Former Democratic Rep. Kurt Schrader, a prominent ally of Big Pharma while in Congress, has joined a K Street lobbying firm with a heavy roster of pharmaceutical industry clients.
Schrader, who was defeated last year in an Oregon primary by attorney Jamie McLeod-Skinner, became a principal at lobbying firm Williams & Jensen, according to an announcement from the firm earlier this month. A former co-chair of the centrist House Blue Dog coalition, the seven-term Rep. Schrader told Politico that he plans to register to lobby the Biden administration and that while he is barred from directly lobbying Congress for one year under federal law, he “hopes to bring value to his new firm by connecting it with lawmakers willing to make deals in a closely divided Congress.” Specifically, Schrader said he plans to lobby on implementation of the Inflation Reduction Act (IRA), which includes a provision allowing the government to negotiate with pharmaceutical companies for Medicare to pay lower drug prices.
The Department of Health and Human Services is currently developing guidance for implementing the IRA’s negotiations program, a process that is subject to lobbying by the pharmaceutical industry. Williams & Jensen’s pharmaceutical industry clients have already begun pushing back against the government’s proposals for the program. For example, in a 76-page comment, Pharmaceutical Research and Manufacturers of America (PhRMA) critiqued the initial guidance that the Centers for Medicare & Medicaid Services published in March, arguing that it did not give drug companies enough opportunities to engage with regulators and that it contained a gag clause during the negotiation process, among other things.
In the previous Congress, Schrader was at the forefront of efforts by a handful of conservative Democrats who fought against the prescription drug pricing reforms that Democratic leaders were planning to include in the budget reconciliation legislation. In May 2021, shortly after President Biden called on Congress to pass legislation allowing the government to negotiate drug prices, Schrader joined a letter from conservative Democrats to Speaker Pelosi expressing their desire for the House to pass healthcare legislation with buy-in from private sector stakeholders that could lower costs for consumers while preserving “our invaluable innovation ecosystem.” In raising innovation, the Democrats on the letter appear to have been gently promoting the interests of the drug industry, arguing that the Democrats’ legislation on drug pricing could cause them to invest less in developing new drugs.
A report released by the House Administration Committee soon after Schrader signed the letter found that the largest pharmaceutical companies have spent more on stock buybacks and investor dividends than on research and development.
The same day Schrader came out against the Democratic plan, Schrader co-introduced a compromise bill with Peters that would allow, but not require, Medicare to negotiate with manufacturers on the prices of drugs or biologicals that have outlived their exclusivity periods. Pharmaceutical industry trade association the Biotechnology Innovation Organization called the Peters-Schrader bill “an important development” that “certainly changes the discussion about drug pricing.”
Ultimately, the Democrats passed the reconciliation bill in August 2022 with language requiring the Department of Health and Human Services to negotiate prices for some treatments covered under Medicare Part B and Part D on which they spend the most money and that don’t have generic or biosimilar competition. Experts in pharmaceutical IP told NBC News they expect Big Pharma to begin releasing their own generics to sidestep the IRA’s price negotiation requirements.
With practice areas that include tax policy and pharmaceutical IP, business law firm Williams & Jensen lobbies for over a dozen large pharmaceutical interests, including drugmaker trade association the PhRMA, the third-highest lobbying spender last year, and member companies Eli Lilly, Merck, Pfizer, Novo Nordisk, Sanofi, and others. Of the nearly $15 million that Williams & Jensen spent on federal lobbying last year, some $3 million was on behalf of clients in the pharmaceutical and health products industry, according to OpenSecrets.
The pharmaceutical industry’s lobbying spending in D.C. hit record highs in 2021 and 2022 as it fought back against affordability measures being advanced by Democrats.
Over his career, the pharmaceutical and health products industry was Schrader’s second-highest donor, according to OpenSecrets, giving his campaigns more than $742,000. In his 2020 campaign, facing a general election challenge from Republican Amy Ryan Courser, the PACs of pharmaceutical companies were Schrader’s top donor, pouring in $157,000 to his re-election committees.
Facing a challenge in the 2022 primary from McLeod-Skinner, who raised the issue of Schrader’s closeness to business PAC donors, Schrader’s bid benefited from a six-figure ad buy from Center Forward, a “dark money” group affiliated with the Blue Dog Coalition that is funded by PhRMA and whose board of directors includes prominent pharma lobbyists. As the treasurer of the Blue Dog PAC since 2016, Schrader had approved at least $750,000 in donations to the Center Forward Committee super PAC running ads backing his campaign.
Schrader proposed multiple bills throughout his congressional career to promote the U.S. market for biosimilars, which are essentially generic versions of biologics. The biosimilars market is already dominated by some of the largest drug companies, including Pfizer, Amgen, and Novartis. Another pharmaceutical industry-friendly issue that Schrader championed in Congress was regulating the pharmacy benefit managers (PBMs), companies such as CVS Health and Express Scripts that act as middlemen between manufacturers and buyers. The pharmaceutical industry has long sought to draw attention to how PBMs drive up drug costs for consumers, potentially deflecting lawmakers’ attention away from their own role. A bill that Schrader proposed in 2019 with former Rep. Greg Gianforte (R-Mont.) would have required PBMs to issue reports on the formulary designs, and it would have banned “spread pricing,” where PBMs charge payers more than they pay drug companies and then pocket the difference.