An AC Compacting LLC pill compacting machine sits on display during the International Pharmaceutical Expo (Interphex) in New York, U.S.(Photographer: Timothy Fadek/Bloomberg)

Pharmaceutical Companies Seek Stability in Trump Drug Cost Fight

(Bloomberg) -- Several major pharmaceutical companies lowered their spending on lobbyists in the second quarter of 2018, a time of uncertainty as President Donald Trump’s administration continued its campaign to lower drug costs for consumers.

Pharmaceutical Research and Manufacturers of America spent $5.54 million between April and June, down 7.7 percent from the same period last year, according to disclosures released by the federal government on Friday.

Companies including Johnson & Johnson and Bayer Corp. decreased their spending from the first quarter, when several companies set lobbying records amid the first signs of Trump’s moves to reduce out-of-pocket medicine costs.

The president himself has made pharmaceutical companies targets of his barbed tweets.

Lobbying efforts by Merck & Co. cost $830,000 in the second quarter, and this represented a 57.9 percent decrease from last year. Pfizer Inc., on the other hand, spent $1.94 million on Washington lobbying in the second quarter, a 2.1 percent increase in lobbying spending since last year.

Azar’s Blueprint

In May, Health and Human Services Secretary Alex Azar published “American Patients First,” a blueprint detailing plans to lower prices and out-of-pocket costs by lifting rules preventing government health programs from securing deep discounts and introducing incentives for drug-makers. The pharmaceutical trade group and AbbVie Inc. lobbied on the blueprint, according to the filings.

On Wednesday, Azar submitted a proposal to the White House that would cut rebates offered to insurers and pharmacy-benefit managers, a measure drug companies have not backed.

Earlier this month, after the end of the period reflected in the disclosures, Pfizer, which is based in New York, decided to delay expected increases in drug prices after Trump tweeted the company was “merely taking advantage of the poor,” although prices across the industry are still on the rise.

Within days of the Pfizer announcement, Swiss-based drugmaker Novartis AG’s Chief Executive Officer Vasant Narasimhan told Bloomberg that the decision to back off from further price increases was “prudent” given the “dynamic environment” of policy in the U.S, while saying the company aimed to return to “value-based pricing."

Novartis’s spending on lobbyists decreased to $860,000 from $3.28 million during the second quarter, which began April 1.

The drug company, in May, also faced controversy over revelations that it had paid $1.2 million to a consulting firm headed by Trump’s onetime personal lawyer, Michael Cohen, to gain insight into the administration’s health-care policy. The company’s top lawyer stepped down over the arrangement, which Narasimhan called a “mistake.”

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