Showing posts with label corporatism. Show all posts
Showing posts with label corporatism. Show all posts

Tuesday, September 07, 2021

More Large Health Care Corporations Are Again Funding Politicians Who Threatened Representative Democratic Governance

Introduction: Health Care Corporations' Political Contributions: From Bipartisan to Trumpian

 At one time, leadership of large health corporations were circumspect in their financial support for US politicians and political causes. They provided some funds directly to politicians and political organizations, but often amounts given to different parties and organizations with different ideologies were balanced. Presumably, the goal was to promote access to whomever was in power at any given time. 


 

With the rise of Donald Trump, things changed. Many leaders apparently went all in for Trump and his Republican supporters.  In June, 2018  we discussed how CVS channeled money to a "dark money group," that promoted Trump administration policies, including repeal of the Affordable Care Act (ACA). In October, 2018, we discussed important but incomplete revelations about corporate contributions to such dark money groups that mainly favored again right-wing ideology, the Republican party, and Trump and associates. In November, 2018, we noted that health care corporations funneled funds through dark money organizations to specifically attack designated left-wing, Democratic politicians. In March, 2019, we discussed how in the 21st century, health care corporate CEOs' personal political contributions were increasingly partisan, that is individual CEOs gave predominantly or exclusively to one party, and for the vast majority, to the Republican party. 

Some corporations paused some of their political giving after a mob whipped up by Trump at a January 6, 2021, rally violently stormed the US Capitol to try to prevent the certification of the 2020 election. However, within two months they started giving again in support of Republicans in Congress who voted not to certify the election (see this April, 2021, post, and this July 7, 2021, post).

Now yet another report shows continuing support by large health care corporations for Republican legislators who supported the nullification of the election.

 Health Care Corporate Funding of Politicians Who Would Overturn an Election

On August 17, 2021, Popular Information published The January 6 Corporate Accountability Index.  It promised to be results of a comprehensive monitoring efforts of corporate pledges to make changes in their political giving to the "147 Republicans who voted to overturn the election, setting the stage for the riot." It included several categories of pledge violations.  Its results included some of the companies who went back on their pledges as described in our April and July posts.  It also included many more companies that did not make it to previous reports.  The relevant results by category were as follows

Corporations that pledged to suspend donations to the 147 Republican objectors but directly donated to those Republicans

Not included in previous reports: none

Included in previous reports: Cigna, Eli Lilly

Corporations that pledged to suspend donations to all 147 Republican objectors but violated the spirit of the pledge

Not included in previous reports: 

"After January 6, Genentech [part of the "Roche group'] said it would suspend contributions to Republican objectors. Genentech donated $15,000 to the NRCC and $15,000 to the NRSC on June 30."

"After January 6, Sanofi said it would suspend contributions to Republican objectors. Sanofi donated $15,000 to the NRSC on 3/17."

Corporations that pledged to suspend all PAC donations and then directly donates to the 147 Republican objectors

Not included in previous reports:

DaVita 

Included in previous reports: Abbott Laboratories, Gilead, Novo Nordisk

Corporations that pledged to suspend all PAC donations and then indirectly donated to the 147 Republican objectors

Not included in previous reports:

Baxter International

Included in previous reports: United Healthcare

Corporations that pledged to reevaluate their donation criteria after January 6 and directly donated to GOP objectors

Not included in previous reports:

Amgen, Laboratory Company of America

Corporations that pledged to reevaluate their donation criteria after January 6 and then indirectly donated to the 147 Republican objectors

Not included in previous reports: none

Included in previous reports: CVS

Discussion

As we said before, most health care corporations publish high-minded aspirational statements that promise pluralism, support of the community, and of our representative democratic society.  For example, Sanofi Pasteur claims:

Sanofi’s social impact strategy aims to build a healthier, more resilient world by ensuring access to healthcare for the world’s poorest people
However, the new data revealed above, and data discussed in our two previous posts showed that leaders of  more and more large health care corporations saw fit to direct contributions to politicians who promoted anti-democratic policies. Funding political leaders who would challenge election outcomes in the absence of very clear evidence of election irregularities seem s to violate high-minded corporate pledges of inclusiveness like those above.   

Is it that health care corporate leadership just are more interested in making money than in bettering society, despite their aspirational mission statements? As we previously discussed, that is a plausible formulation.  For example, per the Washington Post in January, 2021,

'Their attitude was: ‘Let’s take the big tax cuts and hold our noses for the obvious xenophobia and authoritarianism.’ It was a classic Faustian bargain,' said Rep. Brendan Boyle (D-Pa.), a member of the House Ways & Means Committee.

On the other hand, maybe it is not just about money.  Again, as we said before, by virtue of being top managers corporations, particular individuals can control political funds far beyond what they would  be able to control as private persons, and to do so quietly and sometimes anonymously.  Corporate leaders may thus be able to promote their own interests through their corporations' political giving.  Those interests may go beyond just personal enrichment.   Some may also be interested in personal political power, or have other ways they might benefit from anti-democratic, authoritarian, even openly fascist national political leadership.  Big industrialists have backed authoritarian and openly fascist regimes in other countries before, some to make more money, but in retrospect, some for darker reasons. (See, for example, this article on how German industrialists financially bailed out the Nazi party in 1932.)

Leaders of large corporations now appear willing to wield large amounts of political power leveraged by the organizations they control.  Yet until recently they may have been able to do so without disclosure to society at large.  That society may be greatly affected by this power, but when it can be wielded quietly, have had little say in who has it and its uses.  

We as health care professionals, policy makers, patients and members of the public at large deserve to know how health care corporate leadership is directing money to political causes, and how they benefit from doing so. If they are not doing this in our interests, our we need to make sure things change.

Wednesday, July 07, 2021

Leadership of Big Health Care Corporations Go Back to Financially Supporting the Opponents of Democratic Governance

At one time, leadership of large health corporations were circumspect in their financial support for US politicians and political causes. They provided some funds directly to politicians and poltical organizations, but often amounts given to different parties and organizations with different ideologies were balanced. Presumably, the goal was to promote access to whomever was in power at any given time. 

With the rise of Donald Trump, things changed. Many leaders apparently went all in for Trump and his Republican supporters.  In June, 2018  we discussed how CVS channeled money to a "dark money group," that promoted Trump administration policies, including repeal of the Affordable Care Act (ACA). In October, 2018, we discussed important but incomplete revelations about corporate contributions to such dark money groups that mainly favored again right-wing ideology, the Republican party, and Trump and associates. In November, 2018, we noted that health care corporations funneled funds through dark money organizations to specifically attack designated left-wing, Democratic politicians. In March, 2019, we discussed how in the 21st century, health care corporate CEOs' personal political contributions were increasingly partisan, that is individual CEOs gave predominantly or exclusively to one party, and for the vast majority, to the Republican party. 


 

Some corporations paused some of their political giving after a mob whipped up by Trump at a January 6, 2021, rally violently stormed the US Capitol to try to prevent the certification of the 2020 election. However, within two months they started giving again in support of Republicans in Congress who voted not to certify the election (see this April, 2021, post).

Now two new reports show continuing support by large health care corporations for Republican legislators who also supported the nullification of the election, and legislation that might decrease voting by citizens who oppose Trump

Health Care Corporate Sponsorship of Voter Suppression

In April, 2021, Public Citizen published "The Corporate Sponsorship of Voter Suppression." It detailed support from direct corporate contributions and corporate political action committees (PACs) from 2015 through March, 2021, to state legislators who authored, sponsored or voted for 245 bills that could have made it more difficult for citizens to vote in elections. 

The 25 companies contributing the largest amounts of money to these legislators included UnitedHealth Group ($411,200 total); Pfizer ($308,085); and Centene Corp ($205,200).  Companies that gave somewhat less included Merck ($180,000),  CVS ($174,000), Anthem ($138,150) Eli Lilly ($124,000) and Cigna ($109,225).

Two health care related trade groups also gave significant funds to these legislators: the Virginia Dental Association ($223,000) and the  Pharmaceutical Research and Manufacturers Association of America/PhRMA ($200,000).   

Note that the data did not include personal contributions from corporate leaders, and could not include corporate money directed to dark money organizations that ended up supporting these legislators.

Health Care Corporate Sponsorship of the Attempt to Overturn the 2020 Election

In June, 2021, Citizens for Responsibility and Ethics in Washington (CREW) published "This Sedition is Brought to You By..." It detailed contributions from corporate PACS and trade groups to those in the US Congress who voted against certifying the results of the 2020 election and the two main party organizations that supported them, the National Republican Senatorial Committee (NRSC) and National Republican Congressional Committee (NRCC) since the vote not to certify.  

The largest contributions from health care corporate PACs included those tied to Fresenius Medical Care Holdings ($76,000); CVS ($45,000); Cigna ($42,500); Johnson & Johnson ($30,000); Pfizer ($20,000); and Humana ($15,000).

Note that the data also did not include contributions from corporate leaders, and could not include corporate money directed to dark money organizations that ended up supporting these legislators. 

