[Ip-health] Washington Post: Drug Bill Demonstrates Lobby's Pull Democrats Feared Industry Would Stall Bigger Changes

[Thiru Balasubramaniam]

Drug Bill Demonstrates Lobby's Pull
Democrats Feared Industry Would Stall Bigger Changes

By R. Jeffrey Smith and Jeffrey H. Birnbaum
Washington Post Staff Writers
Friday, January 12, 2007; A01

Before taking control of the House last week, Democratic leaders
briefly considered proposing a new government-run prescription drug
program as a way to reduce seniors' drug costs, according to Democratic
aides and lawmakers involved in the deliberations.

But House Speaker Nancy Pelosi (D-Calif.) and her allies chose a far
less ambitious plan -- to require the government to negotiate for lower
Medicare drug prices -- that will come to a vote today. They stepped
back largely out of concern that the pharmaceutical industry would
stall a complex change, denying them a quick victory on a top
consumer-oriented priority, aides say.

They had reason to be wary: Despite years of lopsidedly favoring GOP
lawmakers with campaign cash and other benefits, the drug lobby
continues to wield tremendous power in the Democratic-controlled
Congress. It also still has the backing of the White House: President
Bush said yesterday that he will veto the Democratic proposal if it
lands on his desk.

To strengthen their position, drug firms and their trade groups have
been transforming their Washington operations by hiring top Democratic
lobbyists to gain access to new committee chairmen, bolstering
Democratic political donations and spending millions on public
relations campaigns to overcome an image, indicated in recent surveys,
that the industry puts profits ahead of patients.

Even longtime industry nemeses like Rep. Fortney "Pete" Stark
(D-Calif.), chairman of a House health panel, are impressed. "They're
pretty potent," he said this week. "They're not bush-leaguers when it
comes to spending money and lobbying."

This month alone, the Pharmaceutical Research and Manufacturers of
America spent more than $1 million on full-page newspaper ads touting
the success of the existing Medicare drug system.

Drug companies spent more on lobbying than any other industry between
1998 and 2005 -- $900 million, according to the nonpartisan Center for
Responsive Politics. They donated a total of $89.9 million in the same
period to federal candidates and party committees, nearly
three-quarters of it to Republicans.

"You can hardly swing a cat by the tail in Washington without hitting a
pharmaceutical lobbyist," said Sen. Charles E. Grassley (R-Iowa), a key
sponsor of the 2003 legislation that created the current program.

The industry worked closely with the Republican Congress to shape the
Medicare prescription drug program, which included a provision barring
the government from negotiating with the pharmaceutical industry for
lower prices. In the three-year run-up to passage, industry lobbyists
poured more than $6 million into both Republican and Democratic
campaign coffers, dispatched an army of more than 800 lobbyists to
Capitol Hill and quietly funded seniors organizations and patient
advocacy groups that opposed Democratic alternatives.

Democrats opposed the legislation, but now that they have a chance to
rewrite the law, they are pressing for what party leaders concede is
only a minor alteration. "This is a first step," said Rep. Charles B.
Rangel (D-N.Y.), chairman of the House Ways and Means Committee.

The House proposal would require the government to negotiate with the
pharmaceutical industry for lower prices on behalf of the private
insurers that run the drug benefit program. The impact on prices could
be small, however, since the government does not buy drugs directly for
Medicare and manufacturers could ignore federal pressure to lower
prices without consequence.

The Bush administration has long opposed the idea of direct government
negotiation with drug companies for Medicare, asserting that it would
impede competition among the private drug plans. Mike Leavitt, the
secretary of health and human services, has said he does not want to
implement such a measure.

The bill leaves intact three provisions of the 2003 law that industry
analysts agree played a more direct role in boosting pharmaceutical
profits. These include a controversial ban on the importation of
cheaper medicines from Canada, a provision that forces roughly 7
million Medicaid patients to buy drugs that are not subject to price
limitations, and provisions requiring private insurance plans to remain
small and numerous, which dilutes their leverage in price negotiations
with drugmakers.

Rep. Marion Berry (D-Ark.), a registered pharmacist, lined up more than
170 House Democrats last year to support a Medicare-run drug plan meant
to force sharply lower prices, and he said the House leadership
considered seeking it now but set it aside. "It was primarily a
judgment call from the speaker, to keep everybody on board," Berry
said. Pelosi aides confirmed the account.

The drug industry lobbying effort started to tilt Democratic as soon as
it was clear that Democrats were headed for victory in the midterm
elections. The industry is working "to expand areas of contact, develop
relationships with those who are in charge," said former senator John
Breaux (D-La.), a lobbyist for the industry.

The political action committee of the drug company Amgen gave Rep. John
Conyers Jr. (D-Mich.), the new chairman of the House Judiciary
Committee, $8,500 during the 2006 election cycle, amounting to
three-quarters of all its donations to him over the past decade. In the
Senate, GlaxoSmithKline's PAC contributed $8,000 during the cycle to
Sen. Kent Conrad (D-N.D.), the new Budget Committee chairman. That is
more than the $6,000 total that the PAC had given to Conrad since 1997.

Helping lead the industry's charge is Breaux, the former senator, who
is one of only two Democrats who played a role in drafting the 2003
bill. He said he plans to hopscotch the country holding public seminars
on solving health-care problems, often in the states and districts of
members of Congress who are pivotal to drug legislation. It is part of
a program, called Ceasefire on Health Care, that is bankrolled by the
drug company Pfizer and has featured speakers such as Sen. Blanche
Lincoln (D-Ark.) and Sen. Gordon Smith (R-Ore.), who both sit on the
Finance Committee.

"We need to get access to key Democrats now," said former
representative James C. Greenwood (R-Pa.), president of the
Biotechnology Industry Organization, a prominent industry group.

In an effort to bolster its image, Pharmaceutical Research and
Manufacturers of America is also sponsoring a program that distributes
low- and no-cost drugs to poor people, called the Partnership for
Prescription Assistance. A few of the program's beneficiaries have been
brought to Washington and given media training so they can promote the
program in local news outlets and in television ads.

While the association has told House members that it has "issues" with
today's measure, most of its focus will be on the Senate, where
lobbyists say they have a better chance of blocking the bill. Democrats
control that chamber, 51 to 49, and 60 votes are needed to pass such
controversial bills.

Even if the House bill passes both chambers of Congress, supporters
take seriously the veto threat by Bush, who got $1.17 million from the
industry for his 2004 reelection campaign.

Staff writer Christopher Lee, research database editor Derek Willis and
staff researcher Richard S. Drezen contributed to this report.

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Thiru Balasubramaniam
Geneva Representative
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