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A warning for Big Pharma: Lobbying won't work anymore

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Let's be blunt. Corporate America is in delusional denial about how much the ground in Washington has shifted against it. The rise of Senators Bernie Sanders and Elizabeth Warren, both inside the halls of Congress and throughout the country, is more than just a passing fad. Just ask Wells Fargo CEO John Stumpf... oops, I mean former CEO John Stumpf, who stepped down in part thanks to Senator Warren's grilling during recent Senate hearings.

Here's a warning and a wake up call to big business: If you try to use the same old lobbying and crony networks to get your way, it won't work. Not anymore. And here's a special warning call just for Big Pharma: You need to change your public relations and marketing strategies now, or die. The good news is, unlike so many other industries, the drug companies have a very effective way out of this mess.

But first let's set the stage a little more clearly. The most immediate example of this new anti-big business reality in Washington comes from the just-announced AT&T/Time Warner merger deal. Since it was first announced last week, Senator Sanders has gone from simply criticizing the deal online to now emphatically vowing to kill the deal.

Donald Trump also quickly said his administration wouldn't allow the deal. These are serious threats that seem close to a death blow when you consider how the feds successfully ended the merger agreement between Time Warner Cable and CNBC-parent Comcast... and that was a year before Sanders and Trump rose to such national political prominence.

And if you think Hillary Clinton will save the cable giants or the rest of big business if she's elected, note that she only made her first comments about the AT&T/Time Warner deal on Tuesday, and all she would say was the weak and cautious promise to monitor the deal "closely," whatever that means. Clinton may be considered pro-business, but she doesn't seem poised to defend anyone or anything too effectively. It's likely the purposeful and more clearly spoken Warren and Sanders will eat any possible corporate defenders alive, even if one of them is in the White House.

A lot of industries are still blind to these new realities. And no industry seems more clueless right now than Big Pharma. If you think the presidential candidates have been spending big bucks and fighting hard, new reports out this week say the big drug companies are set to unleash a massive lobbying battle in Washington.

Several reports say the the Big Pharma lobbying group known as PhRMA is looking to spend as much as $300 million and pull out lots of other stops in order to defend higher prescription drug costs. But here's the problem: this is a battle the drug giants can't win. Public and political sentiment against expensive medicines and he companies that charge those prices is at a fever pitch.

"Several reports say the the Big Pharma lobbying group known as PhRMA is looking to spend as much as $300 million and pull out lots of other stops in order to defend higher prescription drug costs. But here's the problem: this is a battle the drug giants can't win."

All you need to do is remember this summer's outrage over Mylan's EpiPen prices to know this is true. This anger makes the ire many Americans have over rising cable bills look mild. And this time, there aren't a lot of Republicans in Congress who are likely to defend unpopular corporate sectors. The GOP Members of Congress proved that by piling on Stumpf during his hearing trial by fire and they did the same thing to Mylan CEO Heather Bresch during her turn in front of a Congressional committee.

The question is: Why do the drug companies think they can lobby or donate their way out of this situation, even with the $300 million war chest PhRMA is building? Politicians do love campaign donations, but all the money in the world can't overcome the kind of bad publicity that comes from supporting industries when they are in such a negative spotlight and doing things that anger so many people.

So let's get to that unique and effective way out of this mess. Because there is a way for the drug companies to keep their profits and even expand them, but it involves using less regulation not more. The simple answer is for Big Pharma to take its case directly to the public and advocate for eliminating the costly, legally-fraught, and ultimately obstructionist prescription drug process for all but the most dangerous medications.

And the whole thing can be summed up in three little letters: "OTC." Making more drugs available over the counter will lower prices for most drugs, get more people the treatment they need, and put the pressure on the regulators to justify every hurdle they continue to place in between patients and their needed medicines.

Sure, the Congressmen and Senators say they want lower drug prices. And they would like to deliver them to the voters. But the key words are: "they would like to deliver them." And Washington does not want to give up the massive power of the FDA, which has a spotty record of delivering safety in return for the long delays and costs it often imposes on needed new medicines and long-proven older ones.

Perhaps the best example is the way the politicians and the bureaucrats at the FDA "protect" us from the dangers of cholesterol reducing statins or birth control pills. In order to improve access and lower the costs of a popular statin called Zocor in 2004, Great Britain dropped the prescription requirement in the U.K. But at the same time, the FDA moved to keep that drug behind the counter in this country. It's still that way even though there have been no reports of widespread abuse of Zocor or the other OTC statins in Britain.

And the U.S. remains one of the only industrialized countries to require a prescription for birth control pills. In this case too, the OTC status for those pills in the rest of the world has not led to any significant amount of abuse or unsafe and careless use. In fact the American College of Obstetricians and Gynecologists officially recommended making birth control pills available over the counter four years ago.

Granted, moving to OTC isn't the best move for every drug for safety sake or for the sake of bigger profits. But freeing as many drugs as possible from the prescription barrier would be a net positive for everyone. Everyone but the politicians and regulators, that is, who lose power and potential campaign donations. And the drug companies need to make it clear that the only people standing in the way of those lower prices and fewer barriers are those politicians and regulators in Washington.

The politicians have been making the drug companies the bad guys for years. Now the industry needs to flip the script. Because in the game of political and cultural persuasion, it's often all about giving the public someone to hate more than you. Getting them to like you is a lot harder. And the politicians will surely get a lot more cooperative when they see they're the ones being more successfully demonized.

What about drug abuse, you ask? It's a legitimate question considering the widespread opioid abuse across the country. But those worries are being overblown by those with vested interests in keeping the prescription drug maze alive and probably a lot of well meaning people who may not realize that some of the most toxic medications are already over the counter and have been for decades.

For example, the active ingredient in Tylenol is acetaminophen, a substance that can be absolutely lethal to a person's liver. But we've never seen emergency rooms jammed with damaged livers. At some point we have to stop punishing responsible people by making them pay more or suffer in order to protect the irresponsible.

This is the best argument for even making drugs that are more likely to be abused available over the counter. Yes, some people will abuse those drugs. But why should people, especially poorer people, who legitimately need those drugs suffer or not get those drugs at all in order to protect those who have no regard for their own health? With state after state now legalizing marijuana just for recreational use, how in good conscience can the same states keep so many life-saving drugs behind the counter?

Again, the argument needs to be taken to the people first and the politicians second. Big Pharma needs come through on a promise that when the most popular and widely used drugs go over the counter, the prices will indeed go down. They need to explain the simple fact that the removal of RX barriers will allow them to sell more drugs, and thus reduce prices.

But again, pushing for more over the counter drugs would require the drug companies to realize their massive lobbyist army has outlived its usefulness. Even the best connected lobbyists aren't yielding such great results in this climate. Just ask Pfizer, who must have felt shocked when its top lobbyist Sally Sussman couldn't save its coveted merger with Allergan even though Sussman has close ties to President Obama and she and her father were top campaign donation bundlers for his 2008 campaign. Gratitude often has a short shelf life, and nowhere is it shorter than in Washington.

The most likely result is that PhRMA and the drug companies are going to spend the next year or two years learning this lesson the hard way and much of that $300 million will go down the drain the second Senator Warren, Senator Sanders, and a Republican or two cry foul at the latest drug price hike. They key mistake is Big Pharma still thinks it needs to try to play by the old lobbying game and just a little bit more hard work and a lot more money will fix everything. Instead, the industry's best chances involve taking the nearest exit off the Beltway jam.

Commentary by Jake Novak, CNBC.com senior columnist. Follow him on Twitter @jakejakeny.

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