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Pharma-Backed Dark Money Group Attacks House Democrats’ Lower Drug Pricing Plan

The American Action Network is pouring millions into a TV, digital advertising and phone campaign attacking H.R. 3.

A screen capture from the American Action Network ad, "Kim, What's a Life Worth?"

The American Action Network is pouring millions of dollars into a TV, digital advertising and phone campaign attacking House Democrats’ proposal to lower prescription drug costs.

H.R. 3, the legislation championed by House Speaker Nancy Pelosi (D-Calif.), would let Medicare negotiate lower prices for prescription drugs and set a $2,000 maximum for out-of-pocket spending. Only two Republicans voted in favor of the bill when it passed the House in 2019.

The Pharmaceutical Research and Manufacturers of America, the largest U.S. pharmaceutical trade association, gives millions of dollars to AAN annually and donated $4.5 million in 2019 — PhRMA’s top political donation that year. The association, as well as the pharmaceutical industry at large, vehemently opposes H.R. 3.

The conservative organization’s TV ads are currently running in at least 21 House districts, including in those of Reps. Elissa Slotkin (D-Mich.) and Andy Kim (D-N.J.) About $1.2 million of the total $4 million campaign will be spent in three New Jersey districts, according to the New Jersey Globe. The campaign targets 43 districts in all when digital ads and phone calls are included. The ads’ messaging argues that the bill would impede companies’ abilities to develop new cures and limit accessibility to the COVID vaccine. It urges constituents to call their representatives to oppose the measure.

Dan Conston, the dark money group’s president, urged Democrats to cast aside Pelosi’s plan and instead push for H.R. 19, a Republican alternative to address prescription drug prices introduced in 2019.

“Breakthrough American innovation is giving us the tools to end this pandemic and get our lives back to normal,” Conston said in a statement. “Nevertheless, Pelosi is pushing a socialist takeover of the prescription drug industry that will reduce access to lifesaving medications, cancel new cures for the patients who need them and send American innovation overseas.”

AAN, a 501(c)(4) nonprofit aligned with Republican House leadership that does not disclose its donors, did not disclose any of its spending to the FEC during the 2020 election cycle. The nonprofit funneled more than $9 million into political advertising boosting Republican congressional candidates and donated over $26 million to the Congressional Leadership Fund, a super PAC supporting the House GOP. The two groups share staff members and resources. With nearly $39 million in expenditures, AAN ranked sixth among top “dark money” groups in 2020.

Because of a requirement that Medicare must be used to pay for select medications, drug companies are able to increase prices on critical drugs. The pharmaceutical industry has successfully lobbied to keep this rule in place after previous attempts by former president Barack Obama’s and Donald Trump’s administrations to change it.

Allies in Opposing H.R. 3

Democrats will have to worry about more than just AAN if they want to push the bill through. Powerful lobbyists in the pharma industry — who shattered Q1 spending records this year — are unlikely to back down without an expensive fight. PhRMA came out in strong opposition to H.R. 3 on April 22. The association tops the industry’s lobbying spenders list perennially and has spent $8.7 million so far this year.

“House leaders have introduced the same old divisive drug pricing proposal that will put more barriers between patients and their medicines,” CEO Stephen J. Ubl said in a 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.”

The U.S. Chamber of Commerce also said that it opposes the bill, equating it to “government price controls.” The big business group is the top overall lobbying spender in 2021 thus far, and has aligned with large pharmaceutical companies on other issues. That includes opposing a proposal to waive intellectual property protections on COVID-19 vaccines, which President Joe Biden recently approved.

Concerns Among Democratic Lawmakers

Some lawmakers on the left have echoed similar concerns to AAN regarding how the bill could affect the pace of drug development. A group of 10 moderate Democrats sent a letter to Pelosi urging a bipartisan bill and expressing worry that the legislation might hinder pharmaceutical companies’ efforts to develop new drugs, according to The Hill. Reps. Scott Peters (D-Calif.) and Jake Auchincloss (D-Mass.) spearheaded the effort.

Meanwhile, some of their colleagues continue to urge for the bill and additional provisions. A group of 17 senators, including Elizabeth Warren (D-Mass.) and Bernie Sanders (D-Vt.), sent a letter to Biden on April 25 asking for including the bill in the plan. It also recommended lowering the age requirement to be eligible for Medicare and expanding coverage to include dental, hearing and visual care. While Biden has expressed support for the bill, he has not committed to including it in his American Family Plan.

Even if Democrats unite on H.R. 3, the evenly-split Senate will pose challenges to passing the bill, which requires 60 votes to go avoid the filibuster. Finance Committee Chairman Ron Wyden (D-Ore.) said that the bill could require modifications, though he emphasized that keeping in price negotiation and caps is critical.

“My sense is what the president has decided to do is give the Congress the space to find an agreement, and that job begins now,” Wyden told reporters on April 30. He stressed that Congress will consider “every possible vehicle” to move forward.

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