Center for Public Integrity

Center for Public Integrity

Do you want to learn about how the drug industry gets its way in Washington D.C. and how it sells its agenda at your expense? Do you want to learn how the Food and Drug Administration (FDA) lacks the power to regulate pharmaceuticals and keep you safe? Or how the industry increasingly uses non-profits and educational institutions to promote its own interests? If you answered ‘yes’ to any of these questions, visit the Center for Public Integrity’s website at www.publicintegrity.org.

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The Center is a nonprofit, nonpartisan organization that conducts investigative research and reporting on public policy issues in the United States and around the world. In July of last year, it released a series of reports on the pharmaceutical industry that provides a detailed investigation of the questions stated above. As the pharmaceutical industry has been both a major player and victor in the creation and passage of the 2003 Medicare Modernization Act and the resulting Medicare Part D prescription drug benefit, it is important for both beneficiaries and advocates to more thoroughly understand how the industry uses its power to get what it wants, often at the expense of the public. All papers are available under the “Pharmaceuticals” featured project heading and are offered as a way to inspire a better-informed citizenry to demand a higher level of accountability from our government and elected leaders.

Some of the highlights covered in the articles include:

  • The pharmaceutical and health products industry have spent more than $800 million in federal lobbying and campaign donations at the federal and state levels in the past seven years. No other industry has spent more money to sway public policy in that period.
  • During these seven years, most of the industry’s political spending paid for federal lobbying. Pharmaceutical companies hired about 3,000 lobbyists, more than a third of them former federal officials, to advance their interests before the House, the Senate, the FDA, the Department of Health and Human Services, and the Centers for Medicare and Medicaid Services (CMS), among others.
  • In 2003 alone, the industry spent nearly $116 million lobbying the government. That was the year that Congress passed, and President George W. Bush signed, the Medicare Modernization Act of 2003, which created Medicare Part D. Due in large part to the industry’s lobbying power, a provision in the law bars government programs like Medicare from negotiating with drug companies for lower prices.

The Center also created a timeline, ‘What the Industry Got,’ that outlines what the industry has reaped from the past 25 years of political investments. With the Medicare Modernization Act being a major victory in 2003, other victories include laws and policies that: create corporate tax incentives and tax credits for research; establish intellectual property rights and the elimination of regulatory practices (such as price controls) in international trade agreements; strengthen patent rights; and promote public university and industry partnerships, allowing the pharmaceutical companies to tap into tax-payer subsided research.

Several successes also involve the FDA, such as the FDA Modernization Act of 1997. This law not only lowers the standards for approving new drugs, but also allows medical device makers to hire for-profit companies to review products and promote them to the FDA. In the same year, the FDA also eased restrictions on direct-to-consumer advertising for prescription drugs, allowing ads to refer consumers elsewhere to find risk information instead of including it in the ads themselves. A study conducted by researchers at Harvard University and the Massachusetts Institute of Technology found that for every dollar spent on direct-to-consumer advertising, drug sales increased by $4.20. In 2000, that translated to an additional $2.6 billion in pharmaceutical sales. These changes in FDA policies highlight the fact that this agency has ultimately come to lack the power needed to regulate the drug industry. See the Center’s article, ‘FDA: A Shell of Its Former Self,’ for more information.

The Center’s article, ‘Surrogates for Their Agenda,’ uncovers the industry’s increasing use of non-profits to promote their own interests. While some non-profits take the needed funds to continue with their work, others are used more as ‘puppets’ designed to support positions favorable to the pharmaceutical industry that pays their bills. The industry also launches ‘grassroots’ organizations in an effort to promote specific interests. One example is the Citizens for Better Medicare. This group claimed to be a grassroots organization consisting of numerous organizations and more than 300,000 individual members, yet it mysteriously went out of business shortly after the legislative battle it was created to influence had come to an end. The broad-based group reportedly spent more than $60 million of the Pharmaceutical Research and Manufacturers of America’s (PhRMA) money on television and newspaper ads promoting the passage of the Medicare prescription drug benefit in 2003.

The culmination of a year-long investigation into the drug industry, all articles in this ‘Pharmaceutical’ project provide important information on one of the most powerful and influential industry groups in the country. Uncovering and understanding the role they play in shaping laws and policies that affect the health of all Americans, particularly the Medicare population, is an essential step in demanding accountability, reform, and affordable access to medications that support life. For further reading and information, please visit the Center for Public Integrity’s website at www.publicintegrity.org.

Karen Fletcher
Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.