Analysis: Drug pricing reform opponents win most pharma lobbying money
Oct 25 (Reuters) – Democratic Party lawmakers holding up proposed drug pricing reforms are among the largest beneficiaries of the pharmaceutical industry’s push to stave off price cuts, a Reuters analysis of public lobbying and campaign data shows.
The industry, which traditionally gives more to Republicans, channeled around 60% of donated campaign funds to Democrats this year. It has spent over $177 million on lobbying and campaign donations in 2021.
Nonprofit political action committees (PACs) run by Pfizer Inc (PFE.N) and Amgen Inc (AMGN.O) and the Pharmaceutical Research and Manufacturers of America (PhRMA) were among the biggest donors, according to political spending data from OpenSecrets, formerly the Center for Responsive Politics.
Drugmakers are seeking to block laws that would give the U.S. government authority to negotiate prices for prescription medicines. Current U.S. law bars the government’s Medicare health insurance program from negotiating drug prices directly.
Many of the Democrats opposing an ambitious drug reduction bill proposed in the House of Representatives are among some of the biggest recipients of drug manufacturer lobbying funds.
They include Senators
They include Senators Kyrsten Sinema of Arizona, Robert Menendez of New Jersey, and Representative Scott Peters of California, OpenSecrets data covering industry donations through September of 2021 shows. In all, they have received around $1 million in pharmaceutical and health product industry donations this year.
A spokesperson for Sinema did not respond to a request for comment on the funds she has received but said the Senator supports making drugs as cheap as possible for patients.
Menendez and Peters said the donations did not influence their views. All three said they are opposed to The Lower Drug Costs Now Act, which is sponsored by Democrats in the House of Representatives and also known as H.R.3.
Menendez and Peters have advocated for alternative scaled-back drug pricing reforms that would still allow Medicare to negotiate drug prices but would lead to significantly smaller savings.
Congressman Frank Pallone of New Jersey, who is also one of the top recipients of drugmaker donations, voted in favor of H.R.3.
Sinema, who campaigned in 2018 on cutting drug prices, told the White House she opposes allowing Medicare to negotiate them. She received about $466,000 from the industry in 2021, according to OpenSecrets data.
Peters was the top recipient of pharmaceutical industry funds in the House this year at nearly $99,550, according to OpenSecrets data. A spokesperson said Peters was not influenced by lobbying money and opposed the proposed law to protect pharmaceutical industry jobs and innovation.
Drugmakers say the Democrats’ proposed drug price overhaul would undermine their ability to develop new medicines, an argument they have used whenever price cuts are discussed by politicians regardless of political party.
“Patients face a future with less hope under Congress’ current drug pricing plan,” PhRMA Chief Executive Steve Ubl said in an August statement in reference to the proposed law. PhRMA declined to comment on donating to key Democratic opponents of the bill.
The United States is an outlier as most other developed nations do negotiate drug prices with manufacturers.
Amgen did not immediately respond to requests for comment on its donations and Pfizer declined to comment.
PROSPECTS FOR REFORM
President Joe Biden has vowed to cut medicine costs, in part by allowing the federal government to negotiate drug payments by Medicare, which covers Americans aged 65 and older.
But prospects for major drug pricing reforms have stalled in recent weeks amid opposition from centrist Democrats including Sinema and Peters. Negotiations are ongoing, eight Democratic staffers said.
The lawmakers’ resistance comes as 83% of Americans support allowing Medicare to negotiate medicine costs, according to a Kaiser Family Foundation poll. The United States spends more than twice as much per person on drugs as other wealthy economies, about $1,500, for a total of around $350 billion in 2019.
“Members of Congress don’t always mirror the views of the public and the pharmaceutical industry is a powerful lobbying force,” said Larry Levitt, a health economist at Kaiser.
The healthcare industry is the second largest industry lobbying group in the United States behind the finance sector. It donated more than $600 million to politicians ahead of the 2020 elections.
The pharmaceutical industry has spent hundreds of millions of dollars per year to sway federal and state policy. But current Democratic leadership has the industry concerned major reforms could actually be enacted and is working harder to offer alternatives such as reducing insurance co-pays, one industry source said. “It’s been sort of a mad scramble.”