Discussion

Most health care corporations profess to missions that are pluralistic and support the community and society as a whole.  For example, Pfizer's mission statement includes:

We partner with governments, non-profits, and other organizations to ensure that more people around the world have access to the medicine and resources they require.

UnitedHealthCare's mission statement includes:

UnitedHealthcare is dedicated to helping people live healthier lives and making the health system work better for everyone

Merck's mission statement includes:

We demonstrate our commitment to patients and population health by increasing access to health care through far-reaching policies, programs and partnerships

However, leaders of some large health care corporations saw fit to direct contributions to politicians who promoted anti-democratic policies. Funding political leaders who would restrict voting rights in ways likely to impact already disadvantaged groups, and challenge election outcomes without strong evidence of irregularities would seem to violate high-minded corporate pledges of inclusiveness like those above.    

Is it that health care corporate leadership just are more interested in making money than in bettering society, despite their aspirational mission statements? As we previously discussed, that is a plausible formulation.  For example, per the Washington Post in January, 2021,

'Their attitude was: ‘Let’s take the big tax cuts and hold our noses for the obvious xenophobia and authoritarianism.’ It was a classic Faustian bargain,' said Rep. Brendan Boyle (D-Pa.), a member of the House Ways & Means Committee.

However, there are problems with this formulation.  As we wrote before,  it is obvious why a pharmaceutical company might want to defeat legislation that would lower its prices or raise its taxes.  It is not obvious why it would want to consistently support actions by one party, or by people at one end of the political spectrum, even if some such people seem generally "pro-business."  After all, for years big corporations and their executives openly gave money to both US parties and their candidates, apparently in the belief that this would at least allow more visibility for the corporations' priorities no matter who was in power.

Maybe it is not just about money.  Again, as we said before, by virtue of being top management of a corporation, particular individuals can control political funds far beyond what they may be able to control as private persons, and to do so anonymously.  It may be that top corporate leaders are not just interested in making more money.  Some may also be interested in personal political power, or have other ways they might benefit from anti-democratic, if not openly fascist national political leadership.  Big industrialists have backed authoritarian and openly fascist regimes in other countries before, some to make more money, but in retrospect, some for darker reasons. (See, for example, this article on how German industrialists financially bailed out the Nazi party in 1932.)

At least health care professionals, policy makers, patients and the public at large deserve to know how health care corporate leadership is directing money to political causes, and how they benefit from doing so. 

 

    

Sunday, April 04, 2021

A Few Leaders of Big Health Care Corporations Hesitate in Their Support of Extreme Politics and Insurrection, But Will Anything Really Change?

 Some recent but not well publicized articles suggests how big health care corporations are still enabling some of the worst aspects of health care and larger political economic dysfunction.

Introduction - Health Care Corporate Political Donations Become More Partisan and Ideological

A long time ago in a galaxy far, far away big health care corporations in the US had an apparently straightforward philosophy of political giving.  They gave contributions more or less equally to both major political parties.  Apparently the theory was that the corporate giving would be remembered favorably by whoever won elections and got governmental power.  Corporate contributions raised major concerns about their ability to purchase access and influence policy far beyond those of less wealthy groups and the public at large.  At least, however, it was overtly non-partisan, and ostensibly not ideological.

However, things changed, and health care (and larger corporate) political giving became more partisan, and and more ideological. As we discussed here

- In June, 2018, we first noted how the huge pharmacy chain CVS, had been secretly making contributions to America First Policies, an ostensibly non-profit organization.  CVS claimed that it helped fund AFP because it supported tax reform.  Actually, AFP acted to promote Trump administration policies. AFP encouraged repeal of the Affordable Care Act (ACA), and building a wall on the US southern border.  These seemed at odds with CVS claims about its social responsibility.  


- In September, 2018, we noted that big health care corporations often make high-minded public pledges about supporting patients' and the public's health, and sometimes social responsibility, but have been found to be covertly supporting policy initiatives that seemed to subvert these goals, using "dark money."  The dark money groups they used to channel this money often had explicitly partisan leadership and direction, usually right-wing and Republican.


 

- In October, 2018, we discussed important but incomplete revelations about corporate contributions to such dark money groups that mainly favored again right-wing ideology, the Republican party, and Trump and associates.

- In November, 2018, we noted that health care corporations funneled funds through dark money organizations to specifically attack designated left-wing, Democratic politicians.

- In March, 2019, we discussed a study of the personal political contributions of CEOs of large corporations.  In the 21st century, the CEOs' contributions were increasingly partisan, that is individual CEOs gave predominantly or exclusively to one party, and for the vast majority, to the Republican party. 

- In October, 2020, we discussed the apparent relationship between the support to Trump provided by large pharmaceutical corporations and his inclination to outsource his coronavirus pandemic management to them. 

Corporate leadership's enthusiasm for Trump, his policies, and his associates seemed to arise from  economic interests of the corporations and the self-interest of their top management, but without consideration of how Trump and associates' actions may have harmed larger corporate, social, or national interests.  As discussed in a Washington Post article on January 8, 2021:

Business groups big and small largely stuck by Trump as he broke one norm after another over the past four years, including insulting immigrants, appearing to empathize with white supremacists in Charlottesville and clearing a Black Lives Matter protest in Washington for a photo op. They stuck by him still after he pressured the Ukrainian president in a bid to help his own election chances, after his impeachment, after he intentionally downplayed the effects of the novel coronavirus and last week after he was recorded pressuring the Georgia secretary of state to overturn the election results.

Even Trump supporters admitted the corporate leaders' extreme compartmentalization:

'It isn’t going to affect tax rates. How about monetary policy? Allow me to stay pure to my turf,' Art Laffer, a supply side economist who is close with White House economic officials and speaks to the president, said in a brief interview.

One observer described their thinking thus:

'Their attitude was: ‘Let’s take the big tax cuts and hold our noses for the obvious xenophobia and authoritarianism.’ It was a classic Faustian bargain,' said Rep. Brendan Boyle (D-Pa.), a member of the House Ways & Means Committee. 'They should have known from the beginning.'

However, the Trump administration's actions and policies often seemed to directly contradict the stated values, visions and missions of health care corporations.  For example, Pfizer declares its values to be:

customer focus, leadership, quality innovation, collaboration, respect for people, integrity, and performance

How would the value "respect for people" align with Trump's hostility toward immigrants, or sympathy for white supremacists?  How would the value "integrity" align with Trump's pressure on the Ukraine to influence his election, or his pressure on officials in the state of Georgia to alter the election results in his favor?  

Nonetheless, until very recently, hardly anyone seemed to notice that large health care corporations had changed their political giving so as to make its effects antithetical to the corporations' declared principles and values.  

Trump's Attempt to Overturn the 2020 Election Inspire A Few in Corporate Leadership to Rethink Its Political Support for Him and His Associates

Yet things apparently changed after Trump's attempts to overturn the election, including claims that he actually won despite obvious evidence to the contrary, baseless legal challenges to the election results that were almost all dismissed by the courts, and an attempt by Trump supporters in Congress to challenge and possibly override the election results in congressional proceeding.  That crossed a line.

Within days, corporate leaders who had generally been quiet about Trump administration's actions and policies that ran counter to their organizations' stated goals and mission began to speak up.  Several hundred signed a statement:  

Congress should certify the electoral vote on Wednesday, January 6. Attempts to thwart or delay this process run counter to the essential tenets of our democracy.

Most of those who signed lead financial firms, but the list did include Albert Bourla, CEO of Pfizer, a firm that had been one of Trump's favorites (see above).

Then, Trump's exhortation to his supporters at a rally to march on the Capitol while congress was debating Trump's supporters' challenge to the election results, which led to an insurrection and armed occupation of the Capitol building,  which was eventually beaten back by law enforcement with significant casualties led some corporate leaders to rethink their positions. 

The next day, per the Washington Post:

The mob scenes at the Capitol attracted harsh and unusual criticism from business groups, including the chief executive of one of the nation’s largest banks saying he is 'disgusted' and a manufacturing trade group calling it 'sedition' and suggesting that President Trump must be removed from office immediately.

It was a stunning series of rebukes for a president who had received widespread support from corporate America for most of his turbulent term, especially for his efforts to cut government regulations and reduce corporate tax rates.

But what occurred Wednesday seemed finally to be too much. Trump staged a rally in Washington a short walk from where Congress was counting the electoral college votes, with Trump whipping up his followers with fabrications about election results and urging them to march to the Capitol to protest. Later, Trump appeared to sympathize with the mob and support the violent actions.

 The National Association of Manufacturers soon after released an extraordinary statement from its president, Jay Timmons, saying Vice President Pence 'should seriously consider working with the Cabinet to invoke the 25th amendment to preserve democracy.'

At that time, one more CEO of a pharmaceutical company that had been one of Trump's favorites spoke up:

Alex Gorsky, the chief executive of Johnson & Johnson, said in a statement that he is 'devastated by this assault on what our country has stood for since its founding: free, fair and peaceful elections.' He said it is time to stand for unity, 'not face-to-face in conflict — and to chart our path to a better and healthier future.'

