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http://www.newsday.com/news/health/ny-vpkre042809291aug04.story
PRESCRIPTION DRUG BENEFITS
Lobbies Force A Bitter Pill
The drug industry has a lock
on Congress, and most of us don't realize how
bad Medicare is
By Vikki Kratz
Vikki Kratz is an
investigative reporter at The Center for Responsive
Politics, a non-partisan
research group based in Washington, D.C., that
tracks money in politics.
August 4, 2002
This week, as senators head
back to their home states for August recess,
they'll blame each other for
the failure to pass a prescription drug benefit
for the elderly this year.
Don't be fooled. While it's true that an
ideological divide -
Republicans want a private benefit, Democrats want a
government one - kept them
from reaching a compromise, another, more
powerful force was also
working against the bill: the pharmaceutical
industry.
One of the most powerful
lobbying groups on Capitol Hill, drug manufacturers
have always been a top
industry when it comes to giving campaign
contributions. During the
2000 presidential elections, when a drug benefit
for Medicare recipients was
the issue du jour, the industry gave more than
$19 million in
contributions, 77 percent to Republicans. George W. Bush was
the top recipient, taking in
nearly $300,000.
This time around, with
mid-term elections only a few months away, the
industry has stepped up its
giving, contributing $12 million so far in the
2002 election cycle, 77
percent to the GOP. That's already significantly
more than the $8.8 million
the industry gave during the last mid-term
elections in 1998, when talk
of a Medicare benefit was also being bandied
about.
The amounts are impressive,
but even more important to the industry's
success at derailing
legislation is its timing. Last June, when the House
was debating its
prescription drug plan, half a dozen drug companies helped
sponsor a record-breaking
GOP fundraiser the same week. The gala evening
netted $30 million for the
Republican party. President Bush headlined the
event and during his speech,
he singled out the chief operating officer of
GlaxoSmithKline to thank him
for the company's $250,000 soft money
contribution. The industry's
trade association, the Pharmaceutical Research
and Manufacturers of
America, also gave $250,000 that night. Pfizer gave
$100,000. Eli Lilly and
Bayer each gave $50,000.
A week later, when the House
passed a prescription drug bill, it had
everything the industry
wanted. The bill bunted the Medicare benefit to the
private sector, keeping it
out of government hands. More importantly, the
bill barred the government
from setting price controls or interfering with
the price negotiations
between drug companies and private insurers,
virtually assuring that the
cost of prescription drugs will continue to go
up, not down. How did that
happen? Because lobbyists for the pharmaceutical
industry helped the
congressmen write the bill. Then they all sat down to
dinner at the GOP
fundraiser.
Not only does the industry
know when to give, it knows whom to favor. The
industry's predilection for
favoring Republican congressional candidates has
long held it in good stead,
no matter who occupies the White House. Back in
1999, when President Bill
Clinton wanted to expand Medicare coverage, it was
the Republican-controlled
Congress that held him back.
Last week, when the
Democrats introduced their plan to add a benefit, they
couldn't garner the 10 extra
Republican votes they needed to break the
deadlock in the evenly
divided Senate. Forced to negotiate with Republicans
or go home to face their
voters empty-handed, the Democrats dramatically
scaled back the size of the
benefit to cover only the poorest Americans. But
even that wasn't enough to
entice the 10 extra senators. Even if the
Democrats had managed to
pass their bill, there was little guarantee it
would have survived the
conference committee intact. The industry-backed
House plan was more to the
liking of nearly all the Republicans and
President Bush, who has
always favored a private sector benefit.
Even so, the pharmaceutical
industry does not just stop at individual
corporate contributions. Two
years ago, during the presidential election,
the industry turned to a
time-honored tradition: the "grass-roots"
coalition, creating Citizens
for Better Medicare, a group that generated $65
million in television and
newspaper ads opposing the prescription drug
benefit. Members of the
coalition, which read like a "Who's Who" of the drug
industry (including Merck,
Bayer and Bristol-Myers Squibb), contributed $20
million to federal
candidates and parties in 1999-2000. This year, the drug
industry teamed with the
United Seniors Association, which represents 1.5
million older Americans. The
association used a special "education grant" it
got from the drug industry
to run a $3-million ad campaign in favor of the
industry-friendly bill the
House eventually passed.
On the other end of the
spectrum, the American Association of Retired
Persons, which with 35
million members arguably represents the elderly
population better than the
United Seniors Association does, released a poll
in March that showed 80
percent of Americans over age 45 support a Medicare
benefit like the one in the
Democratic plan. But AARP ran no ads. And while
the drug-industry trade
association increased spending on lobbying from $7
million in 2000 to more than
$11 million in 2001, AARP spent just $4 million
in both years. The AARP has
no political action committee and gives no
campaign money to any
candidates.
About 20 different lobbying
shops now do work for the pharmaceutical trade
association, all of them
with extensive ties to Congress. Among the recent
hires are former aides to
Sens. Chuck Hagel (R-Neb.), Robert Kerrey (D-Neb.)
and Bill Frist (R-Tenn.).
The organization even boldly hired Sonya Sotak,
Sen. John McCain's
legislative assistant for health care issues, a month
before the Senate was due to
take up McCain's bill limiting the legal
maneuvers companies can take
against the marketing of generic drugs. Sotak,
who would have worked on
drafting the generics bill, now has the job of
convincing members of
Congress not to pass it.
Of course, campaign
contributions and lobbying expenditures alone don't
determine the fate of
legislation. If they did, then there would be no new
penalties for corporate
executives who commit accounting fraud. The
accounting industry has
given $5.7 million so far in 2002, but that barely
slowed the Senate down.
Faced with an endless barrage of corporate scandals
and newspaper headlines, the
Senate unanimously passed new corporate
reforms.
So why did the accounting
industry fail to stop legislation where the
pharmaceutical industry did?
The answer is, it didn't. For a long time, the
industry warded off any
whisper of corporate reform. In 2000, when Arthur
Levitt, then chief of the
Securities and Exchange Commission, wanted to ban
accounting firms from acting
as consultants (the practice that got Arthur
Andersen and Enron in
trouble), the accounting industry responded with a
lobbying crusade that Levitt
later called "venal." The industry got 46
congressmen to deluge
Levitt's office with phone calls and letters until,
subdued, the SEC chief
finally backed down. Only this year, when the
scandals grew too big to
ignore, did Congress finally act.
None of the tactics that the
pharmaceutical industry used to stall, change
or defeat the prescription
drug bill are unusual on Capitol Hill. It's not
the only special interest
jealously guarding its profit margin. But even in
the face of overwhelming
public support for the prescription drug benefit,
the industry knows how to
win in the end.
Copyright © 2002, Newsday,
Inc.
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