Political contributions to Democrats from the pharmaceutical and health products industries rose to the highest level in at least two decades in the 2019-2020 U.S. election cycle, according to an analysis of data from the Center for Responsive Politics.
More than half of all political contributions from the two healthcare subsectors has gone to Democrats, continuing a trend of rising contributions to the party from these companies since 2012, the data shows.
As of Sept. 28, 56% of major party contributions from drug- and medical-device makers during the election cycle went to Democratic candidates, the highest percentage since at least 2000. That proportion has grown gradually since 2012, when only 42% of such contributions went to that side of the political aisle.
Meanwhile, Republicans have garnered 44% of political contributions so far in this election cycle following a steady decline over the last eight years. In 2018, the two parties collected roughly equal amounts from pharmaceutical and health products companies.
Among top pharmaceutical companies, New York's Pfizer Inc. contributed the most with just over $2 million to candidates and political parties in the 2020 election cycle. The company contributed 57% of that to Democrats and 43% to Republicans, according to the Center for Responsive Politics data.
Industry giants North Chicago, Ill.-based AbbVie Inc.; New Jersey's Johnson & Johnson; Switzerland's Roche Holding AG; and the U.K.'s GlaxoSmithKline PLC have also given more than 50% of their contributions to Democrats. Irish medical-device maker Medtronic PLC contributed 70% of more than $700,000 to Democratic candidates.
Drugmakers Amgen Inc. and Eli Lilly and Co. and medical technology company Boston Scientific Corp. were among the healthcare companies that contributed more to Republican candidates.
Drug pricing in politics
Jefferies analysts predicted in a Sept. 22 note that pharmaceutical companies would not be majorly affected by the outcome of the presidential election. However, they noted that a win by President Donald Trump over former Vice President Joe Biden would be more favorable to stocks as Biden "arguably is riskier for drug pricing" long-term.
CEOs at some of the largest pharmaceutical companies have been outspoken about political positions regarding drug pricing, remarking particularly on Trump's executive orders aimed at curtailing high price tags for U.S. consumers.
During their second-quarter earnings calls, leaders at Lilly, Pfizer and Amgen spoke against the July executive order to implement an international pricing model for pharmaceutical products. Trump has since amended the order to include Medicare Part D in addition to the original Part B of the government-run health program.
Lilly CEO David Ricks called the order a "horrible policy." Pfizer's Albert Bourla said it was an "enormous distraction." Amgen's Robert Bradway said importing prices "is problematic." All three CEOs said the order would harm innovation in the U.S.
Executive orders instruct federal agencies to take certain actions. But the orders have limited authority, can be difficult to enforce without legislation, take time to implement and can easily be challenged in court.
Bipartisan issue
An attempt to rein in drug pricing remains a bipartisan issue taken on by lawmakers and candidates on both sides of the aisle, posing a risk to the industry's reputation and leading to lower price hikes in 2020 than in previous years.
The Democratic-controlled House in December 2019 adopted Speaker Nancy Pelosi's legislation that would permit the federal government to negotiate the prices of the most expensive prescription drugs on behalf of the Medicare program and the commercial insurance market. A bipartisan Senate bill, which does not include the negotiation measures, has lingered in that chamber.
The House Oversight and Reform Committee said Sept. 30 in a series of reports that the U.S. government's Medicare insurance program for older and disabled Americans is a profit center for many companies, incentivizing them to keep their prices high. At a hearing on the same day, the panel questioned the former head of Celgene Corp., Mark Alles, and Bristol-Myers Squibb Co. CEO Giovanni Caforio and Teva Pharmaceutical Industries Ltd. CEO Kåre Schultz about U.S. price increases for their companies' products.
Public sentiment toward the industry has been bolstered to an extent by the sector's response to the COVID-19 pandemic after falling to last place on a list of 25 sectors in a 2019 Gallup poll. The Trump administration has been pressing companies to develop a vaccine. During the Sept. 29 debate with Biden, Trump contradicted recent remarks from his advisers that a vaccine would not be widely available for all Americans until mid-2021.