[Ip-health] Drug Industry and HMOs Deployed an Army of Nearly 1,000 Lobbyists to Push Medicare Bill, Report Finds

[James Love]

-------- Original Message --------
Subject: New Report on Drug Industry/HMO Lobbying
Date: Wed, 23 Jun 2004 16:18:13 -0400
From: Cristina Francisco <cfrancisco@citizen.org>

For Immediate Release:	Contact: Frank Clemente (202) 441-9818
June 23, 2004
                             Craig Aaron (202) 454-5167

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."

A copy of Public Citizen's The Medicare Drug War is available at:
http://www.citizen.org/congress/reform/rx_benefits/drug_benefit/articles.cfm?ID=11852.

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Public Citizen is a nonprofit consumer advocacy organization based in
Washington, D.C. For more information, please visit www.citizen.org.