Prescription for power

Introduction

The deep-pocketed pharmaceutical and health products industry has lobbied on more than 1,400 congressional bills since 1998 and spent a whopping $612 million* during that period, a Center for Public Integrity review of lobbying records revealed. Drug companies and manufacturers of health products have used more professional lobbyists in the last six and a half years—almost 3,000—than any other organized interest, the analysis also found. In comparison, the insurance industry, second-largest in terms of spending, spent $543 million* in the same period and employed just over 2,000 lobbyists.

In recent years, the pharmaceutical industry has scored a series of legislative victories on Capitol Hill, which could potentially translate into tens of billions of dollars of additional revenue to drug companies annually. The federal government will buy drugs worth at least $40 billion from the companies every year once the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 goes into effect next year. In addition, critics have accused the industry of having undue influence over the Food and Drug Administration, the agency that regulates pharmaceutical interests.

Industry-watchers say the drug companies’ recent successes in Congress and with the FDA show how effective their lobbying campaign is. “The [lobbying] money is very well-spent,” said Dr. Jerry Avorn, author of Powerful Medicines: The Benefits, Risks, and Costs of Prescription Drugs. “The fact that we are the only country in the industrialized world that does not have any provision for negotiating drug prices, the fact that we are spending far more per capita on drugs than any other country and the fact that when legislation is written it often seems to be exactly the kind of legislation that benefits the pharmaceutical industry [shows] they are getting their money’s worth.”

In 2003, the year that the legislation passed allowing prescription drug coverage through Medicare, 298 pharmaceutical and health industry groups spent $114 million* lobbying the federal government. They employed 1,274 professional lobbyists.

The passage of the new Medicare law had been an industry priority for many years. No wonder: The 415-page legislation contains several windfalls for drug companies, including a controversial provision that prohibits the federal government from negotiating with companies on drug prices.

The industry has also mounted campaigns to weaken federal regulation, strengthen patent protections, extend patents, win tax credits and get the federal machinery to protect its interests abroad, among other issues.

Other big wins on Capitol Hill include the extension of the Prescription Drug User Fee Act through September 2007, authorizing the FDA to continue collecting industry money to process drug approval applications. The FDA expects to take in more than $284 million in user fees this year alone. The user fee has helped FDA to hire more than 1,200 new employees—and thereby to reduce drug approval time. But many observers, such as Avorn and Thomas Moore, a fellow at George Washington University’s Center for Health Services Research and Policy and author of Prescription for Disaster, a book on drug safety, oppose the arrangement because that money gives the industry greater leverage. The user fee act implies that the main mission of the FDA is to facilitate speedy approval of drug, Avorn said. He added that the legislation and the agency’s “shrinking capacity to follow post-marketing safety problems, all together suggest that the needs of the industry have loomed larger at FDA than public health mission.”

“The User Fee Act has left the pharmaceutical industry paying a very significant share of FDA’s total budget,” Moore said. “Each reauthorization is sort of another step to come to the bargaining table, if you will, to see if they can obtain some additional benefits.”

Many critics also argue that by making the FDA dependent on the industry, it also opens the doors for a culture of conflict-of-interest to thrive.

In 2002, the industry also succeeded in getting the Best Pharmaceuticals for Children Act passed. The law encourages companies to test drugs in kids by extending patents for six months.

Drug interests have also successfully blocked a number of bills that would have affected its bottom line, among them, legislative efforts to control drug prices, legalizing drug importation, closing loopholes in patent laws etc.

Former government insiders

Leading the industry’s lobbying efforts was the trade group Pharmaceutical Research and Manufacturers of America, the 10th* largest lobbying organization in the country. PhRMA alone spent more than $65 million* on lobbying in the last six and a half years.

Besides its 38 in-house lobbyists, PhRMA employed 160 lobbyists in 2003-2004. Since 1998, the organization used 64 different firms to lobby 35 federal agencies on 38 issues separately identified under the Lobbying Disclosure Act of 1995.

The Biotechnology Industry Organization, a trade organization that represents biotech and biomedicine companies, spent more than $20 million* since ’98.

The Center analysis revealed the extent to which the industry used former government insiders to influence the federal government. Of the nearly 3,000 professionals who lobbied for the industry, 805 were former federal officials, including more than 50 former members from the House and a dozen from the Senate.

Both PhRMA and BIO are headed by former members of Congress. PhRMA’s president is former Rep. Billy Tauzin (R-La.), who chaired the House energy and commerce committee until last year and was one of the co-sponsors of the Medicare legislation. The House Energy and Commerce Committee’s jurisdiction includes the drug industry. Tauzin’s former colleague on the committee, James Greenwood (R-Pa.) heads BIO. The former Pennsylvania congressman, who sponsored or backed numerous bills favorable to the industry, including the Best Pharmaceuticals for Children Act of 2002, joined BIO last July under controversial circumstances. As chairman of the Energy and Commerce Committee’s Subcommittee on Oversight and Investigation, just before he accepted the position he was scheduled to hear testimony on possible links between antidepressant use and suicide among children. Because of the conflict of interest, he cancelled the hearing.

Both Tauzin and Greenwood have not yet registered to lobby—both recently retired congressmen have to wait for at least a year before they can legally lobby their colleagues. But the industry has employed at least 48 former members of the U.S. House of Representatives and 15 ex-senators to lobby.

That includes Sens. Bob Dole (R-Kan.), Birch Bayh (D-Ind.), Lloyd Bentsen (D-Texas), Dennis Deconcini (D-Ariz.), Steve Symms (R-Idaho), Tim Hutchinson (R-Ark.) and Howard Baker (R-Tenn.) and Reps. Bob Livingston (R-La.), Bill Paxon (R-N.Y.) and James Blanchard (D-Mich.). Dole and Bayh are the authors of the Bayh-Dole Act of 1980, which gave the drug industry greater access to government-funded research.

The Center’s findings didn’t surprise the industry’s longtime critics. Rep. Bernie Sanders (I-Vt.), who has introduced several measures in Congress to regulate drug companies, says that the pharmaceutical industry has the most powerful lobby in Washington, D.C.. “Uniquely in the industrialized world, our government does not regulate the pharmaceutical industry—rather the pharmaceutical industry regulates the government, which is why Americans pay by far the highest prices in the world for medicines they need,” he told the Center.

Note to readers: This story has been reposted. Since the report was originally released, the Center for Public Integrity has changed the way it calculates lobbying expenditures to reflect a more stringent methodology for determining the total amounts. The change was made to correct the potential overstatement of totals. Figures or relevant text that have been changed are indicated with asterisks. (5/2/2006)