PhRMA is going to have to write some big checks for lobbying

Richard A Meyer
3 min readAug 16, 2021

SUMMARY: President Biden wants to lower prescription drug costs. One of the ways to do this is by allowing Medicare to negotiate drug prices. While it has wide approval in Congress, you can bet that PhRMA is already writing checks to politicians to try and stop this logical move.

Healthcare costs in the US are out of control. A perfect storm of COVID, diabetes, and people delaying medical care. Even though prescription drug costs are only $.11 of every healthcare dollar spent, drug companies are an easy target to help reduce costs.

The Atlantics reported that “the Department of Health and Human Services estimates that Americans spent more than $460 billion on drugs-16.7 percent of total health-care spending-in 2016, the last year for which there are definitive data. On average, citizens of other rich countries spend 56 percent of what Americans spend on the same drug”.

PhRMA, of course, will counter this push by saying that drug companies need the money for R&D even though they used the recent Trump tax cuts to buy back stock and reward shareholders. More new drugs are being developed by smaller biotechs who big pharma companies are acquiring as their drug candidates move through clinical trials.

The Pharmaceutical Research and Manufacturers of America raised nearly $527 million last year and spent roughly $506 million, new tax returns obtained by OpenSecrets reveal. That’s a record haul for the organization, which is funded by the world’s most powerful pharmaceutical companies.

Forward-thinking pharma CEOs should be preparing their company for changes in healthcare that are inevitable. This means examining the organization and looking for ways to improve responsiveness. It does not necessarily mean laying off people.

Will DTC be cut?

I guess that it depends on the drug and the health condition in which the product competes. Recent research has shown that the one area where people don’t trust drug companies is costs. Even with decent insurance, co-pays can wipe out savings and put patients and caregivers in dire straits.

There is a lot more emphasis to show a true ROI on DTC marketing efforts when connecting the dots between awareness and asking for a new Rx has become difficult. The pandemic has led to more people using the Internet for health information, and they tend to “shop” for new drugs and listen to their experiences.

DTC managers will need to continually sell DTC budgets, with agency help, to management who is asking more in-depth questions about spending. I recently worked with a client to try and show the ROI of online pad media, and it wasn’t easy. Because of privacy issues, it’s almost impossible to show a direct correlation between online paid media and a new Rx.

Good managers know that there usually isn’t one DTC tactic that leads to a new Rx. DTC is best when it works together like a well-tuned engine. Testing new ways to reach potential customers is also getting harder as dollars are hard to come by.

I’ve said before that changes are on the horizon for healthcare and pharma. It is coming a lot faster now, and pharma has to be ready.

Originally published at on August 16, 2021.



Richard A Meyer

Marketing and Political thought leader — Writer- Audiophile