The pharmaceutical industry is walking a tightrope as it faces major changes to vaccine regulation, a mega tax-and-spending bill, and drug pricing policies that all stand to threaten its clout in Washington.
A crucial test came last week when US Health Secretary Robert F. Kennedy Jr. reconvened the Centers for Disease Control and Prevention’s vaccine advisory committee he had disbanded and replaced with some immunization and industry skeptics. As the committee voted Thursday to recommend against flu vaccines that contain thimerosal, a mercury-based preservative that Kennedy has assailed as unsafe with little proof, industry trade groups stepped gingerly.
The Pharmaceutical Research and Manufacturers of America, the industry’s long influential lobbying arm, noted that it agreed with the committee’s vote to recommend the RSV shot for infants, but was concerned about the panel’s recommendation on the use of thimerosal. A similar response came from the Biotechnology Innovation Organization, the chief lobbying group for biotech companies, whose statement called out “the rise of vaccine skepticism.”
The strategies that the industry’s lobbyists use, or don’t deploy, matter as President Donald Trump and his team are moving more decisively against the sector than during his first term—pulling vaccine recommendations, reintroducing a policy that would match US drug prices to those paid abroad, and threatening tariffs on drug imports. His administration also continues to support a tax and budget bill (H.R. 1) that could leave out key provisions drugmakers support.
Pharmaceutical manufacturers and their trade groups spent more than $150 million on federal lobbying last year, and that doesn’t include campaign donations, according to a tabulation from the nonpartisan OpenSecrets.org, which tracks lobbying and political spending. So far, the sector is on pace to exceed that with more than $53 million on federal lobbying early this year, even as PhRMA has posted a drop in revenue.
“They’re fighting a multifront battle,” said Neal Masia, former chief economist for Pfizer Inc., now CEO of software company EntityRisk. For many companies, he said, surviving the policy and political turbulence “is about all you can hope for.”
The administration’s fast-moving agenda is a challenge to keep up with, said Republican lobbyist Mark Williams, a principal at Ferox Strategies, which has clients in the industry.
“Right now, the industry is playing a giant game of whack-a-mole,” he said.
Picking Fights
The industry’s game plan so far appears to steer a careful, if sometimes slow, course—picking when to publicly respond and share concerns about executive orders and changes to regulations.
PhRMA waited days to speak out against Kennedy’s May 27 decision to pull the Covid-19 vaccine from the CDC’s recommended immunization list for healthy children and pregnant women. Its comments, shared through a Linkedin post, came after medical experts and public health groups immediately called out the decision.
On the massive layoffs across federal health agencies, the trade group said the Food and Drug Administration’s staff cuts raised “questions about the agency’s ability to fulfill its mission to bring new innovative medicines to patients,” but also cited the Trump administration’s efforts to find efficiencies.
“At the end of the day, industry looks at some of these things and has to make a judgment call,” said Nick Shipley, former vice president of PhRMA, and founder of Cronus Consulting. “You know, are we actually moving the needle here? And is there a bigger fight out there that means it’s not worth getting involved in this issue?”
Treading lightly, however, could be seen as a “lack of urgency” compared to other groups that have been swiftly responding to Trump actions, said Zach Baron, a director of the Center for Health Policy and the Law at Georgetown University’s O’Neill Institute.
The American Medical Association and at least 78 other medical societies in an open letter backed the vaccinations for influenza, Covid-19, and RSV ahead of last week’s Advisory Committee on Immunization Practice meeting. The American Hospital Association launched a seven-figure ad campaign in June against Medicaid cuts in the budget bill.
Tariffs, Prices & Middlemen
The industry hasn’t been shy to push back on some issues.
After Trump’s talk of tariffs on drug imports sent industry stocks into a spring swoon, Pfizer Chairman and CEO Albert Bourla told analysts that tariffs would hold back the company from making “tremendous investments” in the US.
And when Trump reintroduced in May his “most favored nation” policy that seeks to peg US drug prices to cheaper ones paid abroad, PhRMA launched a campaign highlighting why Americans pay more for prescription medicine.
Trump “is right to use trade negotiations to force foreign governments to pay their fair share for medicines,” Stephen Ubl, president and CEO of PhRMA said in a statement. But US patients “should not foot the bill for global innovation,” he said.
The industry’s responses also have pointed a finger at other players in the health-care system or federal programs, a move in a multiyear plan to defend the sector.
Following the revival of the “most favored nation” policy, industry groups reiterated their commitment to working with the administration, but pointed to pharmacy benefit managers as the reason for high drug costs.
PBMs, which function as middlemen between drugmakers, insurers, and pharmacies, have been long criticized for their lack of transparency and inflated costs to health plans.
“There’s been a concerted effort to divert attention to PBMs,” said Leigh Purvis, prescription drug policy principal for AARP, which supports changes to PBMs. But, she said, there are “no angels in a market that’s worth hundreds of billions of dollars.”
Drugmakers also continue to raise issues with the federal 340B Drug Pricing Program and the Biden-era Inflation Reduction Act’s drug price negotiations—two government programs that seek to deliver lower drug prices to patients, but are opposed by pharmaceutical giants over administrative and constitutional claims.
“They’re not shy of going to court over anything,” Baron said, referring to challenges brought during Trump’s first term and the Biden administration. “I don’t doubt that they have contingencies for all these different options, but I think part of it is sort of understanding the gaps.”
Doing More With Less
All of the battles are occurring as the industry tries to do more with shrinking budgets.
PhRMA’s total revenue in 2021 was $609 million but had fallen to $483 million in 2023, a 20% drop, according to its tax filings. The 2024 returns will be available later this year.
At the same time, PhRMA’s lobbying surged in this year’s first quarter, its biggest spend in a quarter. The group added two new members last year, Genmab and Neurocrine Biosciences Inc., and AstraZeneca returned in April.
BIO has posted an increase in overall revenue but a decline in its lobbying expenditures, tax and lobbying disclosure filings show. BIO spent just under $900,000 on federal lobbying in the first quarter of the year, down from $1.8 million in last year’s first quarter and a high of $3.7 million in 2022’s fourth quarter.
The Association for Accessible Medicines also finds itself in a battle to do more lobbying, but the industry’s revenue has been fairly flat in recent years, according to tax filings. That’s a concern because generics and biosimilars account for roughly 90% of the market for patient drugs, said John Murphy III, president and CEO of AAM.
“I’m trying to use the noise around the brand industry as an opportunity for us,” he said. “It’s going to be a very active year for the voice of the generic and biosimilars industry.”
And still, uncertainty looms. Little information has been shared about the president’s executive orders seeking to lower drug prices and who would be affected by tariffs, industry watchers say.
“Trump clearly likes using the bully pulpit press conference approach,” Shipley said. “It is hard to plan and make commitments without going beyond headlines and press statements.”