[Pharm-policy] Public Citizen's press release on the pharmacy industry

[Dean Hughson]

July 23, 2001

New Report Debunks Drug Industry Claims About the Cost
of New Drug 
Research and Development

Second Report Documents Industry's Intense Lobby and
Political 
Contribution Campaign to Keep Prices and Profits High

WASHINGTON, D.C. - The pharmaceutical industry spends
about one-fifth 
of what it says it spends on the research and
development (R&D) of new 
drugs, destroying the chief argument it uses against
making prescription 
drugs affordable to middle and low-income seniors, a
Public Citizen 
investigation has found.

	The findings are contained in a Public Citizen
report, Rx R&D Myths: 
The Case Against the Drug Industry's R&D Scare Card.

The report reveals how major U.S. drug companies and
their Washington 
lobby group, the Pharmaceutical Research and
Manufacturers of America 
(PhRMA), have carried out a misleading campaign to
scare policymakers and 
the public. PhRMA's central claim is that the industry
needs 
extraordinary profits to fund "risky" and innovative
research and development to 
discover new drugs. In fact, taxpayers are footing a
significant 
portion of the R&D bill, which is much lower than the
companies claim.

"This R&D scare card is built on myths and falsehoods
that are 
maintained by the drug industry to block Medicare drug
coverage and measures 
that would rein in skyrocketing drug costs," said
Frank Clemente, 
director of Public Citizen's Congress Watch. 

Public Citizen based the study on an extensive review
of government and 
industry data and a report obtained through the
Freedom of Information 
Act from the National Institutes of Health (NIH).
Among the report's 
key findings: 

§ The actual after-tax cash outlay - what drug
companies really spend 
on R&D for each new drug (including failures) - is
approximately $110 
million (in year 2000 dollars.) This is in marked
contrast with the $500 
million figure PhRMA frequently touts.

§ The NIH document shows how crucial taxpayer-funded
research is to the 
development of top-selling drugs. According to the
NIH, U.S. 
taxpayer-funded scientists conducted at least 55
percent of the research projects 
that led to the discovery and development of the five
top-selling drugs 
in 1995.

§ Public Citizen found that, at most, about 22 percent
of the new drugs 
brought to market in the past two decades were
innovative drugs that 
represented important therapeutic advances. Most new
drugs were "me-too" 
or copycat drugs that have little or no therapeutic
gain over existing 
drugs, undercutting the industry's claim that R&D
expenses are used to 
discover new treatments for serious and
life-threatening illnesses.

A second report issued today by Public Citizen, The
Other Drug War: Big 
Pharma's 625 Washington Lobbyists, examines how the
U.S. drug industry 
spent an unprecedented $262 million on political
influence in the 
1999-2000 election cycle. That includes $177 million
on lobbying,  $65 
million on issue ads and $20 million on campaign
contributions.  The report 
shows that: 

· The drug industry hired 625 different lobbyists last
year - or more 
than one lobbyist for every member of Congress - to
coax, cajole and 
coerce lawmakers.  The one-year bill for this team of
lobbyists was $92.3 
million, a $7.2 million increase over what the
industry spent for 
lobbyists in 1999. 

· Drug companies took advantage of the revolving door
between Congress, 
the executive branch and the industry itself. Of the
625 lobbyists 
employed in 2000, more than half were either former
members of Congress 
(21) or worked in Congress or other federal agencies
(295). 

· The industry's $20 million in campaign contributions
and millions 
more in issue ads attacking candidates opposed by the
industry aided its 
army of lobbyists in gaining access to congressional
representatives.

"The drug industry is stealing from us twice,"
Clemente said. "First it 
claims that it needs huge profits to develop new
drugs, even while drug 
companies get hefty taxpayer subsidies. Second, the
companies gouge 
taxpayers while spending millions from their profits
to buy access to 
lawmakers and defeat pro-consumer prescription drug
legislation."

Rep. Pete Stark (D-Calif.), the ranking Democrat on
the House Ways and 
Means Health Subcommittee, added, "Not surprisingly,
pharmaceutical 
companies have been deceiving Congress and the
American public for years. 
I commend Public Citizen for exposing the industry's
long-standing 
attempt to hide the truth about R&D spending."

Sen. Paul Wellstone (D-Minn.), said, "This
well-documented Public 
Citizen report shows just how much the pharmaceutical
industry exaggerates 
its commitment to research and development and focuses
instead on the 
bottom line."

Added Rep. Tom Allen (D-Maine), "Millions of our
seniors have paid 
taxes for decades and contributed to the development
of new drugs. Now in 
their retirement, they pay the highest prices in the
world for these 
drugs. . . . The public deserves better."

Public Citizen calls on Congress to pass a
Medicare-run prescription 
drug benefit program with strong cost containment that
guarantees 
affordable prices for middle and low-income seniors.
Copies of the reports can 
be found at
http://www.citizen.org/congress/drugs/R&Dscarecard.html
 
and
http://www.citizen.org/congress/drugs/pharmadrugwar.html
###
Public Citizen is a nonprofit consumer advocacy
organization based in 
Washington, D.C. For more information, visit
www.citizen.org 
###


__________________________________________________
Do You Yahoo!?
Make international calls for as low as $.04/minute with Yahoo! Messenger
http://phonecard.yahoo.com/