Payer Lobbying May Pale Next to Pharma, but Experts Say Industry Still Packs Clout

While lobbying expenditures from the health care industry have been rising in recent decades, drugmakers and providers — not insurers — are the main drivers of that spending growth, according to recent research. Still, experts tell AIS Health, a division of MMIT, that the managed care sector’s influence over policy shouldn’t be underestimated.

“Overall, the fact that the industry keeps lobbying means that this investment has some good return; otherwise, they would have stopped,” says Ge Bai, Ph.D., a professor at Johns Hopkins University’s schools of business and public health.

The study, published on JAMA Health Forum in late October, used data from the organization OpenSecrets to examine federal lobbying activity in the health care sector from 2000 through 2020. It found that lobbying expenditures grew by more than 70% during that two-decade span across all four industry categories: pharmaceutical and health product manufacturers, providers, payers, and “other.”

That rise in lobbying spending was not uniform across health care industry categories. “While there’s certainly been growth in lobbying expenditures among payers, it’s not as steep as the degree of growth seen among health care providers or the pharmaceutical industry,” study coauthor Paula Chatterjee, M.D., tells AIS Health.

Payer-attributed lobbying grew from around $50 million in 2000 to just over $80 million in 2020, notes Chatterjee, who is an assistant professor at the University of Pennsylvania’s Perelman School of Medicine and an attending physician at Penn Presbyterian Hospital. By comparison, spending by pharmaceutical and health product manufacturers rose from about $150 million in 2000 to just over $300 million in 2020.

“It’s unsurprising to see providers and the pharmaceutical industry take an increasing role in government affairs over time, given how the government’s regulation over their business has intensified over the years,” says Lindsay Bealor Greenleaf, vice president of policy at the Washington, D.C., consulting firm ADVI Health.

Furthermore, “payers are much more consolidated as an industry than providers and drug companies overall, so…they can get a lot more bang for their buck from the lobbying angle, given there are fewer of them out there that have issues to bring to Congress,” she tells AIS Health. That could be why, as an industry, payers spend less than drug/health product manufacturers and providers, she suggests.

Will Payer Lobbying See Another Big Jump?

The study found that among payers, providers and pharma/health product manufacturers alike, lobbying expenditures hit a high-water mark right before 2010 — during the run-up to the enactment of the Affordable Care Act.

“While levels did come down a bit in first few years that followed passage, we do see continued growth in expenditures since 2015 for providers and pharmaceutical industry, though less so among payers,” Chatterjee says. Looking ahead, “it’s hard to speculate where the payer spending will go, but I imagine that if another piece of large, pertinent legislation were to be introduced in Congress, we would see similar degrees of mobilization in lobbying expenditures,” she tells AIS Health.

For the pharmaceutical industry, that blockbuster legislation arguably took the form of the Inflation Reduction Act (IRA), which included unprecedented levels of government drug price controls such as provisions allowing Medicare to negotiate the price of certain high-cost therapies. According to OpenSecrets, the pharma/health product industry so far this year has spent $281 million on lobbying as it aimed to stop — or at least influence — the legislation, which was ultimately signed into law in August.

Greenleaf suggests that health insurer lobbying might tick up as one specific part of the IRA is implemented through regulations: the provisions related to redesigning the Part D benefit structure. Health plans will be on the hook for a much larger share of seniors’ drug costs in the “catastrophic” phase of coverage once those provisions take effect, so “we would expect for them [plan sponsors] to be asking CMS to provide them with new flexibilities to account for that,” she says.

Both payers and drug manufacturers were also major players in a lobbying blitz that occurred in early 2020 as companies and their respective trade groups sought to influence Congress’ appropriation and allocation of COVID-19 relief. According to a 2020 study coauthored by Johns Hopkins’ Bai: “In Q1 2020, the health sector spent $248.4 million on lobbying and filed 357 new lobbying registrations, representing 22.7% of all lobbying and 22.6% of all new lobbying registrations, the highest totals and percentages among the nine consecutive quarters.” Pharmaceutical manufacturers accounted for 26.4% of COVID-related lobbying during that quarter, while health insurers represented 13.4%.

“It’s getting close to crony capitalism,” Bai says of the health care industry’s influence over policy. And she doesn’t anticipate that will change anytime soon. “Government regulations and laws play an important role in determining the revenue for health care firms, so the industry will consider lobbying or a [political] donation a very attractive investment opportunity.”

Trade Group Lured Back Wayward Members

As health plans seek to influence policy, they’ll have in their corner a trade group that has regained two out of three prominent members that made waves with their exits in the past decade. In 2015, UnitedHealth Group and Aetna, Inc. parted ways with AHIP, which now goes by just its acronym but formerly was known as America’s Health Insurance Plans. At the time, Aetna was in the midst of trying to acquire Humana Inc., although that transaction ultimately fell apart when a judge sided with the Dept. of Justice’s claim that it was anticompetitive.

Humana then confirmed in early 2018 that it had left AHIP, a move that came amid speculation that it might be acquired by a different insurer or retailer, although that transaction ultimately never materialized. However, both Aetna and Humana later rejoined AHIP, and Humana CEO Bruce Broussard became chairman of AHIP’s board of directors in 2020. CVS Health Corp. CEO Karen Lynch — a former top Aetna executive who took the helm at CVS after the firm bought Aetna — joined the AHIP board in 2021.

UnitedHealth — which has increasingly diversified its holdings to include a large health care services and delivery business — never rejoined the trade group and has become a lobbying force of its own right. While AHIP’s lobbying expenditures so far in 2022 have totaled $10.8 million, UnitedHealth’s spending is nearly half that, at $4.6 million, according to OpenSecrets data. Blue Cross Blue Shield affiliates, meanwhile, have together spent more than $20.6 million on lobbying so far this year.

According to the JAMA Health Forum study, across all types of health care organizations, a small number of organizations tend to spend the majority of lobbying dollars. The top 10% of firms were responsible for 70.4% of lobbying expenditures among payers between 2000 and 2020, while the top 10% of manufacturers and providers represented 69% and 59% of overall lobbying expenditures in those respective categories. The fact that a minority of firms spend a disproportionate amount on lobbying, the study authors wrote, “may lead to certain constituencies being underrepresented in the policy-making process.”

When asked what could be done to change that, Chatterjee tells AIS Health that “spending caps could be established and enforced.”

“Greater transparency about the relationships between legislators and lobbying organizations (particularly around pieces of legislation of specific interest to those organizations) would also help quantify the extent to which policy is shaped by the few lobbying interests where spending is most concentrated,” she adds.

Contact Chatterjee at pchat@pennmedicine.upenn.edu, Bai at gbai@jhu.edu and Greenleaf at lindsay.greenleaf@advi.com.

This article was reprinted from AIS Health’s weekly publication Health Plan Weekly.

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