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Transition at PhRMA

Former Representative Billy Tauzin tendered his resignation this week, ending a 5 ½ year tenure as President of the Pharmaceutical Research and Manufacturing Association (PhRMA). When his successor is chosen, it will tell us a lot about how the pharmaceutical industry sees itself….and what the big pharmaceutical companies think is their next major challenge. Here is FDA Matters’ analysis.

Congressman Tauzin has won some major battles for the association’s members. Depending on the news story, his departure is linked to criticisms of the industry’s health reform deal with the White House or to Board unhappiness with his management style. His contract is up this year, so the timing may be nothing more than a mutual parting.

Tauzin was hired in 2005. Immediately before, the otherwise successful battle for the Medicare Part D benefit had revealed how far the industry’s relationship with Congress had deteriorated. Industry was feeling very insecure about reimportation, follow-on biologics, counterfeiting, access to generic drugs, and drug price negotiations. Among other things, Tauzin built relationships with Democrats, balancing the industry’s traditional political strength with Republicans.

In retrospect, it seems obvious that PhRMA’s new President would be well-connected and well-respected on Capitol Hill. Yet, PhRMA had never before looked to Congress for a leader to run the association.

Going back more than 30 years, the Congressman’s four predecessors at PhRMA were politically savvy and experienced—but not of, or close to, Congress. Each was also quite different from another.

The first one I remember was Joseph Stetler, president during the 1970’s. At the time, the pharmaceutical industry’s greatest challenge was from the medical professions. There were complaints about industry influence on medical education and clinical practice…and questions about whether medical journals should carry ads from pharmaceutical companies.

Among Stetler’s qualifications: he had been general counsel to the American Medical Association for 12 years.

Lewis Engman followed Stetler in the late 1970’s, as the industry became more concerned about attacks on its business practices, notably efforts to keep generic drugs off the market. He was President during the negotiations on the Hatch-Waxman legislation in 1983 and 1984, which fundamentally changed the industry’s business model.

Among Engman’s qualifications: he had been chairman of the Federal Trade Commission.

His successor was Gerald Mossinghoff, who guided the industry through implementation of Hatch-Waxman. As generics were becoming serious market players, he moved PhRMA toward a more far-reaching and comprehensive positioning on the protection of the industry’s intellectual property.

Among Mossinghoff’s qualifications: he had been head of the US Patent and Trademark Office.

His successor was Alan Holmer. The pharmaceutical industry of the mid-1990’s was feeling the pressure of globalization. Worldwide markets had become increasingly important. Trade barriers had begun to threaten the industry, which still had a strong domestic focus.

Among Holmer’s qualifications: former Deputy US Trade Representative and a Deputy Assistant Secretary for Import Administration in the Department of Commerce.

Holmer was as accomplished and renowned as an international trade lawyer as his predecessors had been in their areas of expertise. Tauzin followed, filling the industry’s need to mend fences and improve relations with Congress.

I don’t know what the PhRMA board is thinking with regard to a new President to succeed Representative Tauzin. It may not be a former member of Congress, as many assume.

History tells us that the new PhRMA President will reflect the Board’s view of the state of the industry and its most pressing needs.

I recommend a bowl of popcorn and a comfortable place on the couch as we watch the pharmaceutical industry decide who they are and what they want to be.


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