Life Sciences Lobby

STACY LAWRENCE

Prescription drug prices, medical malpractice, and genetically modified agricultural products are likely to continue haunting congressional and presidential agendas over the coming years, along with a number of other politically perilous health-related issues. It�s also likely that life sciences companies and associations will get even more skillful at injecting their perspective into politician proposals and public debate. Through ever-expanding political campaign donations and lobbying efforts, life sciences companies are now among the most powerful interests in Washington.

As late as the mid-�90s, congressional and presidential campaign donations from, and lobbying by, health care organizations were dominated by professional associations like the American Medical Association and the American Hospital Association. And when it came to lobbying spending, the largest pharmaceutical companies and health insurers, such as Pfizer, Merck, Eli Lilly, and Blue Cross/Blue Shield, were also big spenders. These firms, along with industry associations like Pharmaceutical Research and Manufacturers of America (PhRMA) and the Biotechnology Industry Organization (BIO), have rapidly expanded their political spending in recent years.

Since late 1999, health care lobbying spending has consistently surpassed that of any other industry. In 2002, that amounted to expenditures of $264 million, according to Federal Election Commission data assembled by the independent campaign finance monitor PoliticalMoneyLine. Its rivals for this distinction, the financial and technology industries, spent around $220 million each in the same year. With such a substantial investment, the health care industry as a whole accounted for 15% of the $1.8 billion in lobbying spending for 2002.

When it comes to congressional and presidential political donations, health care barely makes the top ten industries. With $94 million given in the 2002 election cycle, health care political donations were almost on a par with those from organized labor, according to data from the nonpartisan research group Center for Responsive Politics. But both were eclipsed by the financial industry, the top giver, which offered $231 million.

Even as overall life sciences political donations and lobbying have escalated, the face of industry political spending has changed, with a shift from professional associations toward pharmaceutical corporations and industry associations. In the 1992 election cycle, all the top ten health-related sources for political donations were industry associations and nonprofits. The AMA topped this list at $3.4 million, more than twice as much as any other group. By the 2002 election cycle, six of the top ten sources for political donations were major pharmaceutical companies and professional associations. Heading the list was PhRMA with $3.5 million, followed by the AMA at $2.7 million.

Almost uniformly, health care interests have gotten their way on numerous proposals in the past year. Most important, the Medicare drug benefit passed by the House and Senate vitiates the ability of the program to negotiate prescription discounts on behalf of its 40 million beneficiaries. Instead, Medicare prescription drug benefits will be administered by private health plans, a key element for pharmaceutical companies wary of introducing drug price controls in the United States.

On drug reimportation, the pharmaceutical industry is waging a heated battle. “We�re fighting it tooth and nail,” Jeffrey Trewhitt, a PhRMA spokesperson, told the New York Times. Still, there were some early signs that the pharmaceutical industry might not get what it wants. The Senate originally approved its version of the Medicare prescription plan with an amendment allowing for drug importation from Canada.

When the House overwhelmingly approved a broader bill allowing for reimportation, the pharmaceutical industry rallied to protect its lucrative U.S. market. Promptly, a statement signed by 53 senators asserted that they would not support drug reimportation under any circumstances, and President George W. Bush publicly opposes reimportation.

  (Subject to Terms and Conditions)

Additional charts accompanying text include:

Top Health Care Political Campaign Contributors

Political Campaign Donations By Health Care Interests

Percentage of Health Care Campaign Donations Going to Republicans

Top Recipients of Health Political Donations In Congress

Metrics

» BioMetrics: Health care industry dollars: who�s givin� money to the man?

Pipeline: Measuring spending on pharmaceutical marketing

Capital Markets: Unlocking the IPO window?

BioIndex: The best- and worst-performing equities.