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“The only thing necessary for these diseases to the triumph is for good people and governments to do nothing.”

  


 

 

The Other Drug War:
Big Pharma’s 625 Washington Lobbyists


July 23, 2001
(Executive Summary 

This new Public Citizen report shows how the pharmaceutical industry fought last year, like never before, against the looming threat that Congress and President Clinton would provide senior citizens with drug coverage under Medicare.

Worried that the bulk buying power of Medicare would lead to discounted prices in the lucrative senior citizen market, the drug industry launched an unprecedented blitz of lobbying, campaign contributions, and so-called "issue" ads to help its political allies and attack its enemies.

The bill for that barrage recently became public with the availability of all lobby disclosure reports for the year 2000. Using these lobbying reports, along with data on the industry’s other political spending, "The Other Drug War: Big Pharma’s 625 Washington Lobbyists" shows the following:

·         The drug industry spent $262 million on political influence in the 1999-2000 election cycle: $177 million on lobbying, $65 million on issue ads and $20 million on campaign contributions.

·         The industry hired 625 different lobbyists last year to buttonhole lawmakers – or more than one lobbyist for every member of Congress. Unlike data on contributions and campaign ads, this comprehensive information on lobbying has recently become available (most lobbying details for the second half of 2000 didn’t become available from Congress until May 2001 and no organization has analyzed the data as thoroughly as Public Citizen).

·         The bill for this team of lobbyists in 2000 alone: $92.3 million – a $7.2 million increase over what the industry spent for lobbying in 1999. Brand name drug companies spent $90.0 million, generic drug companies spent $2.3 million.

·         Drug companies took advantage of the revolving door between Congress and other branches of the federal government and the industry. Of the 625 lobbyists employed in 2000, more than half were either former members of Congress (21) or others who previously worked in Congress or in other federal government positions (295).

·         The drug industry spent more (based on available data) on lobbying and other political persuasion than any other industry in 1999-2000.

·         The drug industry lobbyists were well-connected: 33 served as Chief of Staff to members of Congress; 11 others worked for the powerful House Ways and Means Committee, which has jurisdiction over a Medicare drug bill; eight others worked for the key Senate Judiciary Committee, where drug patent law is crafted.

·         In addition, six worked for the Bush I administration; five worked for former House Speaker Newt Gingrich (R-Ga.); four worked for former Senate Judiciary Chairman Orrin Hatch (R-Utah); five worked for current Senate Health, Education, Labor and Pensions Committee Chairman Edward Kennedy (D-Mass.); four worked for former Senate Majority Leader Trent Lott (R-Miss.); and three worked for current Senate Finance Committee Chairman Max Baucus (D-Mont.).

·         The drug industry lobbyists primarily worked against a Medicare prescription drug benefit and bills that might moderate rising drug prices. Public Citizen’s lobbying database shows that drug industry lobbyists worked most on bills pertaining to a Medicare drug benefit, mentioning the issue 2,542 times in last year’s lobby disclosure reports. Pricing issues – which included patent and drug re-importation legislation – were mentioned 2,403 times on disclosure reports.

·         In part, these lobbyists gained access to members of Congress and their staff members, thanks to an aggressive campaign of political contributions ($20 million in the 1999-2000 election cycle) and TV ads ($65 million in 1999-2000) that often supported Republican candidates and attacked Democratic candidates.

·         The industry made $20.1 million in direct contributions to candidates and party committees in the 1999-2000 election cycle, with 59 percent of that coming in huge soft money donations, often of $100,000 or more. Seventy-six percent of all drug industry contributions went to Republicans.

·         In 2001, the drug industry continues to expand its influence. The drug industry contributed $625,000 to the Bush-Cheney inaugural, and campaign contribution reports for the first half of 2001, which are just becoming available, show that the industry has dumped at least $1.4 million in soft money into party committee coffers already this year.

·         The industry also continues to use the revolving door between Capitol Hill and K Street to its advantage. Newly registered drug industry lobbyists in 2001 include former aides to ex-House Speaker Newt Gingrich (R-Ga.), new Senate Finance Committee Chairman Max Baucus (D-Mont.), and new Senate Health, Education, Labor and Pensions Committee Chairman Edward Kennedy (D-Mass.).

Introduction

The drug industry has much to protect in Washington, D.C. – mainly because the industry receives so many favors and privileges from the federal government. The federal government has conferred on the industry monopoly patents and patent extensions, tax credits worth billions of dollars a year, and research subsidies for both the most medically important drugs and also the top-selling ones.

