On the campaign trail in Montana, Republican Senator Steve Daines frequently spotlights his efforts to lower the costs of prescription drugs. In a tight Senate race against popular Democratic governor Steve Bullock, he has emphasized his support for the Prescription Pricing for the People Act. Daines was one of six Republicans on the committee who voted to advance the bill out of the Senate Finance Committee last July which was introduced by Chuck Grassley (R-Iowa), the Senate finance chairman, and Ron Wyden (D-Ore), its ranking member. It was passed by the committee 19 to 9, with the support of all 13 Democrats.
The Montana senator sent a mailer to over 150,000 Montanans, highlighting his support, touting its features, including lowering out-of-pocket costs for Medicare beneficiaries; and fighting to “hold those responsible for negotiating drug prices accountable.” He’s also highlighted his support for the Grassley-Wyden bill in press releases, on his Senate website, and throughout his campaign. In one ad, Daines noted he was “taking on Big Pharma to lower prescription drug prices.”
“We came together and we passed a breakthrough prescription drug bill that will help our seniors, saving a hundred billion dollars,” Daines said during an August debate against Bullock. “Now, this bill is feared by Big Pharma. I can tell you that. We got it passed.”
But the bill has stalled in the Senate because it lacks support from Senate Majority Leader Mitch McConnell. And Daines has been tight-lipped about his support for the Prescription Pricing for the People Act’s successor and competitor—the Lower Costs, More Cures Act.
The Lower Costs, More Cures Act is a watered-down version of the bipartisan Grassley-Wyden bill. It has drawn zero Democratic sponsors and is preferred by the Pharmaceutical Research and Manufacturers of America (PhRMA, for short), the powerful pharmaceutical trade group that lobbies Washington on behalf of drug companies. PhRMA spent over $29 million on lobbying in 2019, making it the fourth-highest spending lobby in the country.
Despite joining the Lower Costs, More Cures Act as a co-sponsor in July 2020, months after its introduction in December 2019, Daines has avoided talking about the bill, never issuing a press release about his support or mentioning it on his campaign website. Aside from Daines, none of the Republicans who supported the Grassley-Wyden bill sponsored the legislation.
Before endorsing the Lower Costs, More Cures Act, Daines, and his affiliated PACs received large donations from big pharmaceutical companies, a majority of which came before his sponsorship of the bill. He and his PACs accepted close to $120,000 this election cycle from pharmaceutical manufacturers, including $10,000 each from PACs associated with Genentech Inc., Merck and Co., and Pfizer Inc. PhRMA itself gave him $6,000, the sixth-largest donation by the group to a Senate Republican. The industry has climbed into Daines’ top 15 industry contributors this year, launching ahead of more typical players in Montana, such as the mining industry, the livestock industry, and the crop production and processing industry. Daines ranks eighth among sitting Senators in pharmaceutical contributions and fifth among Republicans.
Paul Herrnson, a campaign finance expert at the University of Connecticut, said the high profile of the Montana Senate race likely made Daines a target for Big Pharma. Most recent polling shows Daines just slightly ahead of Bullock, and more than $118 million has been poured into the state, making it the most expensive in Montana’s history. “If you create and cultivate a relationship with a powerful politician during a campaign, they’re likely to remember that,” Herrnson said. “This dynamic is probably playing out very strongly in the Montana race.”
A majority of the pharmaceutical money sent to Daines and his PACs came in the year between his vote for Grassley-Wyden and his sponsorship of the more feeble GOP bill. Campaign finance experts emphasized that no causation can be inferred between the donations and Daines’ position. But they said Daines’ increased contributions from pharmaceutical PACs and his endorsement of the Lower Costs, More Cares Act should raise eyebrows.
“That timeline is really very striking,” said Brendan Fischer, the director of federal reform at the Campaign Legal Center. “It would certainly appear that the Pharma industry saw Steve Daines as a target for political contributions and lobbying. It seemed that the Pharma industry’s contributions and lobbying efforts had some level of success.”
Daines’ campaign did not respond to requests for comment.
“Steve Daines is desperately trying to paper over his record of looking out for Big Pharma,” Montana Democratic Party spokesperson Christina Wilkes told me in a statement. “But when push comes to shove, he will always side with his corporate donors over hard-working Montanans.”
Drug policy reform has become a divisive issue within the Republican Senate Conference, whose members must weigh the popularity of lowering drug prices with their free-market ideology. And the Grassley-Wyden bill, according to Center for American Progress Health Policy managing director Maura Calsyn, is a modest proposal mostly aimed at insulating seniors. The bill would provide an out-of-pocket cap for prescription drug prices for Medicare beneficiaries at $3,100 for seniors. Additionally, the bill tries to combat price gouging by imposing rebate requirements. Under the bill, companies that raise the price of drugs authorized under Medicare Part B, which covers doctor and outpatient services, and Part D, which covers prescription drugs at a rate higher than inflation would be subject to the rebate. The Congressional Budget Office estimated the bill would save taxpayers roughly $100 billion over the next decade and save beneficiaries $27 billion in costs.
While Republicans like Grassley supported the bill, conservative opponents argued the rebates were tantamount to price controls. PhRMA argued the bill would siphon money from research and development efforts. Calsyn said this messaging is effective politically but demonstrably false.
Six Republican senators, including some Finance Committee members who voted against Grassley-Wyden, introduced the Lower Costs, More Cares Act, to the Senate in December 2019. The GOP bill does not include the inflation rebates and has not been scored by the CBO. Calsyn argued the GOP bill might actually cause prices to further increase for those on private insurance.
“Restructuring that Part D piece, it saves Medicare beneficiaries out of pocket costs,” Calsyn said. “But it actually could cost money overall because, by insulating seniors from the prices of the drugs, drug companies have a lot more incentive to raise the prices.”
The Lower Costs, More Cures Act has been supported by the Chamber of Commerce, the conservative American Action Network. It has even drawn some limited praise from PhRMA, which argued it “does more to begin to address patient affordability” than the Grassley-Wyden bill. Both the Chamber and PhRMA came out strongly against Grassley-Wyden. “PhRMA continues to support a balanced package that lowers costs for patients at the pharmacy counter and doesn’t include government price setting,” said a spokesperson for PhRMA.
House Democrats, for their part, have passed a bill that goes farther than either bill, allowing the federal government to directly negotiate the price of hundreds of drugs through Medicare, extending those negotiated prices to those on private insurance, imposing a $2,000 cap on out-of-pocket costs, and creating a maximum launch price for negotiated drugs.