Furthermore, some large corporations, including health care corporations, announced a review or freeze on political donations through their corporate political action committees (PACs). Per the New York Times, January 11, 2021:

A flurry of companies have since reviewed political giving via their corporate political action committees.... Blue Cross Blue Shield, Boston Scientific... are taking a similar, targeted approach to donation freezes.

On January 12, 2021, StatNews summarized responses by health care corporations:

 The list, so far, is short: the Blue Cross BlueShield Association, an insurer federation, said this week it would pause contributions specifically to candidates who effectively voted to overturn the results of the U.S. presidential election.  Drug manufactures Gilead Scientific and Amgen, as well as BIO, the biotech lobbying group, said they would pause contributions to all candidates regardless of how they voted on election certification, according to spokespeople.  UnitedHealth Group and Boston Scientific, the medical device giant, said the same.

Others, like CVS Health and the insurance lobby group America's Health Insurance Plans, were more cautious, saying they would review their future giving.

However,

Many other health care corporations and lobby groups... have not responded publicly.

The article also noted:

Many of the GOP lawmakers who voted against certifying the Electoral College results are those whom the drug industry and other health care sectors have long viewed as allied.  

The list included Republicans in Congress whom may be regarded as extreme supporters of Trump, eg Rep Devin Nunes (R-CA), and Rep Andy Harris (R-MD).

I found one other report of a big health care corporation which changed its political donation policy in response to the attempt to overturn the election.  Per the Kansas City Star, January 13, 2021:

Cerner Corp. will suspend political donations to Sen. Josh Hawley and other politicians who it determines helped to incite the violent mob that attacked the U.S. Capitol building last week.

The North Kansas City-based healthcare IT firm is the latest to seek distance from Hawley, a Missouri Republican, and others who have supported baseless allegations of voter fraud in the November presidential election. 

A company spokesperson said:

'Effective immediately, Cerner PAC will suspend contributions to any candidate or official who took part in or incited violence last week in Washington, D.C.,' the statement said. 'Focusing on the health and well-being of the American people transcends partisan politics, and we will continue working with all elected leaders to advance policies that put the patient at the center of their care.'

I found another report of a big industry group which planned a "review" of its giving.  The American Hospital Association announced on January 14, 2021:

The tragic events last week at the U.S. Capitol were an assault on our democracy. This prompted the AHA to begin an immediate review of our political giving practices to ensure they are guided by our Association’s vision and mission, as well as the democratic values we share as a nation.

But that was it, a total of six large health care corporations and three industry groups announced a pause or review of political contributions (apparently limited to those from corporate PACs) to some of the politicians who voted to challenge the election results.  The Potter Report, authored by health care insurance whistle blower Wendell Potter, noted

There’s been a lot of talk this week about big corporations such as Amazon, Verizon and Comcast deciding to stop giving money to House and Senate Republicans who voted to overturn last year’s election. 

Guess which giants aren’t on that list? America’s big for-profit health insurers

Over the past two election cycles, Big Insurance has donated to just about all the 147 House and Senate Republicans who voted against certifying the election. That includes Cigna and Humana, where I once worked, and Centene and CVS/Aetna. Plus, the industry’s lobbying group, the American Health Insurance Plans (AHIP).

 The Blue Cross Blue Shield Association, which represents a lot of nonprofit insurers and for-profit Anthem, says it’s suspending donations to those Republicans. And UnitedHealth says it will 'pause' its political donations. But let’s see how long these 'pauses' actually last. 

So far, we haven’t heard a peep from AHIP or the other big for-profits, all of which have made huge profits during the pandemic, thanks largely to having lawmakers on both sides of the political aisle in their pockets. 

Big Insurance donated more than $9 million to House and Senate candidates during the 2020 cycle. Among their favorites? Ted Cruz and Josh Hawley, who led the effort to overturn the election. All the big for-profits donated to Cruz, and all but CVS/Aetna donated to Hawley. 

Note that no health care corporation announced changes in the donations by its top management.  Certainly none even mentioned political contributions through dark money groups (like those that CVS had been revealed to be making, see above).  So the attempt at overturning the election to keep Trump in office, first by quasi-legal maneuvering, then by an armed insurrection, had little effect on continuing underwriting by big health care corporations of the politicians who acquiesced to or actively supported this assault on the fundamentals of our representative democracy 

Two Months Later, Health Care Corporations "Back to Bankrollling Insurrectionists"

Within months, some of the few health care corporations who paused donations again seemed ready to cozy up to anti-democratic politicians.  As reported by the Daily Beast, March 24, 2021:

After the Jan. 6 insurrection, more than 120 corporations swiftly vowed to suspend campaign donations to Republicans who objected to certifying the 2020 election....

But it took less than two months for Pfizer to break that pledge. Their PAC gave $15,000 to the National Republican Senatorial Committee, led by one of eight GOP Senators who voted to decertify election results—Rick Scott of Florida—on Feb. 23.

In total, The Daily Beast identified four companies that appear to have gone back on their suspension of donations to GOP election objectors: AT&T, Cigna Health, Ford Motors, and Pfizer.

[Note that I had not earlier found notice that Cigna Health, a for-profit insurance company, had suspended donations.]

Summary

So as far as I can tell, while Trump is out of office, the big health care corporations that provided plentiful financial support for his initial election and attempts at remaining in office, through electoral and anti-democratic means, are back to supporting the political party that has become his personal sandbox.

 It is increasingly evident that big health care corporations, despite their protestations of social responsibility and non-partisanship, now are actively supporting one wing, an extreme one, of the political spectrum.  This raises big questions: cui bono? Who benefits?

It is obvious why a pharmaceutical company, for example, might want to defeat legislation that would lower its prices or raise its taxes.

It is not obvious why it would want to consistently support actions by one party, or by people at one end of the political spectrum, even if some such people seem generally "pro-business."  After all, for years big corporations and their executives openly gave money to both US parties and their candidates, apparently in the belief that this would at least allow more visibility for the corporations' priorities no matter who was in power.

Now, the most obvious theory is that the new practice of secret donations only in right-wing, Republican, pro-Trump, and/or anti-democratic directions, which must be orchestrated by top corporate management, and which are not disclosed to employees or smaller corporate shareholders, are likely made to support the top managers' self interest more than the broad priorities of the corporations and their various constituencies. By virtue of being top management of a corporation, particular individuals can control political funds far beyond what they may be able to control as private persons, and to do so anonymously.  This could present many temptations, but the rationales for particular managers directing their corporations' fund to particular politicians or organizations remain unknown.  

Thus not only is more investigation needed, at the very least, "public" corporations ought to fully disclose all donations made to outside groups with political agendas.  This should be demanded by at least the corporations' employees and shareholders, but also by patients, health care professionals, and the public at large. Furthermore, it is not unreasonable to ask that all organizations disclose all political funding which allows their leaders and managers to leverage their own political intentions.

Meanwhile we are left with the suspicion that top health care corporate management is increasingly merging with the Trumpist movement in one giant corporatist entity which is not in the interests of health care, much less government by the people, of the people, and for the people.

 

ead more here: https://www.kansascity.com/news/politics-government/article248457745.html#storylink=cpy

 


Read more here: https://www.kansascity.com/news/politics-government/article248457745.html#storylink=cpy

 


 

Wednesday, November 07, 2018

Pharmaceutical and Other Health Care Corporations Funnel Dark Money to Republicans to Defeat "Leftward" Democratic Candidates - Partisanship Trumps Social Responsibility


Introduction - Health Care Corporations Profess Social Responsibility

As we noted recently, large health corporations, which must deal with patients, health professionals, and government regulators, usually profess their social resonsibility.  For example,

Biotechnology firm Genentech, now a subsidiary of giant Swiss biotechnology and pharmaceutical company Roche, has an elaborate web page about how the company seeks to do good.  Some quotes:

we’re passionate about applying our skills, time and resources to positively impact the patients we serve, the scientific community and the places where we live and work.

Also

We approach giving back the same way we approach discovering medicines: we start by looking for the root cause of a problem and then we explore how we can contribute to a solution.

And particularly

We believe that the best work happens when everyone has a voice.

Similarly, giant American pharmaceutical company Eli Lilly espouses these core values

Three long established core values guide Lilly in all that we do:

Integrity: We conduct our business consistent with all applicable laws and are honest in our dealings with customers, employees, shareholders, partners, suppliers, competitors and the community.

Excellence: We pursue pharmaceutical innovation, provide high quality products and strive to deliver superior business results.

Respect for People: We maintain an environment built on mutual respect, openness and individual integrity. Respect for people includes our concern for all people who touch or are touched by our company: customers, employees, shareholders, partners, suppliers and communities.

Of course, in the policy arena, large health care corporations also tend to advocate for policies that are to their financial advantage.  Furthermore, top executives of large corporations have been known to donate to political candidates who favor their policy positions, although they used to consciously spread their donations out to all parties and many candidates to avoid any appearance of partisanship, while making themselves visible to whomever might be in power.