Corporations in the United States are not permitted to make direct contributions to candidates but can give money through PACs. Most corporate PACs, including Pfizer’s and Amgen’s, are run by company managers and employees.
Democrats and some drug price experts say the Lower Drug Costs Now Act could save U.S. taxpayers and consumers billions annually with relatively minor impact on innovation.
A House Oversight and Reform Committee report showed that top drugmakers have spent around $50 billion more on share buybacks and dividends than research and development between 2016 and 2020.
Lovisa Gustafsson, a healthcare policy analyst at the Commonwealth Fund, a non-profit healthcare advocacy group, said, “There are other ways that we can incentivize innovation, aside from just paying huge margins for pharmaceutical companies.”
Reporting by Ahmed Aboulenein in Washington and Carl O’Donnell in New York; Editing by Caroline Humer and Bill Berkrot
Our Standards: The Thomson Reuters Trust Principles.
Metal is the ideal packaging for vitamins
Carlo Rodrigo Borges, Business Development Manager, Trivium Packaging
The vitamins and supplements market is booming. A 2022 European survey by Ipsos found that in 14 EU member states almost 9 in 10 European consumers had taken food supplements in their lives and 93% had done so in the last 12 months. As a result, the Europe nutrition and supplements market size was valued at USD 61.8 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 5.8% from 2022 to 2030.
As Europe’s population has become more aware of health and fitness, consumers have been increasingly adopting nutritional supplementation to achieve their dietary and wellness goals. The demand for natural and organic products has grown, alongside the demand for plant-based products and functional foods, owing to the rapidly ageing population.
The push to go green
As a growing sector, there is potential for vitamins and supplements to contribute to consumers’ and brands’ increasing focus on sustainability.
The drive to eliminate wasteful packaging, especially single-use plastic, is well documented.
Brands are under pressure to amplify and fulfil their ESG credentials. In addition to a brand’s own sustainability goals and initiatives, legislation is forcing a shift with a host of sustainability-focused legislation throughout Europe already and likely more to come.
Consumers are also driving pressure on brands to offer more sustainable packaging as they increasingly turn away from single-use plastics and look for more sustainable options. The 2023 Buying Green Report shows that 71% of consumers have chosen a product in the last six months based on its sustainability and credentials and 63% of consumers are “less likely” to buy products in harmful packaging. In addition, 90% of consumers among younger generations (18-24 years old) showed a willingness to pay more for products in sustainable packaging. In
Europe, 60% of respondents considered plastic to be harmful and related plastic to ocean pollution. With 51% of consumers in this region saying they won’t buy products in packaging harmful to the environment, there is a significant opportunity for brands to tap into a wave of consciousness around sustainability.
Metal: a sustainable solution
If you look at vitamins and supplements on shelves in stores today – you’ll see a plethora of plastic containers, and it can be hard to differentiate one brand from the next. Even those containers that are recyclable may not be recycled. Currently, in Europe, only 14% of plastic is recycled. Recyclability depends on multiple considerations including the make-up of the material, whether it has a label, the availability and capabilities of local recycling facilities and, of course, consumer behaviour. The use of metal in packaging minimizes these variables – metal makes it easy to recycle without limits allowing recycling facilities to process it without difficulty. The only variable left is consumer behaviour.
Metal can be easily recycled over and over without degradation. As such, metal is infinitely recyclable, and its true circularity gives it a unique role in helping to protect the planet for generations to come. In fact, 75% of aluminium that’s ever been produced is still in use today. While companies may opt to use glass, the only other infinitely recyclable material, metal has some advantages over glass as it is lighter to transport and more durable for both transit and consumer use. Metal also requires less energy than glass to recycle. In addition, metal packaging allows printing directly onto the bottle, while glass and plastic need adhesive labels which often cannot be recycled by local councils.
As the Protect, Promote, Preserve report explains, choosing the right packaging for a brand’s products is a decision that brands will often dedicate considerable time. Optimal packaging, in terms of format, size, and material can help maintain product integrity and enhance the customer experience. Selecting the right type of packaging is particularly important for products being consumed, which require exceptional protection to reduce the risk of damage and food waste during storage, handling, and consumption. This is why many brands are turning to metal which offers superior levels of robustness and durability relative to alternatives on the market. Metal ensures that oxygen, damaging UV light, and moisture cannot permeate its contents – an important consideration to keep products safe for consumption.