The industry responded to this coddling by raising the average prescription price 10 percent last year.1

Not surprisingly, the drug industry has come under attack by senior citizen groups and large employers who have felt the pinch of rising drug prices. These groups want drug prices and industry practices – such as patent extensions that keep lower-priced generic drugs off the market – reined in.

In turn, the drug industry has worked hard to fight off any proposals that might moderate its prices and profits. That fight was carried out, in large part, by an army of well-connected lobbyists in Washington, D.C.

And it was successful – the industry’s tax breaks, research subsidies, monopoly patents, prices and profits remain unscathed.

The full bill for that barrage recently became public with the availability of all lobby disclosure reports for the year 2000 (lobby disclosure reports typically lag four-to-five months behind the year’s end).

The bottom line – which is detailed in this report – is staggering. The drug industry spent $262 million on political persuasion in 1999-2000. Based on available data that appears to be more than any other industry.

Who Didn’t Lobby for the Drug Industry?

The drug industry was very good for Washington’s "K Street" economy last year. One hundred and thirty-four firms were paid to lobby by the drug industry; and 55 different lobbying firms earned at least $100,000 from the drug industry in 2000. (Public Citizen defines the drug industry as pharmaceutical and biotechnology companies and their trade associations; the two share increasingly similar political agendas on research, intellectual property, drug benefit and pricing issues.)

The industry employed 625 different lobbyists in all and spent $92.3 million on lobbying in 2000 – a $16.8 million, or 22 percent, increase since 1997. (See Table 1 and Appendix A)

Table 1: Drug Industry Lobbying, 1997-2000

Year

1997

1998

1999

2000

Total

$75,527,755

$72,035,145

$85,089,533

$92,322,418

Source: Lobby Disclosure reports filed with the Secretary of the Senate and Clerk of the House pursuant to the Lobby Disclosure Act of 1995.

The overwhelming majority of these lobbyists worked for brand name drug companies (and their associations) last year, as opposed to generic drug companies. The brand name companies accounted for $90.0 million of the lobbying expenditures, while the generic companies reported lobbying expenses of just $2.3 million. (See Appendix B for a complete list of all 625 lobbyists.) This lobbying binge helped the drug industry top all others in political spending for 1999-2000. (See Table 2)

Table 2: Industry Comparison of Political Spending 1999-2000

Industry

1999-2000
Lobbying Total

Campaign Contributions

Total

Drug Industry

$177,411,951

$20,142,583

$197,554,534

Insurance

$127,849,428

$40,684,560

$168,533,988

Telephone Companies

$122,858,169

$20,746,350

$143,604,519

Electric Utilities

$119,573,052

$18,529,268

$138,102,320

Commercial Banks

$65,968,725

$24,938,794

$90,907,519

Oil & Gas Producers

$31,187,796

$33,276,659

$64,464,455

Automobile Manufacturers

$54,552,271

$2,237,531

$56,789,802

Tobacco

$44,700,310

$8,407,384

$53,107,694

Food Processors & Manufacturers

$21,269,672

$14,291,136

$35,560,808

Source: Lobbying totals are estimates (except for the drug industry) based on lobby disclosure data available from TRAC, Inc.  Year 2000 lobby total was calculated by doubling total for the first six months of 2000 (second-half reports not available yet through TRAC, Inc.). Campaign contributions based on data reported by Center for Responsive Politics

The army of lobbyists employed by the industry in 2000 is larger than the 297 lobbyists Public Citizen identified in its "Addicting Congress" report last year.2 In large part that’s because "Addicting Congress" focused only on lobbyists who worked on pricing and prescription drug benefit issues. This year, Public Citizen expanded its focus to include intellectual property and patent issues (which ultimately concern prices) and legislative proposals that dealt with re-importing drugs from countries where the prices are cheaper than in the U.S.

The drug industry acquired the services of the top firms in Washington D.C. in 2000. (See Appendix C) In the process, the industry hired 21 former members of Congress. (See Table 3) The former members were almost evenly divided by party affiliation, with 11 Republicans and 10 Democrats. They included former Senators Howard Baker (R-Tenn.), Dan Coats (R-Ind.) and Dennis DeConcini (D-Ariz.) and Representatives Bill Paxon (R-N.Y.), Vic Fazio (D-Calif.) and Bob Livingston (R-La.).

Table 3: Former Members of Congress Lobbying for Drug Industry, 2000

Lobbyist

Offices Held

Client(s)

Beryl Anthony

U.S. House of Representatives
(D-AR), 1978-93

Barr Laboratories

Birch Bayh

U.S. Senate (D-IN), 1963-81

The Cook Group, Inc.