However, as the current US political chaos leads to more journalistic investigation, there is increasing evidence that large health care corporations have been secretly backing policy positions that do not correspond to their high-minded public statements about corporate social resonsibility, and are becoming quite political, even partisan in the process.  They do so through the use of dark money




Pharmaceutical Companies, Other Health Care Companies - and a Tobacco Company - Join Effort to Attack Left-Wing Politicians

On November 5, 2018, Lee Fang wrote about how big corporations, including big health care corporations, enthusiastically financially supported a dark money operation that specifically targeted "progressive" or "socialist" candidates:

Republican operatives and representatives from America’s largest business groups — alarmed at a wave of upset electoral victories by Alexandria Ocasio-Cortez and other avowed democratic socialist candidates — have been plotting to stem the tide of left-wing Democrats sweeping the country.

Andrew Wynne, an official at the Republican State Leadership Committee, spoke to business lobby leaders in July, encouraging them not to ignore the latest trends within the Democratic Party. He called for Republicans’ allies to enact a unified plan to defeat progressives in this week’s midterm elections.

'Recent elections have proven the leftward shift,' said Wynne. 'An anti-free market, anti-business ideology has taken over the Democratic Party, particularly this year during the primaries.'

Wynne was particularly exercised about the primary victory by Democrat Alexandia Ocasio-Cortez:

'Alexandria Ocasio-Cortez captured the energy of these voters to win a congressional nomination in New York, defeating the incumbent who many thought could be the next Democratic speaker of the House,' Wynne continued.

He noted that the defeated incumbent in the Ocasio-Cortez race, Rep. Joe Crowley, a moderate Democrat and former chair of the business-friendly New Democrat Coalition, 'was someone who the business community could have a conversation with on the Democratic side.' On the other hand, Wynne warned, Ocasio-Cortez would not be so receptive to business lobbyists.

Of course, these sentiments coming from a Republican operative are not surprising.  What was surprising was how Mr Wynne wanted to fund efforts to comabt these supposedly left-wing politicians.

Officials from the Republican State Leadership Committee, which assists Republicans in capturing power on the state level, explained during the call that they expected to raise $45 million in direct contributions and $5 million to $7 million through an allied dark money group for election campaigns this fall.

The group is organized under the IRS’s 527 rules and operates in a manner similar to Super PACs: It can raise and spend unlimited amounts from individuals and corporations. The latest disclosures suggest the group is well on track to bring in significant corporate support for electing Republican state officials.

Koch Industries, Crown Cork & Seal, Genentech Inc., ExxonMobil, NextEra Energy, Range Resources, Eli Lilly and Co., Marathon Petroleum, Reynolds American, (a tobacco company which is a subsidiary of British American Tobacco), Boeing, General Motors, and Astellas Pharma are among the companies that have already provided at least $100,000 to the committee.

Many of those companies are from industries that have long contributed to GOP causes, including resource extraction, financial services, tobacco, retail, for-profit education firms, and private health care interests.

Furthermore, the Republican State Leadership Committee has been collecting money from other dark money organizations which in turn are funded in part by health care companies:

Several of the largest donors to the Republican State Leadership Committee are themselves dark money groups. The Judicial Crisis Network, a 501(c) nonprofit that does not disclose its donors, has given $1.5 million to the group. The ABC Free Enterprise Fund, a dark money affiliate of a lobbying group that represents non-union construction companies, gave $100,000.

The U.S. Chamber of Commerce has given $1.7 million to the committee. The chamber, notably, does not disclose its donors but has been financed in the past by Goldman Sachs and Dow Chemical, among other major American and foreign companies.

We recently discussed the health care industry contributions to the US Chamber of Commerce, which came from PhRMA, Pharmaceutical Research and Manufacturers of America, the pharma trade association, and from specific companies, including contributions of at least $100K from: Aetna, Abbott Laboratories, AbbeVie, Amgen, Anthem, Celgene, Cigna, CVS, Eli Lilly, Express Scripts, Johnson & Johnson, Merck, Mylan, Procter & Gamble, and UnitedHealth.

So a lot of big health care companies, most of whom profess their devotion to the greater community and social responsibility, have been funneling considerable money as quietly as possible into an effort to thwart one particular group of politicians, that is, candidates from the leftish wing of the Democratic party.

So much for Genetech's claim:


We believe that the best work happens when everyone has a voice.

Or for Lilly's claim:

Respect for people includes our concern for all people who touch or are touched by our company: customers, employees, shareholders, partners, suppliers and communities.
 
Discussion and Summary

This is now the fifth time we have discussed the role of dark money in health care.

- In 2012 we discussed a case of "dark money" being used to conceal sources of support for particular health policy and political positions.

- Earlier this year,  we discussed the case of huge pharmacy chain CVS,which proclaims its "social responsibility," and its policy of only making charitable contributions to improve "health and healthcare nationwide."  Yet CVS was donating to America First Policies, a supposed non-profit group devoted to promoting the partisan agenda of President Trump, including "repealing and replacing Obamacare," and immigration policies such as building the "wall" and deporting  "illegal immigrants." (Note that these CVS dark money contributions were separate from those discussed above.)

- In September, we discussed how the pharmaceutical trade organization, PhRMA, and some large drug companies donated money to a dark money organization to combat a state initiative to limit pharmaceutical prices, but also to the American Action Network (see above) to "repeal and replace" the Affordable Care Act (ACA, "Obamacare") despite their previous support for and then current neutrality on the ACA.

- In October, we discussed how many health care corporations were donating to dark money groups, predominantly groups, like the US Chamber of Commerce, devoted to distinctly right-wing causes, almost all lately related to the Republican party and in sympathy with the Donald Trump regime.

Health care corporations recent and current funding of dark money groups seems to openly conflict with the corporations' promises of social responsibility.  The slanting of these efforts towards one end of the political spectrum, one party, and now the current president suggest that these corporations may have partisan agendas.

Note that without the various ongoing investigative efforts mainly inspired by the actions of the Trump administration, we would have little idea that this was going on.

May such investigations continue and intensify.  Maybe the recent elections, which gave the opposition to the Republican party and Trump control of the US House of Representatives, will lead to more such investigations.

Furthermore, the increasing knowledge of these corporate actions raises a big question: cui bono? who benefits?

It is obvious why a pharmaceutical company, for example, might want to defeat legislation that would lower its prices.

It is not obvious why it would want to consistenly support actions by one party, or by people at one end of the political spectrum, even if some such people seem "anti-business."  After all, for years big corporations and their executives openly gave money to both US parties and their candidates, apparently in the belief that this would at least allow more visibility for the corporations' priorities no matter who was in power.

Now, the most obvious theory is that the new practice of secret donations only in right-wing, Republican, and/or pro-Trump directions, which must be orchestrated by top corporate management, and which are not disclosed to employees or smaller corporate shareholders, are likely made to support the top managers' self interest more than the broad priorities of the corporations and their various constitutencies.

Thus not only is more investigation needed, at the very least, "public" corporations ought to fully disclose all donations made to outside groups with political agendas.  This should be demanded by at least the corporations' employees and shareholders, but also by patients, health care professionals, and the public at large.

Meanwhile we are left with the suspicion that top health care corporate management is increasingly merging with the current administration in one giant corporatist entity which is not in the interests of health care, much less government by the people, of the people, and for the people.


Wednesday, October 10, 2018

The Politicization of Pharma, and Other Health Care Corporations - Walk on the Dark (Money) Side

Introduction - Health Care Corporations Profess Social Responsibility

As we noted recently, large health corporations, which deal with patients, health professionals, and government regulators, usually profess their social resonsibility.  For example,

Giant health care insurance company Aetna advertises its social corporate responsibility, including

As a health care leader, we believe that our corporate responsibility starts with helping people live healthier lives. And that means using our resources to make the communities and world we live in better places.

and,

Our social responsibility efforts encompass how we treat our employees, improve the lives of customers, and effect positive change in community health.
Similarly, giant pharmaceutical company Merck advertises its corporate social responsibility,

Corporate responsibility is at the heart of our company's mission to discover, develop and provide innovative products and services that save and improve lives. It underscores our commitment to developing and rewarding our employees, protecting the environment, and operating with the highest standards of ethics and transparency.

Of course, in the policy arena, large health care corporations also tend to advocate for policies that are to their financial advantage.  Furthermore, top executives of large corporations have been known to donate to political candidates who favor their policy positions, although they often seemed to consciously spread their donations out to avoid any appearance of partisanship.

However, as the current US political chaos leads to more journalistic investigation, there is increasing evidence that large health care corporations have been secretly backing policy positions that do not correspond to their high-minded public statements about corporate social resonsibility, and are becoming quite political, even partisan in the process.  They do so through the use of dark money






Health Care Corporations Giving to Dark Money Organizations: Dark Money Illuminated

Dark money is meant to be secret, of course.  So it is not easy to find anything out about who gives to dark money organizations, and to whom they give in turn. 
 However, recently Issue One produced a report entitled "Dark Money Illuminated." It was based on an extensive attempt to pierce the veil hiding dark money. Its introduction states:

Dark money groups hold enormous sway over what issues are, and are not, debated in Congress and on the campaign trail. But the donors behind these groups rarely discuss their motivations for bankrolling these efforts, leaving the public in the dark about who funds these increasingly prominent and potent organizations.

