Sunday, January 12, 2003

BY ROBERT COHEN AND ED SILVERMAN
Star-Ledger Staff

After sending millions to the GOP in the last election, the nation's brand-name drug makers are counting on a friendly White House and Republican Congress as they press an ambitious agenda that could boost company fortunes for years.

The industry's top priority is approval of a government-financed prescription drug benefit for seniors without price controls or restrictions on medicines dispensed to Medicare recipients.

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The pharmaceutical companies also are intent on blocking proposals to speed cheaper generic drugs to market and to make it easier to import lower-cost medicines from Canada. And they want the Bush administration's help protecting drug patents overseas and cooperation in getting faster government approvals of new medicines.

"The power and influence of the pharmaceutical industry has increased enormously since the mid-term elections," said Robert Blendon, a professor of health policy at Harvard University.

"They probably will not win every battle, but there is a dramatically more favorable climate for the drug industry," he said. "They committed high levels of campaign support to Republicans, and the Congress and the Bush administration will be sensitive to their concerns."

The pharmaceutical industry, which contributed more than $14 million to Republicans in the last election, downplays its influence in the GOP-dominated capital. Industry executives point to the influence of senior citizen groups on the Medicare prescription drug issue and to a recent public disagreement with the White House over a plan to ease government rules to benefit generic drug makers.

Ian Spatz, the executive director of public policy for Merck & Co., said the industry is "not looking for a sea change" now that the Republicans control the Senate and the House.

A WILLING EAR

"There's a majority of Republicans, but it's only a few ... and a slim majority one way or the other may not make a huge difference," said Spatz. "We like to think whoever is in charge will listen to us if we're right about the issue."

The November elections gave Republicans a narrow Senate majority and continued control of the House.

The industry's political contributions favored Republicans overwhelmingly in that election. Only 21 percent of the nearly $18 million the industry donated to political party committees and House and Senate candidates went to Democrats, according to the nonpartisan Center for Responsive Politics.

The industry has more than 600 lobbyists in Washington, according to a June report by watchdog group Public Citizen, and spent $403 million on lobbying from 1997 to 2001.

Recent evidence of the industry's clout came during the lame duck Congress following the November elections. Without debate, an amendment was attached to Department of Homeland Security legislation that shields Eli Lilly & Co. from liability lawsuits concerning its past use of a mercury-containing preservative once added to some childhood vaccines.

The Eli Lilly provision, later signed by President Bush, was championed by Rep. Tom DeLay (R-Texas), the new House majority leader, and proposed originally by Sen. Bill Frist (R-Tenn.), a heart surgeon who is now the new majority leader in the Senate. Eli Lilly ranks among the drug industry's top Republican contributors.

On Friday, GOP leaders said they would repeal the much-criticized vaccine provision but would revisit the liability issue and other concerns raised by vaccine makers later this year.

THE AGENDA

For the new 108th Congress, Jeffrey Trewhitt, a spokesman for the Pharmaceutical Research and Manufacturers of America, said the focus will be passing a Medicare prescription drug benefit. The trade group gave Republicans $2.5 million in unrestricted soft money the last election, ranking it 10th among all contributors during that period.

Despite the GOP majorities, Trewhitt said winning a comprehensive benefit will require a "bipartisan agreement."

Trewhitt said it is essential that the Congress adopt a "private sector approach" to Medicare drug coverage, "not a government-funded program with price controls." He said the industry also is opposed to any provisions that would establish a Medicare list of preferred drugs that leaves out some medications, including higher-priced, brand-name pharmaceuticals.

Bush has made a prescription drug benefit a priority, and lawmakers from both parties said during the midterm election campaign that they were committed to a plan to help seniors pay for their medicine. Various proposals are expected in the next few weeks.

In the past few years, Republicans have agreed with the pharmaceutical industry that the drug benefit should be provided through private insurers under a market-based system without price controls. The Democrats want a government-administered program with some mechanism to restrain prices, which rose 17 percent on average in 2001, according to IMSHealth, a research firm.

In the last Congress, Republicans pushed a 10-year, $350 billion plan while Democrats advocated spending almost $600 billion. The growing federal budget deficit may make it difficult for Congress to provide a generous benefit.

On other fronts, the industry intends to fight a bill reintroduced last week by Sens. Charles Schumer (D-N.Y.) and John McCain (R-Ariz.) that would eliminate loopholes in the law used by brand-name companies to extend their drug patents and delay federal approval of generic products. The measure was approved by the Senate last year, but never taken up in the House.

A MATTER OF LOOPHOLES

Before the November elections, the Bush administration proposed new regulations to clamp down on some of those loopholes. The industry maintains the proposed change will rob them of a "fair opportunity" to compete, though the Bush proposal is far more modest than the Senate bill.

Drug companies also will be fighting legislation making it easier for consumers, pharmacists and wholesalers to import lower-priced drugs from Canada. The industry maintains such imports may endanger public health.

Another key pharmaceutical industry issue is international trade. Drug makers worry global trade talks will dilute their patent rights overseas, because poor nations want to buy or copy lower-priced generics. Drug makers have been willing to make patent concessions only for drugs used for epidemics, such as AIDS, malaria and tuberculosis.

"That's one of the greatest threats to the global pharmaceutical industry," said Robert Freeman, director of public policy for AstraZeneca plc. "This is one area where we'd expect the administration to defend our patent rights very aggressively."

Meanwhile, drug makers are lobbying the Food and Drug Administration and Congress to prevent restrictions on their direct-to-consumer advertising on television and in newspapers and magazines.

Industry officials also say they hope for a receptive audience from Mark McClellan, the new FDA commissioner. A senior policy director for health care and related economic issues for the White House, McClellan has already made a commitment to the industry to try to speed drug and vaccine approvals.

Drug makers, anxious for new drugs to please investors, are upset over what they say is an overly cautious regulatory approach over the past few years. Last year, only 17 drugs were approved by the FDA, down from 24 in 2001 and 27 in the previous year.