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Big Pharma changes spending amid pressure to charge less

Major firms spent less on lobbying in Q2 from Q1, which saw records, as Trump pushes them to lower drug costs

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.

New York

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 US$5.54 million between April and June, down 7.7 per cent 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 Mr Trump's moves to reduce out-of-pocket medicine costs.

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

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

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 programmes 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, Mr 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 Mr 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 US, while saying the company aimed to return to "value-based pricing". Novartis's spending on lobbyists decreased to US$860,000 from US$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 US$1.2 million to a consulting firm headed by Mr Trump's one-time personal lawyer, Michael Cohen, to gain insight into the administration's healthcare policy. The company's top lawyer stepped down over the arrangement, which Mr Narasimhan called a "mistake". BLOOMBERG

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