To attempt to get the most accurate picture of the scope of dark money influence on US politics, its authors:

reviewed FEC filings, tax returns, annual reports submitted by labor unions to the Department of Labor, documents submitted to Congress by registered lobbyists, corporate filings, press releases and other sources.

This allowed them:

to be able to identify transactions — and donors — that have never previously been associated with these dark money groups.

So they were able to identify the 15 largest dark money groups in terms of donations received, and to get data on a substantial numer of donations to them, albeit likely only a fraction of the donations to dark money groups that have been made, from 2010 to 2017.  Health care corporations turned out to be major suppliers of funding to dark money group according to this data.  The report includes a summary of the top 67 donors to dark money groups, which included:

- Pharmaceutical Research and Manufacturers of America (PhRMA), the pharmaceutical industry trade association, donated over $13 million.

- Aetna, a large for-profit health insurance company, donated over $8.5 million.

- Merck, a large pharmaceutical firm, donated over $4 million.

- Anthem, a large for-profit insurance company, donated $2 million.

Perusal of the whole data base revealed significant donations by many more health care corporations (list below includes the three companies listed above).


Aetna - $3.3 million to the American Action Network

Express Scripts - $75K to Americans for Tax Reform

American Healthcare LLC - $5K to Patriot Majority USA

Abbott Laboratories  - $500K to US Chamber of Commerce (USCC)

AbbeVie - $250K to USCC

Aetna - $5.3M to USCC

Allergan - $55K to USCC

Amgen - $302K to USCC

Anthem - $2M to USCC

Celgene - $262.5K to USCC

Cigna - $325K to USCC

CVS - $825K to USCC

Eli Lilly - $350K to USCC

Express Scripts - $150K to USCC

Gilead - $13K to USCC

Johnson & Johnson - $475K to USCC

Merck - $4.4M to USCC

Mylan - $210K to USCC

Procter & Gamble - $500K to USCC

UnitedHealth - $252K to USCC

Zimmer Biomet - $75K to USCC

Where Does the Money Go?

As is evident above, health care companies donated to a limited number of the big 15 dark money organizations, the American Action Network, Americans for Tax Reform, Patriot Majority USA, but mostly the US Chamber of Commerce.

The first two organizations were all identified by Issue One as affiliated with right-wing / Republican/ pro-Trump causes.

American Action Network

the American Action Network was not publicly rolled out by high-profile Republicans until February 2010 — one month after the U.S. Supreme Court’s Citizens United decision.
The self-described 'action tank' was founded by veteran Republican fundraiser Fred Malek, the former Marriott Hotels president and CEO who has helped raise campaign cash for a number of GOP presidential candidates over the years.

Former Republican Sen. Norm Coleman of Minnesota served as the American Action Network’s first CEO and is still the chairman of the organization’s board of directors.

Brian Walsh — the former political director for the National Republican Congressional Committee who helped Republicans win control of the U.S. House of Representatives in 2010 — served as the president of the American Action Network between 2011 and 2015.

The group’s current executive director is Corry Bliss, who managed Ohio Republican Sen. Rob Portman’s successful re-election campaign in 2016.  


Americans for Tax Reform

Originally founded in July 1985 to promote President Ronald Reagan’s proposal for tax reform, Americans for Tax Reform remains a powerful lobbying organization today that also frequently spends money in elections to aid Republican candidates. The group’s founder and president is Grover Norquist, a conservative activist who once boasted that his goal was to get government 'down to the size where we can drown it in the bathtub.'

In 1994, Norquist was one of the co-authors of the 'Contract with America,' the campaign platform that helped the GOP win control of the U.S. House of Representatives for the first time in more than forty years and helped elevate Rep. Newt Gingrich (R-GA), another co-author, to the position of Speaker of the House.

Americans for Tax Reform’s primary advocacy tool is its 'Taxpayer Protection Pledge,' which asks politicians at the local, state and national level to “make a written commitment to oppose any and all tax increases.”

The third group, to which only one donor gave only $5K, was identified with Democratic / left-wing causes.

Patriot Majority USA

Patriot Majority USA, a 501(c)(4) 'social welfare' organization that often spends money in elections to aid Democratic candidates, was founded in March 2011 by political consultant Craig Varoga, a Democrat with strong ties to former Senate Majority Leader Harry Reid (D-NV). To wit: Varoga led an independent group that helped Reid win his contentious re-election race in 2010.

The fourth organization, the one to which most of the health care corporate donors gave the most money, is in a class of its own.  The Issue One description of it was

US Chamber of Commerce

the U.S. Chamber of Commerce ranks as one of the nation’s largest and most powerful lobbying groups, with an ornate headquarters in Washington, D.C., just a block from the White House.

A trade association organized under Section 501(c)(6) of the tax code, the U.S. Chamber of Commerce mostly endorses Republican candidates, although it occasionally supports business-friendly Democrats. The group says it represents more than 3 million businesses across the country and has a membership of approximately 300,000.

The USCC has received much - probably unwanted - publicity about its efforts to help President Trump's controversial nomination of Brett Kavanaugh to the Supreme Court.  An October 4, 2018, article in the Intercept included:

Business groups with interests before the U.S. Supreme Court have orchestrated a multifaceted campaign to pressure the Senate to swiftly confirm Judge Brett Kavanaugh to the nation’s highest court. The advocacy reaches across the influence economy of Washington, D.C., with the largest corporate lobbying groups and billionaires working in concert with Republican operatives to elevate Kavanaugh to a lifetime posting atop the judiciary.

Few businesses, however, have stamped their names on the effort. Most major corporations and wealthy donors are instead using 501(c) nonprofit groups that do not require donor transparency to air upward of $15 million in reported advertising spending in order to convince the public to support Kavanaugh’s nomination. Other conservative groups contributing to the ad war have not disclosed how much they are spending, likely bringing the total much higher.

Among the groups publicly campaigning for Kavanaugh to be confirmed are the giants of pro-business lobbying — organizations like the U.S. Chamber of Commerce and the Koch brothers-funded Americans for Prosperity. Lesser-known, business-funded political groups, such as the Republican Attorneys General Association, are also spearheading campaigns.

The article also said this specifically about the US Chamber of Commerce

The powerful lobby announced in August that it would mobilize support for Kavanaugh, claiming it would score support for Kavanaugh as a 'key vote' in evaluating members of Congress. The Chamber spends tens of millions of dollars every election cycle against lawmakers who cross them on major votes.

One wonders whether patients or health care professionals who must deal with large health care corporations have any idea that these companies are promoting partisian causes, mostly right-wing/ Republican/ pro-Trump causes?  One wonders whether the employees and small stockholders of these corporations likewise have any idea about this?

Summary and Discussion

This is now the fourth time we have discussed the role of dark money in health care.  In 2012 we discussed a case of "dark money" being used to conceal sources of support for particular health policy and political positions.  Earlier this year,  we discussed the case of huge pharmacy chain CVS,which proclaims its "social responsibility," and its policy of only making charitable contributions to improve "health and healthcare nationwide."  Yet CVS was donating to America First Policies, a supposed non-profit group devoted to promoting the partisan agenda of President Trump, including "repealing and replacing Obamacare," and immigration policies such as building the "wall" and deporting  "illegal immigrants." (Note that these CVS dark money contributions were separate from those discussed above.)  Ten days ago we discussed how the pharmaceutical trade organization, PhRMA, and some large drug companies donated money to a dark money organization to combat a state initiative to limit pharmaceutical prices, but also to the American Action Network (see above) to "repeal and replace" the Affordable Care Act (ACA, "Obamacare") despite their previous support for and then current neutrality on the ACA.

Now it appears that health care corporations often donate large amounts to dark money organizations, and as best as we can tell now, nearly all the donations and all the money go to organizations that support right-wing/ Republican/ and now pro-Trump causes.  Many of these causes seem to openly conflict with the corporations' promises of social responsibility.  The slanting of these efforts towards one end of the political spectrum, one party, and now the current president suggest that these corporations may have partisan agendas.

Note that without the various ongoing investigative efforts mainly inspired by the actions of the Trump administration, we would have little idea that this was going on.

I hope that such investigations continue.

Furthermore, the increasing knowledge of these corporate actions raises a big question: cui bono? who benefits?

It is obvious why a pharmaceutical company, for example, might want to defeat legislation that would lower its prices.

It is not obvious why it would want to consistenly support actions by one party, or by people at one end of the political spectrum.

The obvious hypothesis is that these donations, which must be orchestrated by top corporate management, and which are not disclosed to employees or smaller corporate shareholders, are likely made to support the top managers' self interest.

Thus not only is more investigation needed, at the very least, "public" corporations ought to fully disclose all donations made to outside groups with political agendas.  This should be demanded by at least the corporations' employees and shareholders, but also by patients, health care professionals, and the public at large.