Alongside protecting and preserving their products, metal packaging can be an extremely effective brand tool. Metal packaging provides greater and more sustainable opportunities for brands looking to differentiate their product offerings. By printing directly onto the packaging, brands can use the entire surface area and make use of advanced graphics and prominent colours on their cans and bottles without sacrificing packaging functionality and/or recyclability all without the inclusion of unrecyclable labels. Research suggests that one-third of consumer purchasing choices are based on packaging alone, so the opportunities for brand creativity can be a game-changer for brand growth. Metal printing also does not compromise product safety because of the impermeability of metal, and because the inks used are fully compliant with strict food safety regulations. The metal container itself can also be adapted for numerous different shapes and sizes of containers offering huge versatility. With so many choices, packaging producers can collaborate with their customers and help guide them to the right solution which can be tailored to their audience and brand image.
The vitamins and supplements sector continues to grow, and as the sector grows so does its impact on the environment. Improving sustainability is not just about checking boxes but also about attracting customers and improving the bottom line in an increasingly competitive marketplace. Consumers are taking note of the sustainability of metal packaging and making purchasing decisions based on sustainability, however, consumers continue to remain drawn in by packaging’s presentations and aesthetics. Metal offers a sustainable solution that meets consumers’ needs with a premium look and feel while providing the vital protection needed for the contents inside. Brands that invest – time and money – in the switch to metal packaging now are set up to benefit in the long term.
The role of social media and celebrity culture in making cosmetic surgery accessible
By Michael Saul, Partner at Cosmetic Surgery Solicitors
The popularity of cosmetic surgery has grown in tandem with social media and celebrity culture. Once thought to be only accessible to celebrities or the rich, cosmetic procedures today are more affordable than ever. The demographic of those facing the knife has changed dramatically over the last few years, and the reason for wanting to may be more linked to celebrity culture than economic access.
Here, Michael Saul at Cosmetic Surgery Solicitors explores how social media and celebrity culture have facilitated widespread access to cosmetic surgery, and the potential implications associated with this trend. For the trend to be understood, we must consider the measures taken by the government and medical professionals to ensure that the priority is to safeguard the health of individuals who pursue procedures.
The popularity of cosmetic surgery
The increase in popularity can be partially attributed to the influence of social media and celebrity culture, which have made it easier for people to access information about different cosmetic treatments. While the accessibility of these treatments is beneficial in certain circumstances, it has also led to serious concerns. Most notably, it has highlighted the emotional and physical consequences of chasing an ever-changing beauty standard. Wider accessibility also translates to difficulty in regulating procedures on a wide scale.
A report from the International Society of Aesthetic Plastic Surgery (ISAPS) states that there were over 24 million surgical and non-surgical cosmetic procedures conducted worldwide in 2018 – a 4% annual increase.
Social media giants such as Instagram and Facebook can display information about different cosmetic treatments and procedures to billions of people worldwide. Social media platforms are pedestals for celebrities to constantly flaunt their appearance and endorse particular cosmetic surgery brands or services. The never-ending feed of celebrity content creates pressure on individuals to conform to unrealistic ideals of beauty or attractiveness. In a celebrity-praising society, it is no surprise that many people are led to pursue such treatments to “fit in” with what they are told is the standard.
A growing concern is an ability to control and regulate the emerging offers for cosmetic surgeries. Accessibility without proper regulation can lead to misled, ill-prepared, or unfit individuals undergoing surgery. More businesses in the industry drives price competition between practitioners, potentially resulting in substandard treatment and medical care in an effort to cut costs. In response, governments must put in place more stringent and considered regulations governing who can offer these services, and the expected standard of service from practitioners, to ensure safety for those who opt for such treatments wherever they receive treatment.
The complications with accessible cosmetic surgery
More accessibility to cosmetic procedures without regulation can easily result in a decrease in safety and efficacy standards. Increasing demand has seen some medical professionals cut corners to keep up with unprecedented demand. Cutting medical corners leads to dangerous consequences, such as botched surgeries, infections, and scarring.
It is important to consider that even elective procedures often result in serious psychological implications on the patient if they are not performed properly, or if the patient is not prepared for them. Individuals contemplating cosmetic procedures must consult a board-certified surgeon with longstanding experience in the latest techniques and standards before making any decisions.
