Big pharma spent nearly $250 million lobbying for government's $3 trillion Covid-19 fund package, says study
The race to acquire funding for potential Covid-19 vaccines and drugs has led to an uptick in lobbying activities intended to influence lawmakers in the US. According to a new study, big pharma has shelled out close to $250 million to that end.
In their study, researchers say that Congress has approved a package of $3 trillion for Covid-19 relief assistance, making it the largest in US history. This has attracted more lobbying as a result. The bills are earmarked for federal agencies, health care providers, Covid-19 testing, Medicaid funding, stimulus checks, unemployment benefits and small business assistance among other purposes.
"This is like sharks to blood, or bees to honey if you prefer a milder metaphor," says study author Bill Tayler, an accounting professor in the BYU Marriott School of Business in Utah. "Congress is giving out a lot of money, so the lobbyists are swarming. Lobbying activity levels are typically fairly stable, so when you see jumps like this, it’s a big deal," he adds. BYU collaborated with experts from Johns Hopkins University, Columbia University, and the University of Cincinnati.
In their investigation, the team compared lobbying efforts of the health sector with other sectors before and during the Covid-19 pandemic. They also evaluated the quarterly lobbying expenditures while identifying 30 health care organizations with the highest spending in the first quarter of 2020.
The first quarter of 2020 saw an increase in health sector lobbying spending by more than 10% while the non-health sector rose only 1%, according to their analysis. Among the top 30 healthcare organizations with the highest lobbying expenditures, 16 were pharmaceutical organizations. All of them spent almost $100 million in the first quarter of 2020. The figure represents a 55% rise over the fourth quarter of 2019, the researchers note.
The analysis throws light on how the health sector is ready to spend big to secure funding. "The return on investment on a dollar of lobbying appears much higher than a dollar of R&D [Research and Development]," says study coauthor Shivaram Rajgopal, a professor of accounting and auditing at Columbia Business School. Adding further, Ge Bai from Johns Hopkins Carey Business School explains: "The health sector's investment in lobbying has apparently generated handsome returns."
Among the pharmaceutical organizations, the lobbying expenditures by Novartis International increased by 259% this year. For AbbVie Inc and Biogen Inc, the spending rose by 155% expenditures and 344%, respectively. The highest, according to researchers, was from Pharmaceutical Research and Manufacturers of America (PhRMA), a non-profit trade association largely sponsored by pharmaceutical companies, spending $11.5 million in the first quarter of 2020.
"This is the largest stimulus bill in history," says study co-author John Barrick, a fellow accounting professor at BYU and expert on lobbying policy. "It's important to follow the money. Dollars spent on lobbying influence the allocation of funds and, right or wrong, I think that’s what people need to know." The study is published in the Journal of General Internal Medicine.