Meanwhile we are left with the suspicion that top health care corporate management is increasingly merging with the current administration in one giant corporatist entity which is not in the interests of health care, much less government by the people, of the people, and for the people. 

===

Musical interlude: "On the Dark Side," Eddie and the Cruisers




Friday, September 04, 2015

Round and Round It Goes - Former US Secretary of Health and Human Services Joins Humacyte Board

The latest example of the health care revolving door was made barely public just before the US Labor Day holiday.  Per the Triangle Business Journal,

Humacyte Inc., a biotechnology company based in Research Triangle Park, has beefed up its board of directors by adding former U.S. Secretary of Health and Human Services Kathleen Sebelius and life sciences industry veteran Dale Sander.

The 11-year-old Humacyte develops novel human tissue-based investigational products that are being developed for potential commercialization for applications in regenerative medicine and vascular surgery. Sebelius adds a significant amount of heft to the company’s now eight-person board.

From 2009 to 2014, she served as the 21st Secretary of the HHS, leading the effort to pass and implement the Affordable Care Act. She’s also been named by Forbes as one of the 100 most powerful women in the world.

Prior to serving as secretary of HHS, Sebelius served as governor of Kansas, two terms as the Kansas insurance commissioner and four terms in the Kansas legislature.

'Secretary Sebelius is undoubtedly one of the most distinguished health care industry leaders of our time and we are honored to have her join our organization,' said Carrie Cox, chair and chief executive officer of Humacyte, in a statement. 'Her tenure in the public sector, and deep understanding of the rigors of the regulatory process and policy will provide unique perspective and insight to support our goals to improve care for Humacyte’s first application for patients with End Stage Renal Disease.'

Comments

I will just raise a tired, ironic eyebrow in response to a lawyer, politician, and government leader with no direct biomedical or health care training or experience, and no apparent health care industry experience being called a "distinguished health care industry leader."

The big issue here is, of course, the revolving door.

It now seems that any randomly selected top US government official who has responsibilities directly related to health care could turn out to be a past or future health care corporate lobbyist, consultant, board member, or executive.  The revolving door is now well established between the US government and the country's huge and growing corporate health care sector.  Recent (2015) examples include:
-  a former Director of the Center for Medicare and Medicaid Services who was a Columbia/ HCA executive and who became the CEO of America's Health Insurance Plans (a trade and lobbying group) (look here)
-  various officials involved trade agreements (that heavily affect health care) who came from or went to industry (look here).
-  some US Food and Drug Administration officials who were involved in the lax regulation of amphetamines in "natural" products who came from or went to the "natural" supplements industry (look here).
- Etc, etc, etc

But the latest example is a big one, since it involves the top US health care official, the Secretary of the DHHS.

As we have said endlessly, the ongoing and increasing revolving door phenomenon clearly suggests excess coziness between industry and government, now to the extent that industry and government leaders of health care are becoming interchangeable.  This suggests that health care is increasingly run by this cozy ingroup, who very likely put their own interests ahead of those of patients and the public.

This is at best crony capitalism, and makes a mockery of that famous sentence in President Lincoln's Gettysburg Address:

government of the people, by the people, for the people, shall not perish from the earth.

The revolving door is clearly a kind of conflict of interest.  Government officials who can look forward to extremely lucrative employment in health care industry (regardless of their actual experience in health care or the health care industry) may be much more inclined to seem friendly to the industry while in office.  Government officials who just came from industry are likely to maintain their industry mindset and be mindful of their industry friends.

Worse, some experts have suggested that the revolving door is in fact corruption.  As we noted here, the experts from the distinguished European anti-corruption group U4 wrote,

The literature makes clear that the revolving door process is a source of valuable political connections for private firms. But it generates corruption risks and has strong distortionary effects on the economy, especially when this power is concentrated within a few firms.

Finally, the revolving door on its currently massive scale starts to look like corporatism (or corpocracy), "the organization of society by major interest groups."  One variant of corporatism prominent in the last century was fascism (on the model of Mussolini in Italy).  Of course, many of us in the US ought to see corporatism as antithetical to how our government and society is supposed to function - supposed to function.

Thus, the revolving door in health care seems like it ought to bear scrutiny.    Yet most examples of the revolving door are very anechoic, being noted mainly in the business media, and usually barely there.  I have seen almost no notice of it in the health care, health policy, or medical literature.  (For example, so far Ms Sebelius' new job has appeared in a corporate press release and a single article in a local business newspaper, as far as I can tell.)

So once more with feeling...  The continuing egregiousness of the revolving door in health care shows how health care leadership can play mutually beneficial games, regardless of the their effects on patients' and the public's health.  Once again, true health care reform would cut the ties between government and corporate leaders that have lead to government of, for and by corporate executives rather than the people at large

Thursday, May 14, 2015

All the President's Trade Negotiators - Revolving Doors, Regulatory Capture, and Health Care Corporate Friendly Trade Agreements

This week's spectacle in Washington, DC was a nearly unanimous Democratic minority in the Senate blocking a proposal for expedited consideration of multinational trade agreements favored by the Republican majority, but also by the Democratic President and his trade negotiators (look here).  Democrats mainly based their actions on perceptions that the trade agreements favored multinational corporations  over people.

While trade agreements may seem to be another, albeit international species of wonkery, these agreements could have major effects on patients' and the public's health.  Since these concerns have been essentially ignored by the US medical and health care literature, (although they have appeared in UK journals, Australian, and New Zealand journals in English), they I will discuss them below. Worthy of further discussion is the possibility that these potential threats to health care and public health may arise not just from ideological disagreements, but also from health care corporations' increasing capture of government, facilitated by the conflicts of interest generated by the revolving door. 

Corporate Friendly Trade Agreements

The US has been negotiating two major multinational trade agreements, the Trans-Pacific Partnership (TPP) and the Transatlantic  Trade and Investment Partnership (TTIP) for years. 

In a March, 2014, commentary, renowned economist Joseph E Stiglitz summarized the objections to the these proposed trade agreements.  His greatest fears were that such agreements

will benefit the wealthiest sliver of the American and global elite at the expense of everyone else.


This seems surprising, since most people think of trade agreements solely in terms of their effects on tariffs, not a big concern for health care and public health professionals.  However, Stiglitz noted

Tariffs around the world are already low. The focus has shifted to 'nontariff barriers,' and the most important of these — for the corporate interests pushing agreements — are regulations. Huge multinational corporations complain that inconsistent regulations make business costly. But most of the regulations, even if they are imperfect, are there for a reason: to protect workers, consumers, the economy and the environment.

What’s more, those regulations were often put in place by governments responding to the democratic demands of their citizens. Trade agreements’ new boosters euphemistically claim that they are simply after regulatory harmonization, a clean-sounding phrase that implies an innocent plan to promote efficiency. One could, of course, get regulatory harmonization by strengthening regulations to the highest standards everywhere. But when corporations call for harmonization, what they really mean is a race to the bottom.

 In the US, and other developed countries, there are lots of regulations that have major effects on health care and public health.  Changes in these regulations, or their implementation, could have major effects again on health care and the public health.  So those interested in health care and public health ought to be concerned about how such trade agreements could affect such regulation.

International Tribunals Could Trump National Law
One of Stiglitz's concerns was  that the trade agreement would allow international tribunals that could override national law, particularly law promoting public health:

What we know of ... particulars [of the TTP] only makes it more unpalatable. One of the worst is that it allows corporations to seek restitution in an international tribunal, not only for unjust expropriation, but also for alleged diminution of their potential profits as a result of regulation. This is not a theoretical problem. Philip Morris has already tried this tactic against Uruguay, claiming that its antismoking regulations, which have won accolades from the World Health Organization, unfairly hurt profits, violating a bilateral trade treaty between Switzerland and Uruguay.

In fact, Philip Morris has also used such tribunals to overturn Australian laws meant to discourage smoking for public health purposes.  The details of the Philip Morris case summarized in May, 2015 in an article by Lauren Carasik in  Foreign Policy, show the major public health implications of such trade tribunals,

In 2011, Australia passed a tobacco-control law to discourage smoking. It required cigarettes to be sold in plain packages with prominent warnings, with brand information relegated to the bottom of the box. Touted as 'one of the most momentous public health measures in Australia’s history' by the country’s health minister, the law was meant to deter a habit that will ultimately kill 1.8 million current Australian smokers, according to a recent study. After the country’s highest court upheld the constitutionality of the anti-smoking law, tobacco giant Philip Morris claimed that it violated the company’s corporate rights and launched a suit using a little-known provision called investor-state dispute settlement (ISDS). The case is pending, as is a similar case against Uruguay. A similar tobacco-control measure in New Zealand is on hold pending the outcome of these cases.

So these examples suggest that national laws meant to promote the public health could be challenged in these trade tribunals by multinational corporations based on these laws' postulated effects on corporate profits, regardless of the laws' public health rationale or legality in their own countries. 