Apart from possible health dangers, there is also worry that the ease of availability of cosmetic surgery may lead to a warped perspective of beauty and body image. While social media has been primarily praised for increasing people’s access to cosmetic treatments, it has also been criticised for encouraging unrealistic beauty expectations. As more people pursue these procedures without understanding the ramifications or investigating all of their alternatives, the danger of needless operations and an unhealthy preoccupation with physical beauty grows.
Is the blame on social media?
Social media has had a huge influence on the cosmetic surgery industry. This is primarily due to the prominence of “influencers” on various social media platforms who advertise themselves and their lifestyles. Several influencers have undergone cosmetic operations, and they frequently show off the results, giving their huge following an idea of what they may look like if they went through with it as well.
This type of promotion can be especially problematic for young people who are easily impressionable. The syndrome known as “Snapchat dysmorphia” has been observed, in which people feel motivated to change their look in order to resemble manipulated photographs that appear on social networking sites.
Additionally, not all cosmetic surgery centres offer safe or high-quality procedures. Untrustworthy therapists may utilise social media to entice vulnerable patients who are yearning for a physical change. Despite warnings from medical professionals, some patients may still be tempted to take this risk just to achieve the same results they see others getting on their timelines and news feeds.
Finally, persons seeking cosmetic surgery operations should be aware that, while it may appear beautiful and easy at first look, social media may be a powerful yet harmful influence when making judgements regarding aesthetic improvement treatments. It is also worth mentioning that certain countries are starting to take action against fraudulent advertising connected to cosmetic surgery, particularly those associated with influencer culture, in order to safeguard consumers from misleading information and potentially dangerous practices.
Is the blame on celebrities?
Celebrities have been known to impact many elements of life for their fans, including fashion trends and haircuts, as well as lifestyle choices. It has also been proposed that celebrities can have a significant impact on people’s decisions to undertake cosmetic operations.
While celebrities may inspire people to assume that cosmetic surgery is far less dangerous than it is, there are always dangers involved with these treatments. Consumers should also be aware that not all cosmetic surgeons provide the same degree of care or skill; it is critical to conduct adequate research and locate a trustworthy practitioner who follows all safety measures before undergoing any sort of operation.
It’s important to remember that everyone’s body is different, so what works for one person might not work for another. As a result, every choice to proceed with surgery should be made cautiously and with a full understanding of all potential risks and results. Taking ideas from celebrity culture may be entertaining, but when it comes to health care or cosmetic surgery in particular, we must always exercise prudence and make our own educated judgements rather than depending primarily on external influences.
It is undeniable that social media and celebrity culture have made cosmetic surgery more accessible. Governments and medical experts must be mindful of these dangers to protect the safety of people who undergo such procedures before irreversible physical and psychological damage is caused.
How pharma companies can accelerate customer engagement post-pandemic
By Carolina Wosiack, Managing Director EMEA, CI&T
Throughout the 2020s, pharmaceutical companies have been thrust under the spotlight like never before. Fortunately, they’ve largely responded exceptionally, delivering life-saving vaccine treatments at record speeds. As such, they’ve been handsomely rewarded, too. Pfizer recently announced record earnings of $100 billion for 2022, largely driven by the ongoing rollout of its COVID-19 vaccine and the launch of the antiviral pill Paxlovid. However, the company also expects its revenue to decline by as much as a third this year, as demand for these ‘blockbuster’ treatments reaches a plateau.
Now, pharma companies are moving into new markets and working on new drugs to sustain their growth. In February 2023, AstraZeneca CEO Pascal Soriot stated in the company’s annual results announcement: “…we are on track to deliver industry-leading revenue growth through 2025 and beyond, and have set AstraZeneca on a path to deliver at least fifteen new medicines before the end of the decade.”
These companies already know how to research, create, and test innovative new drugs until the formula is perfected for public use. But when it comes to marketing such products, pharma executives tend to be risk averse and obsessed with outputs. With the pandemic largely behind us, how can pharma companies continue to boost revenues and customer engagement? Let’s take a look.
