Smell Of Dollars Burning On Breeze Of Pre-Election
By Cynthia Robbins-Roth
Ah, autumn! When young lobbyists' minds turn to elections. And no industry gave more to lobbyists last year than . . . wait for it . . . the "pharmaceuticals & other health products" sector!
That tidbit piqued my curiosity, and I waded into the websites that track lobbying, based on reports filed by companies and lobbying groups. The figures include all expenses, direct and indirect, that support lobbying activity - money for salaries and consultants, for example. I found that the pharma/health products sector spent at least $147 million in 2005 on lobbying, out-spending the insurance folks ($119 million), the electric utilities ($92 million), the computers and internet gang ($84 million), and the health professionals (No. 15 with a paltry $53 million).
Pharmaceutical Research & Manufacturers Association (PHRMA) alone spent $16.5 million, topped only by the U.S. Chamber of Commerce, AARP (hence the tough pushback on cross-border drug sales), General Electric, the American Medical Association and U.S. Telecom Association.
How much of that "pharma and health products" category is related to us in biotech? Well, quite a bit.
The "Top Five" big spenders for 2004 - the most recent year fully analyzed - were PHRMA ($15.5 million), Pfizer ($5.7 million), Bristol-Myers Squibb ($5.6 million), Advanced Medical Technology Association (another sector heard from with $5.3 million) and BIO ($5.1 million). Biotech companies are active individual contributors. Amgen ($3.4 million), Genentech and Genzyme ($1.7 million each), and the Millennium/Chiron/Biogen Idec triad (hovering around $1 million each) all made sure their voices were heard inside the Beltway.
The industry also lobbies at the state level. PHRMA and 14 large drug companies spent $38 million in the 2003/2004 election cycle. Even more - $83 million - was spent in California, with the largest prescription drug budget in the U.S., to fight the drug price cap proposition on the 2005 ballot.
On Campaign Trail
But wait! There's more! Our sector nudges politicians directly with campaign contributions. It coughed up $8.7 million for political action committees, and company employees provided another $5 million as of June for the current election cycle.
What we can't see any more are the soft money contributions, which were at least $19 million in 2002. Those candidate-directed funds were then outlawed, and now that cash (not reported to the federal election commission) is funneled through "527" groups like Move On or the Swift Boat Veterans, which spend the money to support issues that often benefit specific candidates. Republican candidates received about twice as much from the industry as did Democrats. The recent series of hits taken by the Republican Party has led to a frantic writing of new checks to Democrats.
House Minority Leader Nancy Pelosi already has threatened to use the first 100 hours of an anticipated "Democrat revolution" to remove most of the drug industry advantages currently in the prescription drug benefit. There's talk of lifting the ban on cross-border re-importation of drugs and investigating conflict of interest among Republicans now working for the biopharma industry.
Henry Waxman, California congressman and senior minority member of the House Government Reform Committee, is gazing thoughtfully in the direction of drug pricing for future fun.
BIO Looking Out For Biotech, Right?
BIO's CEO Jim Greenwood spent 24 years as a Republican state legislator and congressman known for moderate, bipartisan action. At BIO, he brought in folks with political savvy and ties to Congress to bolster the team and grew the in-house lobbying team from two to 11.
Greenwood said his staff is split about 50-50 on party lines: "We need good relationships and access to both parties. Some of our issues are not really partisan and need both groups to pass."
All that firepower is supporting biotech, which still defines itself as distinct from those big pharma folks, right?
Not necessarily. Twelve of the world's 20 largest pharmaceutical companies, representing $143 billion in 2005 drug sales, are BIO members and sit on the BIO board of directors. Greenwood said that 88 percent of members have annual revenues of less than $25 million, and 6 percent have more than $1 billion in annual revenues. The dues range from $1,000 to almost $600,000, based on revenue.
BIO and PHRMA have spent bucks to build links to Senate Majority Leader Bill Frist (R-Tenn.) and Speaker of the House Dennis Hastert (R-Ill.). For an interesting report on how that paid off, check out Public Citizen's report "Willful Misconduct: How Bill Frist and the Drug Lobby Covertly Bagged a Liability Shield."
The report, using internal documents and emails from BIO, showed the organization's role in drafting legislation providing an amazingly broad liability shield for companies during government-declared health emergencies. That 40-page text was inserted by Frist with Hastert's approval into the Department of Defense appropriations bill late one Sunday night, the report showed.
With Hastert in the crosshairs over the Foley page scandal and Frist not up for re-election, BIO will need to reconfigure its efforts somewhat. Greenwood and his team seem very capable of handling whatever the future brings.
To research some of this yourself, visit these sites.
Sorp.senate.gov, site of the U.S. Senate Office of Public Records, lists filed lobbying reports, searchable by client or lobbying firm (companies and trade associations can be both clients and lobbyers).
www.opensecrets.org, the website for The Center for Responsive Politics, has a database of campaign contributions searchable by broad sector or industry. It lists contributions by company or by employee (for fun, search under "donor occupation" using the name of some of our larger-cap biotech firms and see what you turn up). There are great graphics showing breakdown of donations by political party.
Be sure to check out www.publicintegrity.org, The Center for Public Integrity, for a breakdown of spending on federal lobbying. Using the database, you can see the total amount of cash thrown at politicians over time, then check out just who is doing the throwing, ranked by amount thrown.
Public Citizen's report on BIO's participation in liability shields sneaking into legislation is posted at www.citizen.org.
Robbins-Roth, Ph.D., founding partner of BioVenture Consultants, can be reached at email@example.com. Her opinions do not necessarily reflect those of BioWorld Today.
BioWorld Today November 6, 2006