Drug Industry Adapts to Democrats' Mounting Clout

October 24, 2008 - The Wall Street Journal
By T.W. Farnam, Alicia Mundy and Brad Haynes

WASHINGTON -- The pharmaceutical industry is paying $13.2 million to run advertisements supporting 28 politicians, all but three of them Democrats, in an example of how interest groups are already adjusting to the prospect of stronger Democratic control of Congress in 2009.

The ad campaign thanks the legislators for supporting a children's health-care bill vetoed twice by President George W. Bush in 2007, but the bill carried few financial implications for the industry. The group running the campaign says it singled out the lawmakers for praise because they were under pressure to switch their votes. Some of them could also play key roles in shaping bills that pose serious hazards for drug makers.

The warm and fuzzy ads were produced by the nonprofit America's Agenda: Health Care for Kids. The group was started last month and says Pharmaceutical Research and Manufacturers of America, the main drug-industry trade group, is its sole funder.

PhRMA has also been collaborating with other one-time foes. For about two years, it has been working with unions through another America's Agenda group to push universal-health-care bills in states and cities across the country. And after years of donating overwhelmingly to Republicans, the pharmaceutical industry is now splitting campaign contributions between the political parties.

"They've been very supportive of everything we've been trying to do in every state," said Doug Dority, the president of both America's Agenda groups. "They've been involved certainly as much as all of the unions have and it's very encouraging to see."

Five of the Democratic senators lauded by the ads aren't up for re-election this year. Over images of smiling children, the narrator tells constituents to call their lawmakers and "tell them to keep fighting to insure our kids."

Many of the 28 lawmakers support efforts opposed by the drug industry. All of the Democrats mentioned want the government to negotiate a lower price for prescriptions through the Medicare program, and the lawmakers largely support the importation of less-expensive drugs.

Some are in critical positions to influence legislation. Sens. Susan Collins (R., Maine) and Byron Dorgan (D., N.D.) co-sponsored a bill to reimport Canadian drugs. Sen. Max Baucus (D., Mont.) is chairman of the Finance Committee, which would consider proposals for Medicare price negotiations.

Mr. Dority, the former president of the United Food and Commercial Workers union, said he first met with PhRMA representatives about two years ago, shortly before the 2006 midterm elections, when Democrats recaptured control of Congress. This summer he started a campaign to push for expansion of the State Children's Health Insurance Program, commonly known as SCHIP, which many thought would come up for another vote again this fall. PhRMA answered his call for donations.

"I think they realize that the only way to have any serious respect by the vast population of people is to start working toward solving the health-care problems," Mr. Dority said.

PhRMA's president, former Rep. Billy Tauzin of Louisiana, has been trying to restore the drug industry's tarnished image. His efforts include a TV ad campaign touting programs to help needy patients pay for their medicines; hurricane hotlines for drug supplies; and the syndicated TV show "Sharing Miracles," in which survivors of chronic diseases tell their stories to Mr. Tauzin, a cancer patient himself.

PhRMA officials say the latest ads praising the legislators are part of a political strategy separate from the public-relations campaign. "The SCHIP ads are about good policy," said Ken Johnson, a senior vice president at PhRMA. "We are trying to promote programs that encourage greater access to health care."

Democratic leaders' agenda also includes limiting drug makers' direct-to-consumer advertising and strengthening consumers' right to sue drug makers for damages. One pending bill would change regulations that affect imported drugs and make the Food and Drug Administration a more powerful regulator.

"We are constantly confronted with a lot of difficult challenges," Mr. Johnson said. "Many critics, including some politicians, unfairly demagogue our industry."

The two companies that arranged the ads are run by Democratic consultant Steve McMahon, former top aide to Democratic National Committee Chairman Howard Dean, and by Republican strategist Alex Castellanos, who has worked for Bob Dole and George W. Bush. The company of Mr. McMahon, the Democrat, got about $12 million and Mr. Castellanos, the Republican, got about $1 million.

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