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Tauzin’s $11.6 Million Made Him Highest-Paid Health-Law Lobbyist

Billy Tauzin, the former congressman turned pharmaceutical industry lobbyist, was paid $11.6 million in 2010, the year he brokered a deal with President Barack Obama that helped pass the health-care overhaul.

After the law was signed, Tauzin left his job as head of the Pharmaceutical Research and Manufacturers of America, or PhRMA, as the highest-paid lobbyist among groups most involved in the overhaul debate. Karen Ignagni, leader of the insurer lobby, was paid $1.5 million in 2010 while Tom Donahue at the Chamber of Commerce made $4.8 million, tax records show.

Tauzin did “what loads of other politicians have done -- trading on his expertise and connections to amass great personal wealth,” said Sheila Krumholz, executive director of the Center for Responsive Politics in Washington, in a telephone interview. “He’s just more successful at it than others.”

The disclosure of Tauzin’s salary, reported in Internal Revenue Service filings, is renewing questions about the revolving door between government and industry. Last week, Bloomberg News reported that companies founded by Republican presidential candidate Newt Gingrich, a former House speaker, grossed $55 million from 2001 to 2010 for consulting services and memberships in a health-policy center.

Billy Tauzin, former congressman and chief executive officer of the Pharmaceutical Research and Manufacturers of America. Photo: Joe Marquette/Bloomberg Close

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Billy Tauzin, former congressman and chief executive officer of the Pharmaceutical Research and Manufacturers of America. Photo: Joe Marquette/Bloomberg

It’s alarmingly common for members of Congress to depart for highly paid lobbying jobs, said Melanie Sloan, executive director of Citizens for Responsibility and Ethics.

‘Cash Out’

“It feeds the public perception that members are doing big industry’s bidding so they can cash out,” said Sloan, whose nonprofit group is based in Washington, in a telephone interview. “It seems like being a member of Congress is just a way-station on the way to a highly paid lobbying job.”

Tauzin, a former Republican U.S. representative from Louisiana, joined PhRMA in 2004, a year after he wrote the law creating Medicare’s prescription drug benefit, a boon to the pharmaceutical industry, while he served as chairman of the House Energy and Commerce committee.

In 2009, as the leader of PhRMA, he brokered a deal capping at $80 billion the amount drugmakers would contribute to the overhaul in return for his organization’s support of the law.

The agreement drew Republican ire and may have contributed to his ouster last year.

The deal was “very influential in getting key patient groups to see that, on balance, the Affordable Care Act was going to be a benefit for them,” Joseph Antos, who studies health policy at the American Enterprise Institute in Washington, said in a telephone interview.

Drugs for Seniors

The $80 billion contribution, to be made over 10 years, helped the Obama administration close a gap in Medicare funding, called the donut hole, and allowed health-law supporters to say they were lowering seniors’ costs for prescription drugs. Medicare is the U.S. government health program for the elderly and disabled.

In 2007, Tauzin received $2.06 million as PhRMA’s CEO. His compensation grew to $4.48 million in 2008 and $4.62 million in 2009 before he left in June 2010. The health overhaul was signed into law in March 2010 after more than a year of debate.

Brendan O’Connor, a spokesman for Tauzin’s lobbying firm, Tauzin Consultants, said in an e-mail that the former lawmaker wouldn’t comment on his PhRMA compensation. Matt Bennett, a PhRMA spokesman, said the payout came as a result of Tauzin’s overall contributions, not as a severance payment.

Tauzin joined Congress as a Democrat in 1980, then became a Republican in 1994. According to a press release announcing his 2011 move to the lobbying firm Alston & Bird LLP, he is the only member of Congress to serve in the leadership of both parties.

Reason for Departure

PhRMA said in 2010 that Tauzin’s departure as chief executive officer was voluntary and long planned. His decision to quickly cut a deal with Obama instead of keeping industry options open, though, drew criticism from PhRMA members and contributed to his leaving, said three people familiar with the departure who asked not to be named because they weren’t authorized to speak publicly.

While Tauzin made less in 2010 than the $17 million paid to Ian Read, CEO of New York-based Pfizer Inc. (PFE), the world’s biggest drugmaker, he outpaced Merck & Co.’s Ken Frazier at $9.4 million, and James Cornelius, the chairman of Bristol-Myers Squibb Co., with $3.6 million, according to Bloomberg data.

Tauzin’s pay in his final year at PhRMA was first reported on the website of CEO Update, which collects trade association compensation data. The group said Tauzin’s final pay was comparable to payouts made to Jack Valenti, the former CEO of the Motion Picture Association of America, and Ed Kavanaugh, the former top executive at the Personal Care Products Council.

Unlike Tauzin, though, Valenti and Kavanaugh both retired after “decades of service” to their associations, CEO Update wrote on its website.

“To the layman, severance just sounds bad,” said Mark Graham, managing director at CEO Update, in a telephone interview. “To the more sophisticated compensation analysis, that could be kind of what it is.”

To contact the reporters on this story: Alex Wayne in Washington at awayne3@bloomberg.net; Drew Armstrong in Washington at darmstrong17@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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