Drug Bill Demonstrates Lobby's Pull

By R. Jeffrey Smith and Jeffrey H. Birnbaum
Washington Post Staff Writers
Friday, January 12, 2007

Before taking control of the House last week, Democratic leaders briefly considered proposing a new government-run prescription drug program as a way to reduce seniors' drug costs, according to Democratic aides and lawmakers involved in the deliberations.

But House Speaker Nancy Pelosi (D-Calif.) and her allies chose a far less ambitious plan -- to require the government to negotiate for lower Medicare drug prices -- that will come to a vote today. They stepped back largely out of concern that the pharmaceutical industry would stall a complex change, denying them a quick victory on a top consumer-oriented priority, aides say.

They had reason to be wary: Despite years of lopsidedly favoring GOP lawmakers with campaign cash and other benefits, the drug lobby continues to wield tremendous power in the Democratic-controlled Congress. It also still has the backing of the White House: President Bush said yesterday that he will veto the Democratic proposal if it lands on his desk.

To strengthen their position, drug firms and their trade groups have been transforming their Washington operations by hiring top Democratic lobbyists to gain access to new committee chairmen, bolstering Democratic political donations and spending millions on public relations campaigns to overcome an image, indicated in recent surveys, that the industry puts profits ahead of patients.

Even longtime industry nemeses like Rep. Fortney "Pete" Stark (D-Calif.), chairman of a House health panel, are impressed. "They're pretty potent," he said this week. "They're not bush-leaguers when it comes to spending money and lobbying."

This month alone, the Pharmaceutical Research and Manufacturers of America spent more than $1 million on full-page newspaper ads touting the success of the existing Medicare drug system.

Drug companies spent more on lobbying than any other industry between 1998 and 2005 -- $900 million, according to the nonpartisan Center for Responsive Politics. They donated a total of $89.9 million in the same period to federal candidates and party committees, nearly three-quarters of it to Republicans.

"You can hardly swing a cat by the tail in Washington without hitting a pharmaceutical lobbyist," said Sen. Charles E. Grassley (R-Iowa), a key sponsor of the 2003 legislation that created the current program.

The industry worked closely with the Republican Congress to shape the Medicare prescription drug program, which included a provision barring the government from negotiating with the pharmaceutical industry for lower prices. In the three-year run-up to passage, industry lobbyists poured more than $6 million into both Republican and Democratic campaign coffers, dispatched an army of more than 800 lobbyists to Capitol Hill and quietly funded seniors organizations and patient advocacy groups that opposed Democratic alternatives.

Democrats opposed the legislation, but now that they have a chance to rewrite the law, they are pressing for what party leaders concede is only a minor alteration. "This is a first step," said Rep. Charles B. Rangel (D-N.Y.), chairman of the House Ways and Means Committee.

The House proposal would require the government to negotiate with the pharmaceutical industry for lower prices on behalf of the private insurers that run the drug benefit program. The impact on prices could be small, however, since the government does not buy drugs directly for Medicare and manufacturers could ignore federal pressure to lower prices without consequence.

The Bush administration has long opposed the idea of direct government negotiation with drug companies for Medicare, asserting that it would impede competition among the private drug plans. Mike Leavitt, the secretary of health and human services, has said he does not want to implement such a measure.

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