SEPTEMBER 19,
2018
SAN
FRANCISCO — The pharmaceutical industry’s most powerful lobbying group is
opening its war chest to try to sway a policy fight with no clear connection to
medicine or health care, spending a half-million dollars here to oppose a
California ballot measure that would expand rent control protections across the
state.
PhRMA’s
contribution is unusual not for its size — $500,000 is a relatively small sum
for the trade association — but because the group typically only involves
itself in policy issues likely to impact its bottom line. In this fight, it is
siding with landlords, developers, and real estate investors, mainly in
California but with some headquartered in other states; PhRMA is the only large
donor opposing the measure without ties to the housing industry.
The group
says that it’s getting involved in the ballot measure at stake, called
Proposition 10, because it fears passage could make housing harder to find for
the nearly 900,000 employees who work in biopharma in the state. Some
economists have expressed concern that it could discourage the construction of
new housing and make life harder for low-income renters in the long-term.
But some
people here suspect that PhRMA is using its financial clout to settle an old
political score with Michael Weinstein, a longtime HIV/AIDS
activist who has repeatedly tangled with the drug industry, most recently by
bankrolling a set of state-level ballot measures aimed at capping drug prices.
The AIDS
Healthcare Foundation, which Weinstein leads as president, has provided the
vast majority of the financial backing for Proposition 10: over $12 million, according
to the latest campaign finance disclosures. The nonprofit, which runs clinics
across the globe, sees housing policy as key to promoting health, saying the
measure would prevent displacement and expand protections for low-income
renters in a state with few affordable housing options.
And as
Weinstein sees it, PhRMA’s involvement looks like payback.
“They
consider us an enemy, and they have unlimited money to spend on anything they
want,” he said in a phone interview with STAT. “It’s preposterous for them to
say they have an interest in this issue.”
He added,
with an air of disbelief: “It’s a very strange coincidence.”
Dr. Adams
Dudley, director of the Center for Healthcare Value at the University of
California, San Francisco, said he thinks “it’s hard to imagine that [PhRMA’s]
stated reason is plausible.”
The more
plausible explanation, as Dudley sees it, is that PhRMA is “sending a signal:
If you get on our bad side, we’ll keep opposing whatever you do, we’ll try to
make your life difficult for a very long time, even if you do something else.”
Whether
or not it accounts for PhRMA’s involvement in Proposition 10, the drug
industry’s distaste for Weinstein is easy to explain. He has sued
GlaxoSmithKline over its prices, Pfizer
over its marketing, and
Gilead over its patents.
In the
past few years, Weinstein has further angered drug makers — and even a number
of patient advocates — by funding ballot measures in California, Ohio, South
Dakota, and the District of Columbia that would have prevented state and local
health authorities from paying more for drugs than the discounted price the
Department of Veterans Affairs received. None of them has succeeded.
The most significant such push came in 2016
in California, where drug makers contributed a record-setting $109 million to
oppose the measure. PhRMA itself didn’t contribute cash, but it did log an
additional $650,000 in non-monetary contributions, a category that includes
labor and services. In that fight, the drug industry found allies in the
California Medical Association and a surprising number of patient groups,
including some that have taken money from pharmaceutical companies; they called
the measure flawed, saying it would have failed to bring drug prices down for
most Californians.
The AIDS
Healthcare Foundation brought in Sen. Bernie Sanders (I-Vt.) to stump for the
measure, but voters defeated it by a 53-47 margin in the
election that sent President Trump to the White House.
In 2017,
Weinstein tried again in Ohio with a nearly identical ballot measure, where the
drug industry — and over 79 percent of voters — opposed it. And in the lead-up
to the 2018 general election, PhRMA has won legal challenges in South Dakota
and D.C. that prevented similar measures from even reaching the ballot.
Despite
its rich history with Weinstein, PhRMA denied the contributions had anything to
do with past political entanglements.
“The
research-based biopharmaceutical industry supports nearly 900,000 jobs and $2.6
billion in economic output in California,” PhRMA spokeswoman Priscilla
VanderVeer said in a statement. “The industry’s investment in the state is
threatened when our employees cannot find housing and Prop. 10 could make the
situation much worse. That’s why we are opposing Prop. 10 and contributing to
its defeat.”
