DRUGS, PARTY POLITICS, PROFITS

Bush Profits from the Medicare Drug War

Posted on 06-30-2004 4:02 PM EDT

In the final push for Medicare prescription drug legislation, the pharmaceutical industry, HMOs and related interests spent more money and hired more lobbyists in 2003 than ever before, according to The Medicare Drug War, a new report by Public Citizen. The pharmaceutical and managed care industries spent a combined $141 million last year. Drug makers and HMOs hired 952 individual lobbyists in 2003 – nearly half of whom had "revolving door" connections to Congress, the White House or the executive branch.

Drug industry and HMO executives and lobbyists also rank among President Bush’s elite fundraisers. Twenty-one executives and lobbyists achieved "Ranger" or "Pioneer" status. These Rangers and Pioneers have collected at least $3.4 million for Bush so far. In addition, two of John Kerry’s biggest backers were lobbyists on the drug industry payroll in 2003.

For the full report: http://www.citizen.org/documents/MedicareDrugWarReportREVISED72104.pdf

June 23, 2004 from http://www.citizen.org/pressroom/release.cfm?ID=1733

Drug Industry and HMOs Deployed an Army of Nearly 1,000 Lobbyists to Push Medicare Bill, Report Finds

Study Shows Special Interests Spent $141 Million in 2003, Hired 431 Lobbyists With “Revolving Door” Connections to Congress and the White House

WASHINGTON, D.C. – In the final push for Medicare prescription drug legislation, the pharmaceutical industry, HMOs and related interests spent more money and hired more lobbyists in 2003 than ever before, according to a report issued today by Public Citizen.

The pharmaceutical and managed care industries spent a combined $141 million last year, according to Public Citizen’s analysis of newly released federal lobbying disclosure records. Drugmakers and HMOs hired 952 individual lobbyists in 2003 – nearly half of whom had “revolving door” connections to Congress, the White House or the executive branch. That’s nearly 10 lobbyists for every U.S. senator.

“The Medicare Modernization Act, a top priority of President Bush, promises to safeguard industry profits at the expense of America’s taxpayers,” said Frank Clemente, director of Public Citizen’s Congress Watch. “Considering the legion of lobbyists unleashed by pharmaceutical companies, HMOs and allied industry front groups, no wonder taxpayers ended up with a bill tailor-made to serve these special interests instead of senior citizens.”

Since 1997, Public Citizen has conducted an annual study of Washington lobbying by the pharmaceutical industry. Today’s report, The Medicare Drug War, exposes the extent of the drug industry’s latest lobbying barrage. Among its findings:

In 2003, the drug industry spent a record $108.6 million on federal lobbying activities and hired 824 individual lobbyists – both all-time highs. In 2002, based on a more narrowly defined survey, the drug industry spent $91.4 million and hired 675 lobbyists.

This army of lobbyists helped ensure that the new drug benefit will be administered by private companies. The new law expressly prohibits the government from using its bargaining clout to negotiate lower prices and effectively bans the “reimportation” of cheaper drugs from Canada.

The Pharmaceutical Research & Manufacturers of America (PhRMA), which represents more than 40 brand-name drug companies, shelled out more than $16 million last year on lobbying, a 12.5 percent increase from the year before. PhRMA alone hired 136 lobbyists.

HMOs and other managed-care health plans mounted an extensive lobbying effort. Managed care companies that lobbied on the Medicare bill spent $32.3 million on federal lobbying in 2003. HMOs and health plans hired 222 lobbyists to work on the Medicare bill.

Managed care lobbyists helped ensure their clients got a windfall in the bill – $531.5 billion over 10 years based on data from the Medicare actuary – as enrollment in managed care plans is expected to climb from 12 percent to 32 percent of all Medicare beneficiaries.

The Blue Cross Blue Shield Association spent more on lobbying than any other health plan in 2003, shelling out $8.1 million. The two major industry trade associations – the American Association of Health Plans (AAHP) and the Health Insurance Association of America (HIAA), which merged in October 2003 – spent a combined $8.3 million.

Both the pharmaceutical and managed care industries relied heavily on lobbyists with “revolving door” connections. In all, 431 lobbyists employed by the drug industry or HMOs – or 45 percent of all their lobbyists – previously worked for the federal government. Among them were 30 ex-U.S. senators and representatives – 18 Republicans and 12 Democrats.

At least 11 top staffers who left the Bush administration lobbied for the drug industry and HMOs in 2003. White House and administration insiders working as lobbyists on the Medicare bill included several former top advisers to Bush, Vice President Dick Cheney and Department of Health and Human Services (HHS) Secretary Tommy Thompson.

The exodus from the administration has accelerated since Bush signed the new Medicare law. At least four key Bush administration officials – most notably Tom Scully, administrator of the Centers for Medicare and Medicaid Services (CMS) – have exited to help industry clients benefit from the Medicare bill that they wrote or promoted. Another six top congressional staffers at the center of negotiations over the Medicare bill now lobby for drug companies or HMOs.

The revolving door spins both ways. Three prominent drug industry and HMO lobbyists have recently moved into senior health policy positions at HHS. Another is now a spokesman for the Bush campaign. And the lead White House negotiator on the Medicare bill – presidential adviser Doug Badger – previously represented half a dozen drug companies as a lobbyist.

Drug industry and HMO executives and lobbyists ranked among Bush’s elite fundraisers. Twenty-one executives and lobbyists achieved “Ranger” or “Pioneer” status by collecting at least $200,000 or $100,000, respectively, for Bush in the 2000 or 2004 campaigns. (In addition, two of presumptive Democratic nominee John Kerry’s biggest backers were lobbyists on the drug industry payroll in 2003.)

