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

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

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

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

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