Furthermore, a letter to the Lancet(1) noted,

Investor state dispute settlement (ISDS) provisions allow investors to sue governments if policy changes or even court rulings substantially affect the value of their investment, yet do not allow governments to sue investors for breaching the right to health.   ISDS processes constrain governments' abilities to regulate on the basis of the precautionary principle, or even to implement health policies on the basis of established evidence. These processes can have a chilling effect on efforts to address key health issues, such as alcohol, the obesity epidemic, and climate change. In New Zealand, the fear of costly ISDS litigation is already constraining government regulation on tobacco plain packaging.

Thus, creation of such international tribunals could favor financial concerns of multinational corporations over individual countries' governments' attempts to promote health care or public health. So, while these undemocratic tribunals are touted as a way to reduce non-tariff trade barriers, an editorial in the British Medical Journal(2) asserted,

Yet these barriers are some of our most prized social and environmental standards, including regulations on food safety, pesticide residues, and toxic chemicals....

Not only would these tribunals we able to override national laws, their operation would lack procedural safeguards.  Demonstrating that opposition to these trade agreements is also multinational, an article in the UK Independent in October, 2014, noted,

Critics say the tribunals, held under the so-called Investor-State Dispute Settlement (ISDS) system, subvert democratic justice, giving power over foreign citizens to big companies. Hearings are held in private, in international courts at the World Bank in Washington DC, bypassing the legal system of the country being sued, meaning details are often impossible to uncover. In some cases the very existence of the case is not made public.

In addition, per the article in Foreign Policy,

Critics like Global Trade Watch, a division of Public Citizen, a consumer advocacy organization, say the ISDS system is anti-democratic. Sen. Elizabeth Warren (D-Mass.) called for the ISDS language to be stripped out of the deal, writing in the Washington Post in February, 'If a final TPP agreement includes Investor-State Dispute Settlement, the only winners will be multinational corporations.' The problem is that the ISDS system lacks many procedural safeguards fundamental to the rule of law. The tribunals, run by the World Bank and the United Nations, are three-judge panels composed of highly paid private lawyers picked from a limited pool by states and corporations; individual lawyers can switch between serving as judges and advocates on behalf of corporations in different cases. And there is no comprehensive code of judicial conduct guiding the panelists on matters such as conflicts of interest.

Although the panels adjudicate disputes worth millions or even billions of dollars, they are not accountable to any elected body. Moreover, there is no system of precedent binding judges to an established body of decision-making, making it difficult for the parties to discern the applicable standards and their likelihood of success. And finally, there are no appeals, either within the ISDS system or externally, on the merits of decisions. An annulment is only possible for limited procedural errors, and those proceedings are heard before a different panel drawn from the same pool of professionals.

Under the system, states are deprived of the right to resolve these disputes since corporations can proceed directly to the tribunals without exhausting domestic remedies. But this privilege is not reciprocal: Corporations are not subject to suit in the tribunals by those harmed by their actions. Foreign companies are thus granted expanded rights without corresponding responsibilities.

Finally, in May, 2015, the United Nations special rapporteur on promotion of a democratic and equitable international order suggested that the proposed international tribunals would undermine human rights and violate the UN charter (per this Guardian article).

Further criticism of the tribunals came from the UK Labour party Shadow Health Secretary (as of April, 2014) who felt it would leave British general practitioners "powerless to resist legal challenges from US health giants with huge financial resources in the event of a contractual dispute (per the Independent).

To summarize thus far:  international trade agreements being pushed by the US government could set up trade tribunals that could reverse national laws meant to protect health and safety.  Such tribunals would not follow the procedures used, for example, in US courts, and could not be held accountable by individual governments.  Various aspects of these tribunals, and recent actions involving tribunals already set up by earlier trade agreements suggest the process may be heavily biased in favor of the financial interests of multinational corporation, and against patients' and the public's health.  Thus, health care and public health professionals ought to be alarmed about new agreements that could set up new tribunals, or expand the reach of existing tribunals.


Intellectual Property Rights vs Access to Health Care

Another set of problems affecting patients' and the public's health  are provisions in trade agreements favoring corporate "intellectual property" over access to drugs, devices and health care.  Stiglitz wrote in 2014,

America has been fighting to lower the cost of health care. But the TPP would make the introduction of generic drugs more difficult, and thus raise the price of medicines. In the poorest countries, this is not just about moving money into corporate coffers: thousands would die unnecessarily. Of course, those who do research have to be compensated. That’s why we have a patent system. But the patent system is supposed to carefully balance the benefits of intellectual protection with another worthy goal: making access to knowledge more available. I’ve written before about how the system has been abused by those seeking patents for the genes that predispose women to breast cancer. The Supreme Court ended up rejecting those patents, but not before many women suffered unnecessarily. Trade agreements provide even more opportunities for patent abuse.

To date, most of the details of the proposed trade agreements have been kept secret, but as noted on the PLoS Medicine blog in December, 2013, by Reshma Ramachandran and David Carroll,

Last month, Wikileaks posted the complete Intellectual Property (IP) Chapter of the secretly-negotiated Trans-Pacific Partnership Agreement (TPP) confirming public health advocates’ worst fears of the agreement’s impact on patients worldwide.

In particular,

The Wikileaks posted text revealed that the USTR and Obama Administration have decided to aggressively prioritize the interests of multinational pharmaceutical and medical companies over patients worldwide and at home. In fact, according to emails submitted to Intellectual Property-Watch under the Freedom of Information Act, the USTR has actively solicited the input of industry groups, giving them special access to the negotiating text while consumer and health groups have had to resort to requesting special meetings with negotiators. 

So,

Indeed, the recently leaked TPP chapter reflect these corporate interests as evidenced by the still-included provisions. In the text, the USTR has proposed a number of provisions that will further strengthen patents and data exclusivity for pharmaceuticals. Such provisions will bar the entry of generic competition into the market allowing for brand-name drug companies to retain their monopoly market and set drug prices at exorbitantly high prices. These provisions include:

- Lowering patent standards allowing for “evergreening” or the granting of patents for newer forms of existing medicines including new formulations or minor modifications even in the absence of a therapeutic benefit

- Mandating that surgical, therapeutic, and diagnostic methods must be patented making medical practitioners in TPP member states liable for infringement and restricting their choices for treatment

- Imposing data exclusivity on all pharmaceuticals, including biologics with the minimum period for this class to be set at 12 years (despite the fact that the White House is publicly in favor of a 7 year data exclusivity period and the FTC has stated that there is no need for any data exclusivity period at all) thereby not allowing drug safety regulators from accessing clinical data to grant market approval for generic and biosimilar drugs

-  Adjusting patent term periods to account for “unreasonable delays” including patent prosecution periods ranging from two years to more than four years extra further delaying generic drug entry into the market

- Adjusting patent term periods for regulatory approval periods allowing for patent extensions for both new pharmaceutical products as well as methods for producing or using new pharmaceutical products halting any potential innovation

- Linking patent status and drug marketing approval causing drug regulatory authorities to take on the additional task of early patent enforcement, allowing for bogus patents to be a barrier to generic drug registration Such proposals go beyond current U.S. and international law including the World Trade Organization’s Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement.

Additionally, the TPP has the potential to jeopardize millions of lives in the participating countries by driving up the costs of medicines significantly. Even in the United States, there has been a public outcry from physicians regarding the high cost of medicines. Earlier this year, over 100 oncologists came together to write a perspective piece in the journal Blood calling the prices of brand-name cancer drugs “astronomical, unsustainable, and perhaps even immoral.” The United States health care system has in fact greatly benefited from the entry of generic competition. On May 9, IMS Health released a report entitled Declining Medicine Use and Costs: For Better or Worse?, which found that many Americans had forsaken much needed doctor visits, medicines, and other treatments as they struggled to afford health care. In light of this, it is appalling that U.S. negotiators would continue to push provisions that would further exacerbate the cost burden of healthcare for patients not only abroad, but at home. 

Public Citizen particularly criticized the provision for patenting procedures,

Medical procedure patents raise healthcare costs. Health providers, including surgeons, could be liable for the methods they use to treat patients. Essentially, except for when a surgeon uses her bare hands, surgical methods would be patent eligible subject matter under the U.S. proposal.
Additional concerns about the potential of new trade agreements to increase the price of medicines and health care, and limit access to them, came, per Ramachandran and Carroll, from Doctors Without Borders, the American Association of Retired Person, and the International Federation of Medical Students.  More recently, such concerns were stated by amfAR re access to and costs of HIV medications (reported on Vox), and were restated by Doctors Without Borders (reported by the National Journal).

Perhaps more US health care professionals and public health advocates would be speaking out if they understood the problem.  However, concerns about how new proposed trade agreements could affect health care and public health have been notably anechoic in the US.  I could find absolutely no discussion of them in any moderate or large circulation US health care or medical journal.  There has been discussion in English language medical and and health care journals, but in journals that are relatively obscure, or published outside of the US, for example, see articles by Greenberg and Shiau(3), and Thow et al(4).  Note that the former wrote,

academic public health has failed to appreciate the serious risks of the TPP[A] and has not responded to its threats. 

