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Pharmaceutical Industry, Hospitals Pour Money Into Campaigns In Oregon

Ballot Measure 108, which would increase the tax on cigarettes and cigars and vaping products, has attracted the most money.
October 20, 2020

The health care industry is spending heavily on Oregon races this election cycle, much of it to pass a tobacco tax that would pump hundreds of millions of dollars a year into Oregon’s Medicaid system.

The biggest donors include Oregon hospitals and the pharmaceutical industry.

Hospitals and other health care providers are putting millions toward Measure 108, which would increase the tax on tobacco and put a tax in place for vaping products. The tax revenue would go into Oregon’s Medicaid program and smoking prevention and cessation work, with a focus on reaching youth before they become lifetime smokers. 

Pharmaceutical Industry Money

Meanwhile, the pharmaceutical industry continues its long tradition of giving heavily to Oregon lawmakers, who have frequently targeted high drug prices and industry profits.

In 2018, the Oregon Legislature passed House Bill 4005, which requires drug companies to submit reports on drugs that had a wholesale price increase of more than 10% for a one-month supply that cost at least $100. In 2019, the Legislature passed House Bill 2658, which requires drug manufacturers to report price increases to the state at least 60 days before they take effect. 

The pharmaceutical industry strongly opposed those measures, which are intended to curb expensive drug prices for consumers. The Pharmaceutical Researchers and Manufacturers of America, an industry trade group, lobbied strongly against the measures. That didn’t work. In December 2019, the industry trade organization, known as PhRMA, sued the state in federal court over the drug transparency laws, as it has in California and Nevada.  That lawsuit, which alleges the state law puts trade secrets at risk of disclosure, is pending. 

The industry’s campaign contributions continue. PhRMA and other drug companies have put $277,000 into Oregon legislative races this election cycle, according to an analysis conducted by STAT, a news site, and the National Institute on Money in Politics, a nonprofit, non-partisan research group. That analysis found that Oregon is one of three states in which more than two-thirds of legislators have received donations from the pharmaceutical industry in this election cycle. The other two states were California and Illinois. 

PhRMA, the biggest giver in the pharmaceutical industry, has put about $170,000 into legislative races this cycle, campaign finance data show. The group’s giving is across-the-board and includes Democratic and Republican lawmakers, including leadership in both chambers of the statehouse. 

PhRMA didn’t respond to a request for comment from The Lund Report. 

Oregon State Public Interest Research Group, or OSPIRG, is a nonprofit advocacy group that has led the charge for transparency in prescription prices. 

The pharmaceutical industry “certainly sees the writing on the wall,” Charlie Fisher, state director of OSPIRG, said in an interview. “The Legislature both already has and is interested in reining in the frankly outrageous  (pricing) practices of the pharmaceutical industry. They are going to do whatever they can to try to slow that down.”
The big giving comes as Oregon voters consider Measure 107, which would amend the state constitution and allow the Legislature and cities to pass laws to limit contributions to state and local candidates and measures.

"Big money from special interests in Oregon politics hurts all of us, and we think it's just incumbent on both the voters in November and legislators next year to really crack down on the amount of big money going into elections and set contribution limits,” Fisher said.

(See related: Republicans Reap Top Dollars from PhRMA But Industry Donates To Democrats, Too.)

Measure 108 

Meanwhile, Measure 108 would tax cigarettes another $2 a pack, making the total state tax $3.33. Oregon’s $1.33-per-pack cigarette tax is the lowest on the West Coast. That’s on top of a federal tax of about $1 a pack. The measure also would raise to $1 the 50-cent cap on the tax for each cigar. Cigars are taxed based on wholesale prices, but with a cap. The measure would also tax nicotine vaping products and e-cigarettes, which now are not taxed. 

Hundreds of millions are at stake in the outcome. State estimates project the new taxes would pull in $350 million in the 2021-2023 biennium.
Ninety percent of that revenue would go to the state’s Medicaid system to help low-income families with health care and increase funding for mental health services. and the remaining 10% would go toward smoking prevention and cessation programs throughout Oregon. 

Big hospital systems and health care groups are bankrolling the campaign. Providence Health and Services, Legacy Health System, PeaceHealth and the Oregon Association of Hospitals & Health Care Systems have donated $7 million combined -- about half of the $13.4 million the measure has raised.

The top donor, Providence, gave $3.3 million; Legacy gave $1.7 million; and PeaceHealth, a network of hospitals and clinics in Oregon and Washington, and the hospital association each gave about $1 million. The three hospital systems are nonprofits.

“There is broad support for Measure 108 from Oregon’s hospitals because it will improve community health in some important ways,” David Northfield, spokesman for the hospital association, said in a statement. “The revenue raised will fund smoking cessation programs and address vaping, which is surging in popularity with kids. It will also help keep a solid financial foundation for Medicaid, which is more important than ever in the COVID era.”

Reported opposition spending is lighter. A “No on 108” political action committee reported just $7,000 in donations, primarily from the vaping industry.

The hospital association’s spending so far this cycle is similar to the 2018 election cycle, when it donated $942,000 in cash and in-kind services such as staff time. Most of those donations went to support Measure 101, a package of up to $320 million in taxes on hospitals and insurers that would help the state’s Medicaid budget and prevent many Oregonians from losing health care coverage. Supporters donated $3.8 million to the measure’s campaign. Voters passed it. The health care industry broadly supported the measure, in part because the tax money essentially flows back to the industry.

(See related: Hospitals Contribute Heavily to Measure 108.)

Measure 109

Measure 109 would legalize psychedelic mushrooms in clinical settings to treat mental health challenges such as depression and post-traumatic stress. It has supporters and detractors in the health care industry.  

It’s drawn $2.6 million in donations, including modest donations under $1,00 from psychologists, physicians and therapists. New Approach PAC, which supported the 2014 push to legalize marijuana in Oregon, donated $1.7 million. 

State and national psychiatric groups are opposed, saying that supporters want to quickly move beyond safety guidelines and make Oregon the first state to legalize the mushrooms. They include the Oregon Psychiatric Physician Association and the American Psychiatric Association, though they have not formed a committee to gather money for opposition campaigning. 

Measure 109’s organizers are Portland-area therapists Tom and Sherri Eckert. 

Supporters of the effort have said the measure would give the Oregon Health Authority a two-year period to ramp up for the program. Studies at Johns Hopkins University and New York University that have identified potential benefits for patients who take controlled doses of psilocybin.

You can reach Ben Botkin at [email protected] or via Twitter @BenBotkin1.