- Small, agile product teams can identify opportunities the fastest
If pharma businesses want to continuously unlock new revenue streams, they may need to adapt their working models and mindsets. Large, traditional R&D departments are no longer nimble enough for today’s volatile world. Analysis of over 65 million scientific papers, patents, and software products from Harvard Business Review in 2019 uncovered a near-universal conclusion: “whereas large teams tended to develop and further existing ideas and designs, their smaller counterparts tended to disrupt current ways of thinking with new ideas, inventions, and opportunities.”
For leaders to cultivate true innovation, they must set up compact teams that focus on specific customer needs, identify issues, and then work to address them. Here, it’s often useful to build ‘two-pizza’ teams made up of no more than eight people (the name comes from an Amazon maxim—if it takes more than two pizzas to feed a team, the team is too big). These nimbler groups can discover how to solve these problems at pace, and then recommend their ideas for wider production.
A prime example is the team behind the Oxford–AstraZeneca COVID-19 vaccine. The vaccine’s rapid development was led by just six scientists based at Oxford University. Manufacturing then expanded to facilities across five global continents—and in less than twelve months after its first approval, two billion doses had been supplied to countries around the world. It’s this ability to embrace change and move quickly that will set companies apart throughout future periods of both calm and crisis.
- Research and testing will optimise omnichannel customer strategies
Modern customers interact and engage with businesses across numerous digital touchpoints—from PCs to smartphones, websites to social media. But it’s crucial to identify and test which channels are best at delivering customer value, as part of their healthcare interactions and experiences, before companies heavily invest in campaigns within them.
Pharma content marketing, such as articles, podcasts, and webinars, is a good way to educate and entertain your audience. However, content that attracts isn’t always content that sells. Businesses must first grasp and understand their customers’ journeys to create truly relevant content. This process can be complex, and numerous experiments will likely be required to uncover the best way forward. So, pharma companies must ask themselves a) what behavioural changes do they want to elicit amongst their customers? And b) how can they positively influence human behaviour that drives business value?
Managers must also consider customer differences across locations and demographics, and tweak strategies accordingly. For instance, 18 to 24-year-olds are more than twice as likely to use social media for health-rated discussions than those between 45 and 54. Targeting the second demographic via Facebook or Instagram ads may not be cost-effective—so businesses must research more practical avenues.
A cultural change may even be necessary. Fewer organisational silos and a greater focus on digital and omnichannel will help forge collective progress, as new research shows the pharma industry is set to spend $4.5 billion on digital transformation by 2030. More attention paid to delivering strong content and smooth experiences, in the right place and at the right time, will ensure your business remains at the forefront of tech, marketing, and the minds of your customers.
- Data will uncover increasingly important, multi-layered insights
The role of data in the pharma industry is becoming more critical than ever. It helps companies find patterns that enable better, faster decisions, and unlock growth in new areas via a data-driven and data-backed approach. For instance, data can highlight genetic makeup, disease status, demographics and more to help researchers quickly and cost-effectively find appropriate candidates for an urgent clinical trial. As the price of bringing a new drug to market reaches as high as $1.1 billion, cost optimisation via data is key.
Unleashing data from silos and sharing it between stakeholders will also transform business intelligence and value. Insights from field-based teams are crucial for customer experience and digital design too, as they can inform appropriate upgrades and developments. For example, what information do customers require before making a purchase decision? What are the most popular payment methods?
Pharma companies that combine their data with AI technologies will be able to unearth truly impactful insights that accelerate the market delivery of medicines and products. Ultimately, strong customer engagement along with innovative new products is a combination guaranteed to solidify your presence and supercharge your revenues.
What’s next for pharma?
The pharmaceutical industry performed perhaps its greatest feat yet in safely guiding the world through the worst of the pandemic. Some companies now find themselves as household names, in unprecedented positions of influence. But to remain successful, the sector’s work is only just beginning.
From Blockbuster to Kodak, all too often we’ve seen heavyweights in other industries squander seemingly unassailable leads. So, companies who pivoted to play an important role in tackling COVID-19 mustn’t rest on their laurels, but instead invest and adapt further to solidify their positions. Meanwhile, challenger pharma brands and wider healthcare organisations must work harder than ever to catch up with competitors and position themselves at the forefront of the industry’s future. The sector is evolving as fast as its treatments. Pharma businesses that build smaller research teams, optimise their omnichannel strategies, and accelerate their data analysis will be well positioned to guide us through whatever the world throws at us next.