'We support those candidates who understand our mission and our industry,' Castellani said. PhRMA quietly spends big in 2010

The drug industry spent at least $25 million protecting its friends in Congress this year, but PhRMA chief John Castellani doesn’t really want to talk about it.

The trade group was instrumental in several close Democratic Senate contests, spending millions to successfully protect embattled Majority Leader Harry Reid and seven figures to help Sen. Patty Murray of Washington win. And though the group spent more helping Reid than any other member of Congress, its total spending was split about evenly between Democrats and Republicans, knowledgeable industry sources told POLITICO.


But in his first sit down interview since taking PhRMA’s reins last summer, Castellani was coy about the trade group’s political program.

“I’ll have to see what the final numbers are,” he said. “I don’t know the total, to be very truthful about it. We will find them and report them.”

Castellani’s reticence is a departure from his predecessor, the gregarious former Rep. Billy Tauzin. During the final hard-fought months of health care reform, Tauzin’s PhRMA made it clear to whoever would listen that the group would pony up big money to defend lawmakers that supported reform.

Indeed, the group was front and center in months of television ad wars. But during the election season, PhRMA took a more behind-the-scenes approach, funding third-party groups, grassroots and get-out-the-vote efforts – making the cash much harder to track, some sources said.

Not surprising then, the new PhRMA president was also reticent to discuss what candidates the lobbying powerhouse backed.

“We support those candidates who understand our mission and our industry and its importance and who work to support us and our ability to discover and deliver innovative medicines,” he said, adding that they come from both sides of the aisle.

Candidates that fit that mold, Castellani allowed, are Murray and Reid, who both squeaked out wins in tough races last week.

Murray is a PhRMA favorite because she voted with the industry to give drug-makers a 12-year window where branded biologic drugs could be sold without competition from generic versions.

And during the health care debate, both Murray and Reid voted against Democratic Sen. Byron Dorgan’s proposal to allow Americans to buy FDA-approved drugs from other countries, an amendment the industry opposed.

The vote was crucial because the amendment’s passage threatened to destroy a roughly $100 billion deal PhRMA struck with the White House and Senate Democrats to help pass reform.

Republicans, who generally oppose re-importation, saw Dorgan’s amendment as a poison pill and voted for it in the hopes of killing health reform. That forced Reid to successfully marshal his Democrats, many of whom favor the policy, to vote against it – a move that won him serious PhRMA cred.

Murray, Reid and Republican Sen.-elect Rob Portman of Ohio understand the re-importation issue, Castellani said. And though he wouldn’t confirm whether PhRMA backed those candidates, he said, “It shouldn’t be a surprise that our industry would support people like that.”

And as if to underscore the point, a few minutes later Murray called Castellani and he excused himself from the interview to take her call.

But it’s not just Democrats like Murray that Castellani will have to deal with now. He’ll have to rebuild relationships with Republicans upset at the major role PhRMA played in helping Democrats pass health care reform this year.

“One of the things incumbent on us as an industry and us as an association is to rebuild bridges with people who were sore about the politics of health care reform,” he said. “I am absolutely committed to do that.”

When pressed on how he planned to make inroads with disaffected Republicans, Castellani said PhRMA will use the traditional tools of a trade association: sharing information, providing data analysis and spreading the word about which policies and lawmakers are helping the cause.

The more conventional approach is a marked difference from Tauzin’s style. When Democrats took control of Congress in 2006, PhRMA had a bull’s eye on its back, as Democrats viewed the group as an extension of the Republican’s campaign-money machine.

To counter that perception, Tauzin teamed up with Families USA and spent millions of dollars helping Democrats successfully expand children’s health care coverage – work that helped pave the way for the industry and Democrats to work together to pass health care reform.

Now that Republicans have taken control of the House, they’re looking to undo that historic achievement. Republican Rep. Eric Cantor, who’s in line to become House majority leader, has called last week’s election results a mandate to repeal the health reform law.

That won’t happen, Castellani said.

“Repeal is not the issue because it’s not going to be repealed,” he said. “The president’s not going to sign that bill.”

But, Castellani said, that doesn’t mean the health reform law isn’t going to be re-litigated.

“There are some issues that are just too good,” he said, in a nod to the politics driving the repeal effort.

But, anger over health care reform wasn’t the root of last week’s Democratic losses, he said, noting that a rash of Democrats who voted against reform still lost their re-election races.

PhRMA is open to improving the law, but with an eye on how changes affect the whole system. For instance, removing the controversial mandate that everyone buy insurance coverage erodes the effectiveness of the state insurance exchanges and their ability to drive down costs.

“You can’t take it apart piece by piece without dealing with the whole system because certain pieces cause it all to collapse,” he said.

The only piece that could be removed without toppling the health reform tower, he said, is a provision that requires businesses to file tax forms on transactions worth more than $600. Both Republicans and President Barack Obama have suggested the so-called 1099 requirement is too burdensome and should be removed.

And Castellani also sees opportunity to work with Republicans to undo parts of the law PhRMA never liked to begin with. Topping that list is an effort to take on an independent Medicare payment advisory board, which the group unsuccessfully fought during health care reform. The board would essentially force cost-cutting measures on lawmakers, limiting the influence of outside groups like PhRMA to lobby the outcome.

In the days before health reform passed, the industry dropped its push to be carved out from the board as it worked to ensure the final legislation didn’t bust the deal it cut with the White House and Senate Democrats. Originally an $80 billion deal, the price went up to about $90 billion by the end of last year. But the number was never solid and some industry insiders say the final number could be $100 billion or more in drug discounts and other industry givebacks.

Now eight months after the bill passed, Castellani said he still doesn’t know what the deal will cost the industry because all the regulations that affect the final number have not been written.

Said Castellani: “I would love to be able to answer that question.”