“The revolving door between the White House and K Street has made the Bush administration indistinguishable from the industry,” said Craig Aaron, senior researcher for Public Citizen’s Congress Watch and lead author of the report. “If it wasn’t bad enough that most of the key negotiators working on the Medicare bill were preparing to cash in on K Street as soon as it passed, Bush has brought in more drug industry and HMO insiders to implement and promote this disastrous new law.”

Published on Friday, November 8, 2002 by the Los Angeles Times

Drug Industry Poised to Reap Political Dividends
Pharmaceutical firms and other major donors to winning GOP candidates are ready to push their legislative agendas in Washington

by Vicki Kemper

WASHINGTON -- Few industries campaigned harder than pharmaceutical manufacturers to elect Republicans to the new Congress, and few industries are better positioned to reap the rewards of the election returns, analysts said Thursday.

"The pharmaceutical industry may be at the front of the line of groups looking at the next two years as an opportunity to make a lot of progress on their issues," said Larry Makinson, senior fellow at the nonpartisan Center for Responsive Politics in Washington.

It is a long line, with some related industries -- insurance companies, HMOs and physicians -- crowded near the front, along with energy companies, financial services and much of the rest of corporate America's elite.

Their wish lists have many items in common, notably less regulation and more tax incentives.

For drug manufacturers, that translates to no price controls, no patent reform and laws that keep drugs that are sold at cut rates abroad from being resold in the U.S. at the lower prices.

For insurance companies, it means tax credits to help the uninsured buy health coverage -- but no requirement that mental illnesses be covered like other diseases. HMOs want to put an end to efforts to make it easier for patients to sue their health plans, and physicians are seeking malpractice reform and higher Medicare payments.

In every case, the new Republican-controlled Congress will make an industry's preferred outcome more likely.

And while drug manufacturers and other health-care industries were quick to describe Tuesday's election results as proof that voters agree with them on key issues, "the real story here is money," said John Rother, director of policy and strategy at AARP, the 35-million-member seniors' lobby.

Robert Blendon, a professor at the Harvard School of Public Health, agreed that the pharmaceutical industry's election day successes said more about the effectiveness of its political spending than voters' views.

"It was really the money they spent in the hinterlands helping candidates and the money they spent on advertising to soften the blow of the issues so the number of voters who would vote on these issues would go down," he said.

As of June 30, drug and nutritional supplement manufacturers ranked ninth among more than 80 industry groups in direct contributions to congressional candidates and political parties, according to Federal Election Commission records compiled by the Center for Responsive Politics. At that time, 73% of its $18.1 million in contributions had gone to Republican candidates and party committees.

But those numbers reflect only a portion of what the $400-billion-a-year industry spent to influence Tuesday's elections. When FEC records from the last four months become available, the industry's contribution total will surely go up.

On top of that, drug manufacturers consistently rank among the top two industry groups in money spent to lobby Congress. With more than 400 registered lobbyists -- nearly one for each of the 535 members of Congress -- the pharmaceutical industry spent nearly $97 million in 2000, according to records filed with the Secretary of the Senate and compiled by the Center for Responsive Politics.

The industry and its sponsored advocacy groups also spend tens of millions of dollars on print and television ads. In the months before Tuesday's elections, they used photographs of sick children and frail seniors to suggest that generic drugs would make them worse.

While the Pharmaceutical Research and Manufacturers of America, or PhRMA, would not reveal the size of its advertising budget, an industry official who spoke on condition of anonymity said published reports citing ad expenditures of $30 million a year were "not inaccurate."

The United Seniors Assn., an advocacy group financed almost entirely by PhRMA, Pfizer Inc. and other drug companies, reportedly spent more than $12 million in the campaign's closing weeks to air radio and television ads that encouraged voters to support Republican candidates.

All that spending appears to have paid off, analysts said.

The industry's top political priority, for example, a Medicare prescription drug benefit run by private insurance companies rather than the government, is virtually "settled by the outcome of the elections," said Blendon. "That's what they spent their money to get."

Drug manufacturers "won't win everything they want" from the Republican Congress, he added, "but the something that gets done will be relatively nonthreatening. They are direct beneficiaries of the outcome of the election."

This year, most health-care legislation languished in stalemates between the Republican-majority House and the Democratic-controlled Senate. The House, for example, passed a Medicare prescription drug benefit that would be administered by private insurance companies; the Senate debated three versions of a drug benefit but did not pass any of them.

Likewise, while the Senate overwhelmingly passed a bill making it easier for generic drugs to get to market, the House did not consider it. Similar divisions stalled action on tax credits for the uninsured, expanded legal rights for HMO patients and a measure that would have prevented health insurance plans that cover treatment for mental illness from limiting that coverage.

"The industry works with Republicans and Democrats," the industry official said. "But over the last three or four years, some Democrats said they were going to make prescription drugs the campaign issue."

The industry's political efforts were needed to help the public see through "that demagoguery and rhetoric" and realize that the continued production of life-saving medicines -- not drug prices or the demonization of drug companies -- was the key issue, the official said.

A survey conducted for PhRMA last week asked whether "politicians who are criticizing prescription drug companies are motivated primarily by a desire to gain political advantage or by a desire to lower drug prices."

Of the 1,000 voters in the survey, 51% said drug-company criticism was mostly about politics, leading PhRMA President Alan F. Holmer to conclude that "voters do not want to jeopardize the miracle of life-saving innovation in modern medicines."

Voters were not asked whether they thought drug prices were too high.

From http://www.commondreams.org/headlines02