Drug Companies’ Backing of Campaigns Aimed at Defeating Medicaid Drug Formularies Criticized

The pharmaceutical industry is "under fire" for funding a number of marketing campaigns in several states that "cultivate a grass-roots image while lobbying for drug makers," the AP/Los Angeles Times reports. Drug companies have contributed to the campaigns to defeat legislation that would establish prescription drug formularies in state Medicaid programs (Agovino, AP/Los Angeles Times, 3/30). The pharmaceutical industry has spent about $520,000 on campaigns in eight states over the past several weeks to "derail" such legislation. According to some consumer advocates and public officials, the campaigns represent "an effort to hide the drug makers' involvement and win support from people who would reject them." For example, the pharmaceutical industry has contributed to Consumer Alliance, an "obscure" group based in Lansing, Mich., that has lobbied against drug formulary legislation in a number of states. Bonner & Associates, a Washington, D.C., lobbying firm hired by the pharmaceutical industry that has in the past developed "corporate grassroots" campaigns, provided Consumer Alliance with $16,000. Don Rounds, president of Consumer Alliance and the group's only employee, said that the group, which has no office or phone number and a budget of less than $50,000, "has always been forthcoming about industry funding." He added, "I'm not an arm of the industry. We are just working on the same issue." However, the Rev. Timothy McDonald, president of the Concerned Black Clergy of Atlanta, which also opposes drug formularies, said that the group's ties with the drug industry do "beg questions of the group's integrity."

'Telemarketing Blitzes'
In addition to Consumer Alliance, the pharmaceutical industry has funded "telemarketing blitzes" in North Carolina and Minnesota urging voters to inform state health departments and lawmakers about their opposition to Medicaid drug formularies. Adam Searing, project director of the North Carolina Health Access Coalition, said of the North Carolina campaign, "I've never seen anything so sophisticated and done so deceitfully." In the Minnesota campaign, telemarketers identified themselves as representatives of the 60-Plus Association, an advocacy group for seniors based in Virginia. Officials at the 60-Plus Association said that Bonner & Associates organized the campaign, and the Associated Press reports that Pfizer Inc. donated the company's lobbying services. However, 60-Plus Association President Jim Martin "denies anyone was misled." Representatives of the drug industry said that they "intended no deceit" with the campaigns and "pledged to be forthright in lobbying against formularies." Jeff Trewhitt, a spokesperson for the Pharmaceutical Research and Manufacturers of America, said, "We'll have to be more up front about our conducting an educational campaign" (Agovino, Associated Press, 3/30).

Rx Drug Costs Emerge as Election Issue
Meanwhile, the New York Times reports that the "soaring cost" of prescription drugs has "emerged as a potent domestic political issue" at the national and state levels. The debate over drug costs -- which in the past "revolved around older people" and a Medicare prescription drug benefit -- has shifted to a broader population as employers who provide prescription drug coverage have passed on more costs to employees. As increased drug costs have prompted deficits in a number of state Medicaid programs, lawmakers in Congress have begun "vying to portray themselves as the better protectors of older people and other consumers against rising pharmaceutical prices." Some analysts have predicted that the issue will "loom large" in this year's elections "and maybe even longer." Sen. Byron Dorgan (D-N.D.) said that he will hold hearings this year on pharmaceutical industry prices and plans to support legislation that would allow imports of less expensive prescription drugs from Canada. House Republicans also hope to encourage the use of generic drugs, which cost less than brand-name versions, as part of a proposal to add a prescription drug benefit to Medicare. In addition, Business for Affordable Medicine, a coalition of employers, governors and labor unions, has lobbied for reforms to federal prescription drug patent law, which they have said "makes it too easy for the industry to stifle competition." Sens. Charles Schumer (D-N.Y.) and John McCain (R-Ariz.) introduced a bill last year that would "close what they assert are major loopholes" in the law. In the states, "legislators are interested -- more interested than ever, at least in numerical terms -- in trying to lower the cost of prescription drugs," Richard Cauchi, an analyst at the National Conference of State Legislatures, said. About 37 state legislatures have considered bills that would reduce drug costs through "buying clubs, bulk purchasing by the state and an array of other measures." Governors and state Medicaid directors also have begun "scrambling to find ways to hold down drug costs in health programs for low-income and disabled people."

'Political Backlash'
While, the pharmaceutical industry may face a "political backlash" over increased prescription drug costs, the New York Times reports that the industry plans to "ride out any political storm." PhRMA President and CEO Alan Holmer "dismisses the idea of a backlash" but has "acknowledged that the industry faces a skeptical public, despite years of image advertising." Holmer said that the PhRMA has expanded the group's "federal lobbying team" to 17 from three in 1997. In addition, the group has established a "state advocacy program" to lobby on the state level and has launched a national advertising campaign on the benefits of pharmaceutical research. Dorgan said, "The pharmaceutical industry is big and strong. Whenever I raise these issues, they send two well-dressed people to every news outlet in North Dakota, and they'll have charts and graphs and say what this is all about is the cost of finding new cures." John Rother, policy director for AARP, described Americans as "deeply ambivalent" about the pharmaceutical industry. "On the one hand, everybody's got their fingers crossed that the next big cure for cancer is going to be produced," he said. However, he said that "in terms of their business practices and pricing practices, I think [the pharmaceutical industry is] seen as the big bullies who are not looking after the public interest." Supporters of proposals to reduce prescription drug costs have said that "passing legislation will not be easy," but analysts predict that the issue "will almost certainly be fully aired on the campaign trail" (Toner, New York Times, 4/1).

Baby Boomers to Blame?
In related news, the Los Angeles Times reports that increased demand for prescription drugs among baby boomers has led to the rise in U.S. prescription spending "as much as the industry's price increases." A report released March 29 by the National Institute for Health Care Management said that prescription drug spending rose 17.1% from 2000 to 2001 and attributed most of the increase to a rise in the number of prescriptions for treatments "used extensively by older Americans" (White, Los Angeles Times, 3/30). The full article is available online.