AAM AT A CROSSROADS — Simmering tensions inside one of the nation’s leading trade organizations for generic drugmakers could threaten its lobbying clout at a crucial time for the industry, Megan reports. The Association for Accessible Medicines has lost some members or reduced dues to keep others, contributing to the need for more than $4 million in budget cuts that culminated in layoffs of top public affairs, trade policy and advocacy executives, as previously reported by POLITICO, and its smallest overall revenue in seven years. It comes as the organization attempts to raise its profile with the public and policymakers — including pushing for expanded access to generics and biosimilars — and it searches for a permanent CEO. Ten people with knowledge of AAM's inner workings said the turmoil imperils the industry’s position in Washington. The people — including former employees, people who’ve worked in association management and lobbyists who’ve represented generic drugmakers — were granted anonymity to discuss the sensitive topic. “In baseball, there's something called the Golden Sombrero — it's when a guy strikes out four times in a game. It's really embarrassing,” said an executive who has worked at several health care trade associations and was given anonymity to speak about the situation. “Their Golden Sombrero is a dysfunctional board, no money, no staff, no agenda. That's a pretty bad combination.” While the people said AAM has a promising vision for elevating the generic and biosimilar industries, they worry the group may be too under-resourced to execute it. And a diminished trade group for the industry could have negative consequences for its members. In an email to POLITICO, AAM broadly disputed the characterization, saying the organization is “right-sized” and its board is united in its defense of an industry critical to American medicine, accounting for 91 percent of drugs sold in the U.S., but 18 percent of spending on medicines. And the group is active on Capitol Hill: This week, interim CEO David Gaugh was part of a small, closed-door roundtable of experts advising the Senate HELP Committee as it works to draft drug pricing legislation covering generic drugs and pharmacy benefit managers. But the group is down to only 19 people on staff, following a number of departures last year, the layoffs and the recent exit of Steve Selde, the former director of its Biosimilars Council, who went to the Centers for Medicare and Medicaid Services. There are two federal lobbyists in AAM’s government affairs shop and three lobbyists handling state issues. AAM said it wants to add a third lobbyist to its federal team and will be filling positions in other areas. However, its stable of lobbying, public relations, research, advertising and legal firms is likely to shrink, said five people familiar with the situation. A diminished generic and biosimilars trade group could have negative consequences for its members: Only eight of its 23 member companies employ in-house lobbyists in Washington, outside firms or both. Three others disbanded their lobbying representation in recent years, disclosures show. WELCOME TO THURSDAY PULSE. Find a big meteorite recently, maybe in a stretch of Maine near the Canadian border? One museum is willing to pay $25,000 for the rocks from space. Or maybe you came across a good tip for us instead — drop us a line at dpayne@politico.com and kmahr@politico.com. TODAY ON OUR PULSE CHECK PODCAST, host Ruth Reader talks with Carmen Paun about the steps being taken by the Office of National Drug Control Policy after the White House designated the use of a horse sedative combined with fentanyl as an “emerging threat” to public health.
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