Bill Brewster

U.S. House of Representatives
(D-OK), 1991-96

Novartis Corporation

Daniel Coats

U.S. Senate (R-IN), 1989-99. U.S. House of Representatives
(R-IN), 1981-89

Amgen, Inc.; PhRMA

Dennis DeConcini

U.S. Senate (D-AZ), 1977-95

Abbott Laboratories; Aventis Pharmaceuticals, Inc.; Bristol-Myers Squibb Co.; Glaxo Wellcome, Inc.; Pfizer, Inc.; Pharmacia; Schering-Plough Corporation

Butler Derrick

U.S. House of Representatives
(D-SC), 1975-94.

Bayer Corporation; Genentech, Inc.; PhRMA; Theragenics Corporation; Warner-Lambert Company

Billy Evans

U.S. House of Representatives
(D-GA), 1977-83

Pharmacia

Vic Fazio

U.S. House of Representatives
(D-CA), 1979-98

PhRMA; Schering-Plough Corporation

Michael Flanagan

U.S. House of Representatives
(R-IL), 1995-96

Immunex Corporation

Willis Gradison

U.S. House of Representatives,
(R-OH), 1975-93.

Bristol-Myers Squibb Co.; Schering-Plough Corporation

Andy Ireland

U.S. House of Representatives
(D-FL), 1977-84, and
(R-FL), 1984-93

Schering-Plough Corporation

Norman Lent

U.S. House of Representative
(R-NY), 1971-93

Pfizer, Inc.

Robert Livingston

U.S. House of Representatives
(R-LA), 1977-99

Schering-Plough Corporation

Raymond McGrath

U.S. House of Representatives
(R-NY), 1981-93

E.I. Dupont de Nemours and Company

Robert Michel

U.S. House of Representatives
(R-IL), 1957-95

Johnson & Johnson

Bill Paxon

U.S. House of Representatives
(R-NY), 1989-98

Johnson & Johnson

Martin Russo

U.S. House of Representatives
(D-IL), 1975-93

Johnson & Johnson

Robert Walker

U.S. House of Representatives
(R-PA), 1977-96.

Immunex Corporation; Wyeth-Ayerst Pharmaceuticals

Vin Weber

U.S. House of Representatives,
(R-MN), 1981-93

PhRMA; Schering-Plough Corporation

Alan Wheat

U.S. House of Representatives
(D-MO), 1983-94

SmithKline Beecham

William Zeliff, Jr.

U.S. House of Representatives
(R-NH), 1991-97

Schering-Plough Corporation

Source: Lobby Disclosure reports filed with the Secretary of the Senate and Clerk of the House pursuant to the Lobby Disclosure Act of 1995.

The industry also hired 19 of the lobbying firms that made Fortune magazine’s list of the 20 most influential firms in Washington D.C.3 These firms – and their 460 lobbyists – were brought in to supplement the 165 corporate lobbyists who worked in-house for drug companies and their two major trade associations – Pharmaceutical Research and Manufacturers of America (PhRMA) and the Biotechnology Industry Organization (BIO). All the drug companies and groups that spent more than $1 million on lobbying in 2000 are shown in Table 4, along with the number of lobbyists they employed.

Table 4: Lobbying Expenditures and Number of Lobbyists,
For Drug Companies and Trade Groups that Spent at Least $1 Million in 2000

Company

Total 2000

# of Lobbyists

Amount

Schering-Plough Corporation

48

$7,940,000

PhRMA

67

$7,480,000

Merck & Co., Inc.

23

$5,840,000

Eli Lilly and Company

27

$5,300,000

Abbott Laboratories

15

$4,840,000

Bristol-Myers Squibb Company

57

$4,660,000

American Home Products

16

$4,037,551

Monsanto Co.

33

$4,000,000

Pharmacia & Upjohn

31

$3,782,960

The Procter & Gamble Company

5

$3,541,724

Pfizer Inc

81

$3,440,000

Glaxo Wellcome, Inc.

32

$3,127,000

SmithKline Beecham

15

$2,860,000

Biotechnology Industry Org.

30

$2,857,000

Johnson & Johnson

41

$2,780,000

Novartis Pharmaceuticals Corp.

38

$2,700,000

Amgen, Inc.

44

$2,680,000

Baxter International

21

$2,480,000

Hoffmann-La Roche Inc.

20

$2,422,095

Dow Chemical Co.

6

$1,800,000

Aventis Pharma AG

3

$1,560,000

Michigan Biotech. Institute

2

$1,560,000

Bayer Corporation

10

$1,336,775

Genentech, Inc.

28

$1,240,000

Becton, Dickinson & Co.

