’s still plenty of pressure on lawmakers to help consumers save money on medicine, advocates insist.
“Pharma is fighting us hard in any way that they can: By campaign contributions, by lobbying, whatever angle they can get to gain a foothold,” said Maribeth Guarino, a health care advocate for the Oregon State Public Interest Research Group, a nonprofit. “Oregon has no contribution limits for campaigns. Pharmaceutical companies can spend as much as they think it’ll take to win.”
In state legislatures, a small corporate contribution can go a long way. While a member of Congress might view a $2,500 PAC check as largely symbolic, in a competitive local race, the same money can help to fund TV ads, T-shirts, and lawn signs, and by extension, win votes.
Even Prusak, the Oregon lawmaker who is outspoken on drug pricing issues, accepted two $1,000 contributions as she campaigned for reelection in 2020: One from Gilead Sciences and another from Genentech.
Prusak, a nurse practitioner, was unaware of Genentech’s contribution, but said that often, lawmakers or their aides cash checks without much thought. Overall, her colleagues in Oregon received an outsize share of pharmaceutical cash: The drug industry gave more money to state legislative races in Oregon than it did for elections in any state besides California and Illinois.
If drug companies continue to oppose her price-transparency bill, however, she said she would take a tougher line.
“I will have to make the decision: I’m not taking pharma money,” she said. “If it ends up landing in my path, I can send it back. And some people would say: ‘That’s stupid, Rachel. You should take their money. You’re never going to vote with them.’ But it’s a statement, right?”
Many lawmakers raked in far larger sums. Chad Mayes, formerly the California State Assembly’s top Republican and now a political independent, accepted $79,600 from drug companies — the most of any lawmaker in the country. Three state Democrats in the California Assembly were close behind, having cashed between $65,000 and $75,000 in total.
One Oregon lawmaker, Tim Knopp, cashed the cycle’s biggest contribution from a drug company: a $25,000 check from the trade group PhRMA. Knopp is the vice-chair of the Oregon Senate’s health care committee.
In most cases nationally, the drug industry donated to politicians running for reelection, and avoided supporting candidates who were challenging incumbents. Such practices are typical for corporate campaign donors, who often see the checks as helping to build relationships and secure access to people currently in power.
Still, drug companies were adept at picking winners. Of the more than $9 million the pharmaceutical industry spent on state legislative races, less than $500,000 went to candidates who lost. Most of the money helped to fund winning reelection campaigns, though $1.8 million went to candidates who retired instead of running again in 2019 or 2020.
STAT’s examination sheds additional light on companies’ donation strategy. The vast majority of checks were written in short stretch immediately before Election Day. In the three months prior to Nov. 3, the 25 industry groups included in the analysis cut 3,688 individual checks to candidates across the country — representing more than a third of their total for the cycle.
Pfizer, the New York-based drug giant that led the charge on Covid-19 vaccine development, was by far the most prolific contributor to state campaigns. Its PAC managers and representatives penned checks to 1,048 individual lawmakers and candidates in 43 different states. It’s no surprise: The company has also long been one of the most generous political givers at the federal level.
The donations are “part of our overall efforts to advance public policies that support the health needs of the patients we serve,” Sharon Castillo, a Pfizer spokesperson, said in a statement. “Even during our important work for the development of a safe and effective Covid-19 vaccine, we remained laser-focused on advocating for state laws that support scientific innovation and lower out-of-pocket costs.”
PhRMA, the D.C.-based trade group, contributed to only 805 lawmakers and candidates, but spent more overall: $1.58 million, the most of any drug industry group.
PhRMA spokesperson Brian Newell said in a statement that the industry was monitoring more than 200 state legislative proposals in 44 different states, as well as another 220 bills in Washington — all of which would impact biopharma companies on everything from affordability to workforce development.
“It’s no surprise then that we engage with policymakers from both sides of the aisle who have a wide array of health care opinions and priorities,” he said.
Given the specific nature of STAT’s dataset, it’s difficult to compare the drug companies’ state-level spending to that of other industries. In total, the pharmaceutical/health products sector (including drug wholesalers and medical supply companies) contributed roughly $10.9 million to state lawmakers in 2019 and 2020, according to the National Institute on Money in Politics.
Some sectors known for their clout in Washington spent comparatively little: Defense aerospace companies, which focus far less on state politics than pharmaceutical companies, spent $229,000, and tobacco companies spent just $2,750. Oil and gas companies, however, spent roughly $12 million.
Though pharma has a reputation for favoring Republican policymakers’ ideas when it comes to supporting legislation, the industry did not discriminate by ideology. The industry contributed $4.5 million to Democrats and $4.4 million to Republicans. (However, more GOP lawmakers cashed drug industry checks: 1,581, compared to 1,118 Democrats.)
From a business perspective, the sums constitute only a tiny slice of each organization’s spending power. PhRMA’s $1.6 million in total spending represents a small fraction of the group’s roughly $450 million annual revenues. The $1.27 million Pfizer spent represents roughly .003% of the company’s annual revenue.
While the investments are modest, they can still pay dividends.
“A campaign contribution gets you access,” said Constance Bagley, a consultant and former Yale professor who has written about how corporations should approach political giving. “Legislators will say, ‘Well, that doesn’t mean I’m being bribed.’ But frankly, my view is that if you get immediate access if you give a contribution, and you don’t get immediate access if you don’t, it’s hard to say that it’s not getting you something.”
The donations came amid a tumultuous two-year period for drug companies. In 2019, industry lobbyists in statehouses across the country scrambled to fight off a wave of aggressive new bills aimed at capping drug prices or adding new business transparency requirements.
But in 2020, of course, Pfizer, Johnson & Johnson, and other major drug makers helped orchestrate a remarkable reversal in the public’s view of major drug manufacturers by developing Covid-19 vaccines in record time. While the pharmaceutical industry ranked as the least popular U.S. business sector in 2019, Americans in 2021 viewed it favorably by a 24-point margin, according to a recent poll.
“They’ve become very popular in the last year because of their efforts to create and develop and deliver vaccines,” said Guarino, the Oregon-based health policy advocate. “But when it comes to cost, the public is still frustrated, still paying out of pocket, still hurting.”
STAT conducted this analysis in partnership with the National Institute on Money in Politics. The data includes donations from the 23 biggest U.S. drug companies and the trade groups PhRMA and BIO.
Federal law prohibits companies from contributing directly to congressional campaigns. Instead, major firms form political action committees. These outside groups are funded by employee gifts and often run by corporate leadership. Any employee can contribute to their company’s PAC. But in practice, PAC funding often comes mostly from large donations from executives.
Some states let corporations donate directly to local candidates. STAT’s analysis does not distinguish between contributions from corporations and PACs. For example: Eli Lilly PAC checks to Michigan lawmakers are considered the same as direct Eli Lilly checks to lawmakers in Oregon.
State contribution limits vary widely, or, in some cases, don’t exist. Other states have well-established programs to publicly fund elections and thereby negate much of the need for fundraising from corporations or wealthy donors.
Campaign contributions are distinct from lobbying. Drug companies report lobbying spending after paying advocates to meet with lawmakers to push for or against certain bills. Campaign donations are simply cash gifts to a political campaign.
A handful hold elections in odd years, like 2019. For consistency, the analysis includes checks cashed in 2019 or 2020, no matter the candidate’s election year.