Keeping concerns that the new trade agreements could threaten patients' and the public's health out of public discussion may be just the latest example of what we have called the anechoic effect, because it looks like it may be no accident that these proposed trade agreements favor multinational corporations over patients' and the public's health.  There is evidence that at least the US governmental process for negotiating these agreements was heavily influenced by the interests of these corporations, but not by the interests of patients or citizens. 

Revolving Doors, Regulatory Capture Generate the Momentum

There are thus strong reasons for health care and public health professionals to oppose the rush to approve the new trade agreements (the TTIP and TPP).  Despite these concerns, and the increasingly vocal opposition from many US legislators, the current administration has forged ahead with its proposal to "fast-track" their approval, only to be suddenly blocked, and by its supposed compatriots in the Democratic party.  There are lots of explanations for this, but two that got only a little notice but seem particularly germane to Health Care Renewal are the influences of the revolving door and cultural regulatory capture.

The case for these was best made by a November, 2013 article in the Washington Post by Timothy B Lee,

the U.S. negotiating position also had an unmistakeable bias toward expanding the rights of copyright and patent holders.

Those positions are great for Hollywood and the pharmaceutical industry, but it's not obvious that they are in the interests of the broader U.S. economy. To the contrary, critics contend that the rights of copyright and patent holders have been expanded too much. Those concerns do not seem to have swayed the trade negotiators in the Obama administration.

Two major factors contribute to the USTR's strong pro-rightsholder slant. An obvious one is the revolving door between USTR and private industry. Since the turn of the century, at least a dozen USTR officials have taken jobs with pharmaceutical companies, filmmakers, record labels, and technology companies that favor stronger patent and copyright protection.

A more subtle factor is the structure and culture of USTR itself. In its role as a promoter of global trade, USTR has always worked closely with U.S. exporters. That exporter-focused culture isn't a problem when USTR is merely seeking to remove barriers to selling U.S. goods overseas, but it becomes problematic on issues like copyright and patent law where exporters' interests may run directly counter to those of American consumers.

Lee provided extensive examples of how US trade officials transited the revolving door to and/or from the pharmaceutical industry.

On May 3, 2004, the United States and Australia signed a bilateral trade agreement. The agreement included a section on intellectual property that had numerous provisions favorable to pharmaceutical manufacturers. For example, it barred generic drug makers seeking approval for their drugs from citing safety or efficacy information originally submitted by brand-name drug makers for a period of five years after the information is submitted, making it more difficult for generic drug makers to enter the market.

The lead American negotiator was Ralph Ives, who was promoted to Assistant USTR for Pharmaceutical Policy soon after the negotiations concluded. He was aided by Claude Burcky, Deputy Assistant USTR for Intellectual Property. Less than three months after the Australia agreement was signed, the Sydney Morning Herald reported that both men would take jobs at pharmaceutical or medical device companies. Their new employers stood to benefit from some of the pro-patent-holder provisions of the treaty. Ives took a job at AdvaMed, a trade group representing medical device manufacturers. Burcky moved to the pharmaceutical and medical device company Abbott Labs.

Since then, Abbott has hired two other USTR veterans, Andrea Durkin and Karen Hauda, according to the women's LinkedIn pages. Another USTR official, Kira Alvarez, has gone through the revolving door twice over the last 15 years. Her LinkedIn profile indicates that she served at USTR from 2000 to 2003, spent four years at the pharmaceutical giant Eli Lilly, and then returned to USTR in 2008 as Deputy Assistant USTR for Intellectual Property Enforcement. She was there for five years before she took a job at AbbVie, a pharmaceutical firm that spun off from Abbott earlier this year.

According to his official biography at the site of the Biotechnology Industry Associaiton, Joseph Damond 'was chief negotiator of the historic U.S.-Vietnam Bilateral Trade agreement' during his 12 years at USTR. He then spent five years at the Pharmaceutical Research and Manufacturers of America before moving to BIO. Justin McCarthy went through the revolving door in the other direction. According to a USTR press release, McCarthy was responsible for intellectual property issues at the pharmaceutical company Pfizer from 2003 to 2005 before he was hired at USTR. He now works at a lobbying firm.

Lee also suggested that the US Trade Representative has been culturally captured by industry through its use of advisory panels made up of industry members, but not, for example, clinicians, public health advocates, or interested members of the public.

The agency has established 16 industry trade advisory committees to provide advice about the complex issues USTR deals with in the course of its negotiations. As the name suggests, the ITACs are designed to gather feedback from industry groups. There are no public interest groups, academics, or other non-industry experts on ITAC 15, which focuses on "intellectual property" issues.

And that matters because groups with ITAC seats have access to confidential information about the U.S. negotiating position that isn't available to the public. Sherwin Siy, an attorney at the advocacy organization Public Knowledge, has had multiple meetings with USTR representatives during the course of the TPP negotiations. But he says it was difficult to give USTR meaningful feedback because he didn't know what positions U.S. negotiators were advocating.

'They're willing to sit in a room with us and listen to our objections and our issues and be very polite,' Siy says. But 'whether or not that actually means anything is at best a black box.'

When USTR wants technical advice on transposing U.S. law into international agreements, it naturally turns to the industry representatives on the ITACs. And it stands to reason that the advice the agency receives in response would be a bit one-sided. Where U.S. law is ambiguous, industry groups naturally gravitate toward interpretations of U.S. law that favor their employers' interests. And because public interest groups and independent experts aren't allowed to see proposed language (aside from occasional leaks), the agency may not even realize that it is exporting a warped interpretation of U.S. law.


The pro-industry cultural bias has caused consternation among even well-known libertarians, as Lee noted,

'USTR sees itself as an advocate for U.S. exporter interests,' says Bill Watson, a trade expert at the Cato Institute. 'It's trying to negotiate market access for particular U.S. industries that ask for it. That bias leads USTR to think that because U.S. companies want more IP protection abroad, it's in their interest to negotiate that.'

So it seems quite clear that the US agency that negotiates the new international trade agreements may be staffed by people who came from affected industries, including pharmaceutical, device and biotechnology companies, and privileges advice from such companies.  Thus the agency appears to suffer from conflicts of interest due to the revolving door, and from regulatory capture induced by its bias in favor of advice from industry over that from clinicians, public health advocates, or interested members of the public.  This suggests why it appears that this government agency has actively been promoting trade agreements that favor industry interests over patients' and the public's health.

It may be that top US executive branch officials, all the way up to the President of the US, have been very ill-served by relying on an agency subject to such conflicts of interest and regulatory capture.

Summary

We have frequently written about the revolving door phenomenon, and its effect on government agencies and officials who regulate and control many aspects of health care. Recently, we wrote about how the revolving door risks corruption, and can lead to regulatory, and even state capture.

In 2011, we even wrote about how the revolving door may affect US trade negotiations, and thus important aspects of aspects of global health care.

Government officials affiliated with all major political parties have been known to transit the revolving door.  The recent cases we have documented have tended to be more about the party that currently controls the executive branch, of course.  But now, we seem to have documented how the revolving door has lead to a supposedly liberal president proposing trade agreements that seemed heavily biased towards corporate rather than popular interests, and thus suffered an embarrassing defeat at the hands of his party compatriots in the legislature.  The president seems to have been particularly ill-served by employees of the executive branch whose previous or potential revolving door transits have made them sing the tunes of industry rather than of the people they are supposed to be serving.  This suggests that in the long run, nobody but the participants in the revolving door ultimately benefits from their rotary transitions.

Instead, as we have said many times before, the constant interchange of health care insiders among government, large health care corporations, and the lobbying and legal firms which represent them certainly suggests that health care, like many other sectors, seems to be run by an amorphous group of insiders who owe allegiance neither to government nor industry.

However, those who work in government are supposed to be working for the people, and those who work on health care within government are supposed to be working for patients' and the public health.  If they are constantly looking over their shoulders at potential private employers who might offer big checks, who indeed are they working for?


Attempts to turn government toward private gain and away from being of the people, by the people, and for the people have no doubt been going on since the beginning of government (and since the Constitution was signed, in the case of the US).  However, true health care reform  would require curtailing the severe sorts of conflicts of interest created by the revolving door.

Real heath care reform would require  multiyear cooling off periods before someone who worked in the commercial world can get a job in a government whose work has direct effect on his or her previous employer or industry sector, and before someone who worked in government whose work had direct effect on a particular economic sector can accept a job for a company in that sector.

ADDENDUM (19 May, 2015) - This post was republished in OpEdNews.

ADDENDUM (29 May, 2015) - This post was republished in OpenHealth News.

References

1.  Freeman J, Keating G, Monasterio E at al.  Call for transparency in new generation trade deals. Lancet 2015; 385: 605-605, link here.
2.   Hilary J.  The Transatlantic Trade and Investment Partnership and UK healthcare.  Brit Med J 2014; 349: g6552, link here.
3.  Greenberg H, Shiau S. The vulnerability of being ill-informed: the Trans-Pacific Partnership agreement and global public health.  J Pub Health 2014; 36: 355-357, link here
4.  Thow AMT, Gleeson DH, Friel S. What doctors should know about the Trans-Pacific Partnership agreement.  Med J Aust 2015; 202: 165-167, link here.