The
opposition to Proposition 10 in California this election season has so
far raised more than $20 million.
While the largest donors opposing Proposition 10 are in the housing industry, a
political action committee backed by the California Business Roundtable is also
pledging to defeat it. The group’s members include several real estate
developers as well as the drug makers Eli Lilly and Boehringer Ingelheim.
Proposition
10 is not the first time PhRMA has waded into local housing policy — nor is it
the first time it’s opposed the AIDS Healthcare Foundation in such a fight.
In
2017, Weinstein was the driving force behind Measure S, a local ballot
measure in Los Angeles County that would have tightened zoning laws in an
effort to prevent new market-rate construction. The AIDS Healthcare Foundation
provided almost all of the $5 million funding to support it, saying
the proposed law would prevent displacement.
But just
like with Proposition 10, critics countered by calling the measure
anti-development and saying it would freeze the city’s efforts to lower prices
by expanding its housing supply. PhRMA contributed $25,000 to
the opposition to Measure S. And in what has become a familiar result for
Weinstein-backed initiatives, the measure failed by a 30-70 margin.
In that
same March 2017 municipal election in Los Angeles County, PhRMA contributed $10,000 to
support a separate referendum, called Measure H. Voters passed the measure,
which levied a 0.25 percent sales tax increase to fund mental health, housing,
and other services for the homeless.
PhRMA
says its contributions to local efforts surrounding housing, homelessness, and
urban development may not be directly related to the business of manufacturing
pharmaceuticals but are important to the industry nonetheless.
Just
about everyone agrees that California is in the midst of a housing crisis. As
the state’s coastal economies boom, construction of new homes and apartment
buildings isn’t keeping pace. The result: Residents are paying more for monthly
rent, commuting longer distances to work, and packing into increasingly cramped
quarters.
“That something has
to be done is already pretty well established,” said Melissa Michelson, a
political science professor at Menlo College in Silicon Valley. “The question
is whether rent control is the answer — or whether will it make things worse.”
Proposition
10 would repeal a state law enacted in 1995 that limits the type of rent
restrictions local governments can impose. Its passage would allow local
governments to impose rent control more freely, giving them a tool housing
advocates say could go a long way toward preventing evictions and rapid
gentrification.
Expanded
rent control, however, is not seen as a slam-dunk win for affordable housing
advocates, and opponents argue it could discourage new construction.
The
measure is dividing California’s opinion makers, in some cases along party
lines. The state’s Democratic Party has endorsed the measure, while its
Republican Party opposed it. The state’s major newspapers are split, too: The
editorial boards of the Los Angeles Times and
the Sacramento Bee have
come out in favor of the measure; those of the San Francisco Chronicle and
the San Jose Mercury News have
opposed it.
How
Proposition 10 fares in November will come to down to a few factors, Michelson
said. One is how effective the opposition’s ads prove to be in sowing doubts in
the minds of voters that the measure is flawed. And another is whether
progressive voters come out in full force to pass the measure as part of a blue
wave.
Regardless
of what California voters decide, the AIDS Healthcare Foundation is expected to
continue prioritizing the affordable housing issue.
The group
last year created a new division called the Healthy Housing Foundation. The
offshoot, designed to provide affordable housing, has acquired four hotel
properties on Los Angeles’ Skid Row and in
Hollywood, altogether totaling more than 600 units. It’s also planning of the
construction of 680 units in Fort Lauderdale, Fla.
Said
Weinstein: “We’ve jumped in whole-hog into this issue, because it’s a crisis of
the kind that we confronted at the beginning of AIDS, which was a vulnerable
population whose needs were being ignored.”
Lev
Facher Washington
Correspondent
Lev Facher covers the
politics of health, medicine, and life sciences.
Rebecca
Robbins San Francisco
Correspondent
Rebecca covers the life sciences industry in the Bay Area.
https://www.statnews.com/2018/09/19/phrma-opposing-a-rent-control-measure-in-california/?itx[idio]=8812325&ito=792&itq=40b009ad-ab64-4358-a580-001cf2b76446
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