Spending on lobbying thrives

Introduction

Manufacturers of pharmaceuticals, medical devices and other health products spent nearly $182 million on federal lobbying from January 2005 through June 2006, a Center for Public Integrity study of disclosure records shows.

Of that total, drug companies and their trade groups spent most of it, or $155 million, lobbying on a variety of issues ranging from protecting lucrative drug patents to keeping lower-priced Canadian drugs from being imported to the United States Drug interests employed about 1,100 lobbyists to do their bidding in each of the past two years.

Many of the bills targeted by lobbyists for drug interests last year were largely the result of public concerns over high drug prices and safety issues. Drug companies “have been facing an increasingly furious Congress and an increasingly disgruntled public,” said Amy Allina, program director at the National Women’s Health Network, a women’s health advocacy group.

The drug industry trade group Pharmaceutical Research and Manufacturers of America (PhRMA) spent more than $18 million on lobbying last year, more than any single drug company and the most the group spent in one year since 1998, the earliest year of this analysis. In all, PhRMA has spent $104 million since 1998.

Among drug manufacturers, Pfizer, the world’s largest drug firm, spent the most on lobbying last year — $12 million — bringing its total to more than $62 million since 1998. Merck spent about $48 million and Eli Lilly, Bristol-Myers and GlaxoSmithKline each spent around $40 million in the same period.

One effort by lawmakers that drew heavy drug industry lobbying was to undo a provision of the Medicare Prescription Drug, Improvement and Modernization Act of 2003. The legislation, which was passed after a huge lobbying blitz, guarantees that the nation’s seniors and the disabled who receive Medicare are eligible for some form of prescription drug benefit starting in January 2006.

The law, often cited as a poster child for the industry’s influence in Washington, bars the federal government from negotiating on prices of drugs supplied through Medicare. Many other bulk purchasers, including private insurers and federal departments such as the Veterans Health Administration, negotiate with companies for discounts.

A House bill sponsored in 2005 by Oregon Democrat David Wu would have allowed the Secretary of Health and Human Services to negotiate for lower prices for Medicare prescription drugs. A spokeswoman for Wu said the bill never made it out of committee. All similar bills met the same fate.

This session, the new Democratic House passed the Medicare Prescription Drug Price Negotiation Act, which requires price negotiation, and the Senate is considering a companion bill. But the White House has issued a statement that President Bush would veto any push to require drug price negotiations in the Medicare program.

Nearly all major drug companies lobbied heavily to influence how the Medicare prescription drug program would be set up and administered.

The drug industry also lobbied aggressively to stall legislation that would have allowed drugs to be imported from other countries and sold in the United States. For years seniors, health activists and even state government officials have been demanding laws that make it easier to import drugs from Canada and other countries, where prices are significantly lower.

At least half a dozen measures supporting such a move were introduced in the House and the Senate during the last Congress, but none prevailed. According to a bill introduced by Sen. Edward Kennedy, D-Mass., in January 2005, allowing “open pharmaceutical markets” could save American consumers at least $38 billion each year.

Other issues the industry lobbied heavily, among others, include:

• FDA reform: Drug safety has been a big issue on Capitol Hill, especially since two popular painkillers were recalled in 2004 and 2005 due to safety concerns. Several bills that would strengthen the Food and Drug Administration’s ability to monitor safety of marketed products were unveiled in the last Congress. The industry is opposed to any legislation that would give the FDA more oversight.
• Trade and patent: The industry lobbied the United States government to press other countries to guarantee drug companies strong patent protection through trade deals. It also campaigned against “foreign price control,” saying that foreign governments sometimes keep their drug prices artificially low.
• Project Bioshield: In 2004, Congress passed a landmark law to counter bioterrorism that would invest $5.6 billion to stockpile vaccines and other medications against bioterror. After the bill was passed, drug firms lobbied for what the Wall Street Journal called “more goodies” attached to the program, including the chance to extend patent rights on medications “that have nothing to do with homeland security.”

Lobbying on these and other issues was led by PhRMA, headed by former Congressman Billy Tauzin. The group has an annual budget of more than $200 million.

Tauzin, who joined PhRMA as its president and CEO in January 2005, registered to lobby for the first time last year. The former chairman of the House Committee on Energy and Commerce, which regulates the pharmaceutical industry, was not allowed under the Ethics Reform Act of 1989 to lobby his former congressional colleagues for one year.

Mimi Kneuer, Tauzin’s former chief of staff, is also a PhRMA lobbyist.

The Center’s latest study showed that the manufacturers of pharmaceuticals, medical devices and other health products have spent at least $855 million on lobbying from 1998, through June last year. Most of it, or $733 million, was spent by the drug manufacturers and their trade groups.

According to the Center for Responsive Politics, the pharmaceutical/health products sector gave nearly $107 million in federal campaign contributions. More than 70 percent of the contributions were made by individuals and Political Action Committees from the pharmaceutical industry.

Twenty top drug companies (including their subsidiaries) and two industry trade groups spent a total of $605 million on lobbying during the study period. These groups spent at least another $50 million in the second half of 2006. (According to IMS Health, which compiles drug industry data, these 20 firms had nearly 77 percent share of the $253 billion United States prescription drug market in 2005.)

National Women’s Health Network’s Allina said her organization and other groups that lobby against the industry are at huge disadvantage against such money and muscle power. “We are certainly dramatically outspent by them,” she said. “You look at the number of lobbyists — we are up against an army.”

Funding for this report was provided by the Nathan Cummings Foundation.