November 4, 2001

DRUG INDUSTRY
A Muscular Lobby Tries to Shape Nation's Bioterror Plan

By LESLIE WAYNE and MELODY PETERSEN

With anthrax spores turning up all over Washington, plenty of people are heading out of town.

Not those in the drug industry.

Executives of the major pharmaceutical companies have been hopping trains and planes to the nation's capital, where they are staging an enormous lobbying campaign, at the highest levels of government, to help shape the nation's bioterrorist plan ÷ and beyond.

So far, they have had some remarkable victories. While the government has struggled to make sure the nation will have enough drugs to treat biological weapons that were largely hypothetical a few months ago, drug companies have managed to stave off many actions that would harm them, like violating patents or forcing them to supply free drugs.

As that success shows, the pharmaceutical lobby, which represents the nation's biggest drug makers, from Eli Lilly to Pfizer (news/quote) to Merck (news/quote), is both large and politically adroit and, if anything, more sophisticated than when it gained fame in the early 1990's for helping to defeat the Clinton administration health plan.

It has more lobbyists than there are members of Congress ÷ 625 who are registered. It had a combined lobbying and campaign contribution budget in 1999 and 2000 of $197 million, larger than any other industry. Now it is harnessing those resources to influence major policy decisions being made by the Bush administration that may well influence public health issues and industry profitability for years to come ÷ much to the dismay of many consumer groups and others.


"When you've got this access to high places, it will encourage these guys to coordinate instead of compete," said Jack Calfee, a health care expert at the American Enterprise Institute, the conservative research group. "It's more likely to forestall getting good products than to encourage it."

Because of the anthrax scare, and all the attention given to Cipro, the anti-anthrax drug of choice, that access has been enormous. In recent weeks, the chief executives and other top executives of Merck, Bristol-Myers Squibb (news/quote), Bayer, Pfizer, Eli Lilly and Johnson & Johnson (news/quote), along with trade association officials, have been meeting regularly with Bush cabinet members. On one occasion, with executives from other industries, pharmaceutical executives met with President Bush in New York to discuss the administration's response to terrorism. Drug company executives have offered to send scores of industry scientists, now on their payrolls, to work in government agencies in what the industry calls a gift to the nation, but critics say it is both a conflict of interest and a way for the industry to get a toehold in government.

In return, at these top-level meetings, industry executives and lobbyists are seeking exemption from antitrust regulations, reduction of the timetable for getting new drugs to market for treating the ills of biological warfare, and immunity from lawsuits for any vaccines they develop to combat bioterrorism. The administration, those in the meeting say, has offered other help, asking the pharmaceutical executives to identify the regulatory barriers they would like to see eliminated for this fight.

Last Wednesday, for instance, a dozen industry lobbyists and executives, among them Peter R. Dolan, chief executive of Bristol-Myers, and Raymond V. Gilmartin, chief executive of Merck, met for an hour and a half in the Roosevelt Room of the White House with Tom Ridge, the director of homeland security. According to one person at the meeting, Mr. Ridge was so impressed with what the industry executives said that he responded: "I'm grateful for your offers of assistance. I accept."

That , according to the meeting's participant, reflected "a true partnership between the federal government and America's pharmaceutical companies."

Industry executives say they are just trying to help. "We are part of the nation's defense system," said Mr. Dolan, who has met with President Bush in New York and with Tommy G. Thompson, the secretary of health and human services, and Mr. Ridge in Washington. "As an industry, there is a real opportunity for us to give our resources in a time of great need."

But that partnership is troubling to some industry watchdog groups. They say the cozy relationship threatens to compromise regulatory standards on new applications of medicines at a time when millions of Americans may be seeking new drugs and vaccines. They worry that the industry's efforts to present its proposals as patriotic gestures mask an effort to increase its power in Washington and to improve its image while still protecting its financial interests. Critics also say consumer groups and executives from generic drug companies, which make cheaper copies of well-known drugs, have been conspicuously absent from any administration meetings.

"I am concerned that the industry is trying to subvert the normal regulatory process," said Dr. Sidney Wolfe, director of the health research group of Public Citizen, a Washington research organization. "These meetings have no transparency, no openness nor any involvement of the public. It's a dangerous precedent."

The pharmaceutical industry, of course, has not always had its way. Some of its efforts to speed federal drug approval have failed. Federal regulators are actively investigating several companies' attempts to keep generic drugs off the market and are taking a harsh look at some marketing practices.

There is no lobby in Washington as large, as powerful or as well-financed as the pharmaceutical lobby. Battle-honed over a number of health care initiatives that began with the creation of the Medicare program in the 1960's, the industry spent $177 million on lobbying in 1999 and 2000 ÷ a good $50 million more than its nearest rivals, the insurance and telecommunications industries.

Thanks to Washington's well-oiled revolving door between government and business, the industry is able to claim friends in especially high places. Defense Secretary Donald Rumsfeld is the former chief executive of the drug maker G. D. Searle, for example, and Mitchell E. Daniels Jr., the White House budget director, is a former Eli Lilly executive.

Even more important, more than half the drug industry's 625 registered lobbyists are either former members of Congress or former Congressional staff members and government employees, according to a report from Public Citizen. Former members of Congress who now work for the industry include Beryl F. Anthony Jr., Birch Bayh, Dennis DeConcini, Vic Fazio, Norman F. Lent, Robert L. Livingston, Bill Paxon, Robert S. Walker and Vin Weber. While in Congress, many of them led key legislative committees, and they still have close ties to those now in power.