Big Pharma Reading Political Tea Leaves and Increasingly, Sees Democrats

With the Iowa Caucuses a mere few days away, and the New Hampshire primaries to follow shortly thereafter, I thought it might be interesting to see what the U.S. pharmaceutical industry thinks about the 2008 election. The real question is whether it even matters? I cannot answer that question today, but I can provide some perspective on what the American drug industry is thinking.

The pharmaceutical and health-products industry has spent more on lobbying Washington –- $1.1 billion -– since 1998 than any other industry, according to the Center for Responsive Politics, which analyzes lobbying disclosure reports. Over two-thirds of the more than $90 million the drug industry has contributed to Congress since 1994 went to Republicans, according to the Center for Responsive Politics. Critics of the pharmaceutical industry argue that heavy spending on lobbyists and campaign contributions is a big reason drug companies have gotten much of what they've sought in Congress and from the President in recent years. Consider the Medicare Drug Benefit as an obvious example of corporate welfare at the taxpayers' expense.

Although it's unclear what pharmaceuticals have to do with protecting the U.S. from terrorist attacks, it did not stop President Bush from naming Eli Lilly and Company's (soon to be former) CEO Sidney Taurel as one of his Homeland Security Advisory Council members, and more recently, Bush appointed him to the senior trade advisory panel. Lilly's ties to the Bush family are well-documented. But Lilly's Red State Republican support extends well beyond the Bush family.

According to USA Today, since at least 1980, the Indianapolis-based insulin manufacturer has given at least 65% of its PAC contributions to Republicans, according to PoliticalMoneyLine, a non-partisan company that tracks campaign contributions. Lilly is a major donor, giving more than $50,000 in contributions during the 2006 election cycle, the fourth highest among corporate health care PACs, again, according to PoliticalMoneyLine.

But as The Wall Street Journal recently reported, for a variety of reasons, it's beginning to look like the "GOP Is Losing Grip On Core Business Vote", and that apparently includes Big Pharma as well. In spite of huge benefits the Republican party has handed to the pharmaceutical industry (like the provisions of the Medicare drug bill that prevent the agency from seeking competitive bids or the refusal to allow drugs to be re-imported from Canada), that did not help Republicans in the 2006 election, when voters switched Congressional majorities from Republican to Democrat.

These days, it's starting to look like Big Pharma is what could best be described as a "fair weather friend" to the Republican party. Using Lilly as an example, during the first four months of 2007, the company gave slightly more money to congressional Democrats ($29,500) than to Republicans ($28,500). One could make an argument that Lilly was merely reading the political tea leaves and shifted its corporate lobbying strategy to reflect that. But Lilly is hardly alone among big drug companies. ALL told, according to The Center for Responsive Politics, pharmaceutical manufacturers have given $154,710 to Obama, $140,544 to Clinton, $103,825 to Mitt Romney, $91,550 to Rudy Giuliani, and $68,200 to Chris Dodd. By comparison, Republican John McCain received $39,797.

Dr. Peter Rost, formerly of the blog BrandWeekNRx reported that Pfizer CEO Jeff Kindler apparently supports Hillary Clinton for president in 2008. Dr. Rost says "This is an abrupt departure from the path taken by Kindler's predecessor, Hank McKinnell, who was a Bush ranger and right-wing Republican." Rost speculated that since Kindler is a lawyer, and the trial bar often supports Democrats, his position may not be all that surprising – if it wasn't for the fact that he is now CEO of Pfizer and used to work for McKinnell and did McKinnell's bidding to get Pfizer employees to vote for Bush. Rost comments that if the big drug companies are now supporting Hillary Clinton, she sure has come a long way since she tried to implement healthcare reform, and that's good news for Mrs. Clinton's Presidential campaign.

This may be a victory for Mrs. Clinton, but is it a victory for the American voter? Clinton is decidedly centrist, which, according to some political analysts (like her husband) is what's needed if she is to win some of the red states she needs to win the Presidency. To be sure, while that annoys the heck out some leftists within the Democratic party, if she wins the primary, they may have to support her in the absence of having any other alternative. Another negative is that she talks ad nauseam about her learning from the 1993 Health Care debacle, and that has made her unwilling to rock the establishment too much. But then again, in her proposed healthcare plan, she is one of the only candidates to state something about not allowing insurance companies to "cherry pick" and with her plan, Mrs. Clinton notes that people with pre-existing conditions would be offered insurance on a par with others, "prohibiting insurance companies from carving out benefits or charging higher rates to people with health problems." Many people with diabetes should be looking for a health plan that does this.

Also, in February 2007, Senator Clinton along with Senator Charles Schumer (D-NY) and Representative Henry Waxman (D-CA) introduced legislation which I firmly support and hope will be voted on and signed into early next year. That bill (S. 623/H.R. 1038, the "Access to Life-Saving Medicine Act of 2007") would give the FDA the legal authority to approve cheaper, generic versions of biotech drugs known as biologics or follow-on protein products, something the FDA has refused to address unless they did so under court orders.

As my article on this subject noted, insulin has been caught up in the FDA's refusal to outline procedures for generics manufacturers to get approvals, and this bill would help open the doors to more competition in the insulin market, which is arguably a cartel that is more similar to the U.S. auto industry in the late 1970's than it is the U.S. long-distance telecommunications industry in the 1990's. Today's insulin market has little product innovation, a lot of price gouging, mediocre quality and marketing arrogance, and the executives from the three major manufacturers do not hide their intention to eliminate all forms of human insulin from the market, leaving us with only costly insulin analogs with questionable long-term safety results. This is obviously meant to benefit shareholders, but isn't necessarily in the best interest of patients.

Representative Waxman, a California Democrat who is now chairman of the House Oversight and Government Reform Committee, introduced similar legislation in 2006, but his bill was never voted on. The new bill, if approved and signed into law, would change U.S. patent laws under the 1946 Public Health Services Act that now prevents the FDA from approving some generic versions of biotech drugs and require the FDA to outline procedures to get these medicines approved. The bill would give the FDA the express legal authority to approve generic biotech drugs, and in many cases, remove the need for expensive and time-consuming repetition of clinical trials. The FDA would also be given the authority to decide on a case-by-case basis what additional clinical information is required before approval will be granted. Also, in an effort to avoid the various legal loopholes that now delays FDA approval of many generic chemical drugs, this legislation also calls for timely resolution of patent disputes. As several bloggers have noted, a vote on this bill was delayed due to lobbying, but since the bill seems to enjoy widespread bipartisan support, it seems almost certain to emerge in the 2008 legislative session.

To be sure, not all of Big Pharma and the Diabusiness Industry is supporting Clinton or the Democrats. For example, glucose test strip manufacturer (among their many products) Abbott Laboratories' CEO Miles White donated $15,000 to the Republican Party of Illinois (where Abbott is headquartered), $5,000 to the National Republican Congressional Committee, and smaller donations to Senator Ted Stevens (R-AK), Congressman Mark Kirk (R-IL) and Republican presidential candidate Mitt Romney. Others either haven't yet supported anyone, or the company does not officially support political candidates.

But it does look as if the fair-weather Republican friends in Big Pharma are dwindling in numbers as the political tides turn. 2008's election should be interesting to say the very least, especially considering the dramatic changes we're witnessing in primary dates being changed, but the real question we should be asking is just how significant are the differences between each of the candidates -- and that includes differences across party lines? Many people see few substantial differences between the candidates from the two major parties. But don't let that stop you from exercising your right to vote and let your voice be heard in the elections!