10

$1,042,713

Genzyme Corporation

23

$1,000,000

Grand Total

625

$92,282,418

Source: Lobby Disclosure reports filed with the Secretary of the Senate and Clerk of the House pursuant to the Lobby Disclosure Act of 1995. Note: The number of lobbyists in the second column does not equal 625 because not all companies that lobbied are shown in the table; in addition, some lobbyists work for more than one company.

Most Popular Outside Lobbyists

The drug industry employed some Washington lobbying stalwarts, such as Thomas Boggs (of Patton Boggs) and Harry McPherson (of Verner, Liipfert, Bernhard, McPherson & Hand). It also hired younger rainmakers, such as Deborah Steelman (of Steelman Health Strategies) and Anthony Podesta (the brother of President Clinton’s former chief of staff). (See Table 5)

Table 5: Most Popular Drug Industry Lobbyists in 2000
and Their Revolving Door Connections

# of Clients

Name

Former Positions

7

George Olsen

Former Member, Rules Advisory Committee, U.S. Court of Veterans Appeals

7

Edward Baxter

Chief Counsel and Staff Director, Subcommittee on Patents, Copyrights, and Trade Marks, Senate Committee on the Judiciary

7

Denise Henry

Staff Member, Select Committee on Aging, U.S. Senate

7

Dennis DeConcini

Member, U.S. Senate (D-Ariz.), 1977-95

7

Thomas Parry

Chief of Staff and Chief Counsel, Senator Orrin Hatch (R-Utah)

7

Romano Romani

Chief of Staff, Senator Dennis DeConcini (D-Ariz.)

7

Linda Skladany

Acting Chairman (1989-91) and Commissioner (1989-91), Occupational Safety and Health Review Commission

6

Shannon Davis

Legislative Assistant (1992-94), Rep. Sam Johnson (R-Texas)

6

Larry Smith

Sergeant at Arms (1983-85), U.S. Senate; Staff Director, Senate Rules Committee

6

Karina Lynch

Counsel to Senate Permanent Subcommittee on Investigations, Committee on Governmental Affairs, 1999-2000

6

James Hawkins

Professional Staff Member, Senate Health, Education, Labor and Pensions Committee under Chairman Jim Jeffords
(R-Vt.)

6

Melissa Schulman

Policy Director, Representative Steny Hoyer (D-Md.), 1995-98; Executive Director, House Democratic Caucus, 1990-94

6

Steven Hilton

Deputy Assistant to the President and Deputy Director, Office of Public Liaison, The White House, 1993-95

6

Matthew Gelman

Floor Assistant, Democratic Whip David Bonior (D-Mich.)

6

Martin Gold

Counsel to the Senate Majority Leader, Senator Howard Baker, Jr. (R-Tenn.); Minority Staff Director and Counsel, Senate Rules Committee

5

Judith Butler

Chief of Staff, Senator Olympia Snowe (R-Maine)

5

April Lehman

Former Legislative Assistant, House Republican Leader Richard Armey (R-Texas)

5

Brenda Reese

Conference Coordinator, House Republican Conference

5

Jeffrey Kushan

Biotech Patent Examiner (1987-91), U.S. Patent and Trademark Office, Department of Commerce

5

David Castagnetti

Chief of Staff, Senator Max Baucus (D-Mont.); Chief of Staff, Representative Norman Y. Mineta (D-Calif.)

5

David Bockorny

Special Assistant to the President for Legislative Affairs, The White House, Reagan Administration

5

Gary Heimberg

Attorney-Advisor, Chief Administrative Judge, Board of Contract Appeals, Department of Transportation, 1985-87

5

Jeff Bergner

Staff Director, Senate Foreign Relations Committee, 1985-86

4

Marguerite Donoghue Baxter

Policy Coordinator, National Cancer Institute, National Institutes of Health, Department of Health and Human Services, 1985-88

4

Harry Sporidis

Senior Legislative Aide, Representative James C. Greenwood (R-Penn.)

4

Steve Jenning

Chief of Staff, Senator Ron Wyden (D-Ore.), 1996-97

4

Deborah Steelman

Associate Director for Human Resources, Veterans and Labor, Office of Management and Budget (1986-87)

4

Tim Powers

Deputy Director for Legislative Affairs, Republican National Committee

4

Andrew Shoyer

Legal Advisor, U.S. Mission to the World Trade Organization

4

Barry Direnfeld

Chief Legislative Counsel, Senator Howard Metzenbaum
(D-Ohio)

4

James Musser

Aide, Representative Jim Bunning (R-Ky.)

4

Butler Derrick

Member, U.S. House of Representatives (D-S.C.), 1975-94; Deputy Majority Whip, and Vice Chairman