Pocketbook Politics:

[Guest Bonnie]

Bad Medicine

The makers of brand-name pharmaceuticals have long relied on the same prescription to protect the profits of their ๪-billion drug industry - large doses of political contributions. Since 1991, the companies that belong to the Pharmaceutical Research and Manufacturers of America (PhRMA), the trade group for brand-name drugmakers, have given ย.6 million in political contributions, including Ű.4 million in soft money donations to the political parties.

With the help of that influence, brand-name drug companies have kept their bottom lines healthy by successfully convincing Congress to let them hold on to their drug patents longer. Brand-name drug companies lose profits when the patents on their most popular drugs expire, permitting generic drug companies to manufacture much cheaper versions of the same medicines, without having to repeat the clinical studies used to develop the brand-name drugs. The loss of patents can mean billions of dollars to the major drug companies, leading them to fight fiercely to hold on to those patents for as long as possible.

"There should be no mistake that the whole thing is about cash," Princeton University Healthcare Economist Uwe Reinhardt told Newhouse News Service. "If I worked for one of these [brand-name] companies, I'd do whatever I could to block a product that took cash away from me. That's the name of the game."

Restricting access to generic drugs has cost consumers as much as 軆 million a year. Much of these costs have been borne by senior citizens. People over age 65 accounted for more than one-third of all the spending on drugs in 1991, and older Americans were much less likely to have insurance coverage for medication, according to the health care advocacy group Families USA. Being denied access to a generic version of just one brand-name drug, the ulcer medication Zantac, could ultimately cost a senior consumer more than 迲.

That cost can be traced to a loophole that benefits brand-name drug companies that was unintentionally created in 1994 when Congress passed legislation implementing the latest round of the General Agreement on Tariffs and Trade (GATT).

The GATT changed the rules on patents, and as a result, many companies were permitted to keep their patents for an extra year or two. This change hurt competitors preparing to market generic versions of these patented products. Therefore Congress included a provision in the trade agreement that said that competitors that had made substantial investments in bringing generic versions of brand-name drugs to market could move forward with their plans, provided they gave adequate compensation to the patent holder. This GATT provision, however, was in direct conflict with the 1984 Hatch-Waxman Act, which forbids the Food and Drug Administration (FDA) from approving generic versions of any brand-name drug before its patent expires.

As a result of these conflicting provisions, brand-name drug companies were insulated from competition from generics for an additional period of up to two years.

 

Pharmaceutical Research

& Manufacturers of America

PAC & Soft Money Contributions

1/1/91- 6/30/97

PAC Money to Candidates บ,178,913

Soft Money to National Parties Ű,384,921

Total PAC & Soft Money ย,563,834

In the 104th Congress, consumer groups and the generic drug industry asked Congress to eliminate this windfall created in the aftermath of the GATT, but they were unsuccessful. This victory for brand-name drug companies and their trade group, PhRMA, delayed the introduction of generic versions of more than 100 prescription drugs, including Glaxo Wellcome's Zantac (ulcer), Merck's Mevacor (cholesterol), and Bristol-Meyer Squibb's Capoten (heart).

Over the next 17 years, as the GATT patent extension plays out, the consumer may ultimately pay an estimated Ů.2 billion in higher drug prices, according to a study on GATT's impact by the Prime Institute at the University of Minnesota. This study was funded by a grant from the generic drug industry. Prime director Stephen Schondelmeyer put GATT's 1997 cost to consumers at about 軆 million.

Consumer wallets were getting thinner as brand-name company bottom lines were getting fatter. For example, Glaxo Wellcome was able to hold on to the patent for Zantac, which was originally slated to expire in the beginning of December 1995, for an additional 19 months. That extension gave the company a ũ-billion windfall, Schondelmeyer estimated.

But Glaxo's victory cost the consumer dearly.

In 1996, for example, a two-month supply of Zantac cost about 赔. A generic version would have cost about half that price, or ๪, according to Schondelmeyer. The 19-month extension Glaxo received for Zantac could have cost a consumer who pays for prescription drugs about 迷.

Glaxo has given more than Ū million in political contributions since 1991, including more than 逌,000 in soft money donations to both major political parties.

At the time that Glaxo was lobbying hard on GATT, it was increasing its political giving. The company gave its first 贄,000 soft money contribution to the Republican party on June 28, 1996, the day after it won a key Senate vote.

Congress' failure to eliminate the unintended windfall created by the GATT "proves that a majority of Senators choose to side with major campaign contributors such as the giant pharmaceutical companies, and not consumers, taxpayers and senior citizens," said James P. Firman, president of the National Council on the Aging and chairman of the Generic Drug Industry Coalition.

Senior citizens, who are major users of prescription drugs, were so riled by Glaxo's lobbying campaign that the Grey Panthers awarded Glaxo its first annual "Green and Greedy" or GAG award.

There have been other attempts by drug companies to extend the life of their patents. In 1996, for example, G.D. Searle & Co., who with its parent company, Monsanto, has given more than 輊,000 in political contributions since 1991, convinced Congress to extend the patent on its arthritis drug, Daypro. This drug is one of the company's most popular products and brought in more than 趸 million in sales in 1996. Searle argued that it was entitled to the extra time because of FDA delays in approving the drug. The extension, which is worth millions of dollars to Searle, was quietly dropped into the 1996 omnibus budget bill, with the help of Representative John Porter (R-IL), who represents many Searle employees.

 

Pharmaceutical Research

& Manufacturers of America

Top PAC & Soft Money Donors

1/1/91- 6/30/97

Donor Democrats Republicans Total

Glaxo Wellcome Inc 軉,403 ũ,519,992 Ū,073,395

Pfizer Inc 486,580 1,322,599 1,809,179

Eli Lilly & Co 394,300 1,027,061 1,421,361

Novartis Pharmaceuticals Corp 346,200 1,013,513 1,359,713

Bristol-Myers Squibb Co 313,425 846,235 1,159,660

Schering-Plough Corp 210,650 864,335 1,074,985

Hoffman-La Roche Inc 446,980 537,702 984,682

Hoechst Marion Roussel AG 340,100 570,998 911,098

Zeneca Pharmaceuticals Group 351,632 540,783 892,415

Merck & Co 258,686 451,026 709,712

Rhone-Poulenc 213,650 487,225 700,875

Note: Totals may include donations from executives and/or subsidiaries.

:wavey:

 

[Guest Bonnie]

When I read this article one paragraph jumped out at me, it was the following:

There have been other attempts by drug companies to extend the life of their patents. In 1996, for example, G.D. Searle & Co., who with its parent company, Monsanto, has given more than 輊,000 in political contributions since 1991, convinced Congress to extend the patent on its arthritis drug, Daypro. This drug is one of the company's most popular products and brought in more than 趸 million in sales in 1996. Searle argued that it was entitled to the extra time because of FDA delays in approving the drug. The extension, which is worth millions of dollars to Searle, was quietly dropped into the 1996 omnibus budget bill, with the help of Representative John Porter (R-IL), who represents many Searle employees.

The reason it did is because G.D. Searle & Co. is the drug company, it is a subsit of Monsanto.  Monsanto make aspartame & it sell the biotech soy seeds & other biotech seeds. So here we see a company that owns the food chain, the beverage chain & the pharm chain.  What's wrong with this picture?

:wavey: