Pharmaceutical Research and Manufacturers of America

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Pharmaceutical Research and Manufacturers of America, also known as PhRMA, is one of the largest and most influential lobbying organizations in Washington.[1] Representing 48 pharmaceutical companies, PhRMA has 20 registered lobbyists on staff[2] and has contracted with dozens of lobby and PR firms -- including Akin, Gump, Strauss, Hauer & Feld,[3] Barbour Griffith & Rogers,[4] DCI Group[5] and The Dutko Group[6]-- to promote its members' interests. PhRMA has a record of hiding its lobbying and PR activities, often by paying other organizations, such as United Seniors Association (USA) or the Consumer Alliance, to advocate industry-friendly policies.[7]

PhRMA's President and CEO until he stepped down in February 2010, former Louisiana congressman Billy Tauzin,[8] received $4.6 million in compensation from PhRMA in 2009.[9]

PhRMA's Chairman, Sanofi-aventis CEO Chris Viehbacher, made $4.94 million in 2010.[10]

Ties to the American Legislative Exchange Council

PhRMA was a 2011 recipient of ALEC's Private Sector Member of the Year Award and a "Chairman" level sponsor of 2011 ALEC Annual Conference, which equated to $50,000 in 2010. It was also a sponsor of Louisiana Governor Bobby Jindal's plenary luncheon speech at the 2011 ALEC Annual Conference.[11]

A list of ALEC corporations can be found here.

About ALEC
ALEC is a corporate bill mill. It is not just a lobby or a front group; it is much more powerful than that. Through ALEC, corporations hand state legislators their wishlists to benefit their bottom line. Corporations fund almost all of ALEC's operations. They pay for a seat on ALEC task forces where corporate lobbyists and special interest reps vote with elected officials to approve “model” bills. Learn more at the Center for Media and Democracy's ALECexposed.org, and check out breaking news on our PRWatch.org site.


PhRMA is on the corporate ("Private Enterprise") board of the American Legislative Exchange Council (ALEC) as of 2011. Jeff Bond, Senior Vice President of PhRMA, represents PhRMA on the corporate board;[12] and Jeff Buel, Johnson & Johnson's representative at PhRMA, and Kristin Parde, a PhRMA Director, represent PhRMA on the Executive Committee of ALEC's Health and Human Services Task Force, both as of 2011.[13] In August 2011, Parde was given ALEC's 2011 Private Sector Member of the Year Award. Also in August 2011, PhRMA sponsored Louisiana Governor Bobby Jindal's plenary luncheon speech at ALEC's 2011 annual meeting in New Orleans. PhRMA President and CEO, John Castellani, also gave a plenary luncheon speech.[14] PhRMA was also a "Chairman" level sponsor of that conference[14] ($50,000 in 2010)[15] and a member of the Louisiana Host Committee.[14]

In 2010, PhRMA contributed $356,075 to ALEC's "Scholarship Fund." The Fund compensates state legislators that are ALEC members for the traveling expenses they incur to attend ALEC conferences, including the costs of flights and hotels. PhRMA's 2010 IRS filings list the location of the recipient of the funds at the address of the offices of Hamilton Consulting in Madison, WI rather than ALEC's office in Washington, DC. The tax filing raised questions about which legislators were benefitting from PhRMA's contributions and why PhRMA made the decision to funnel its funds through Wisconsin.[16]

Soon after Wisconsin Governor Scott Walker came into office, Walker and GOP state legislators pushed for the adoption of Wisconsin Act 2, an ALEC-influenced bill that benefitted the bottom line of PhRMA members. The bill seeks to implement "tort reform" by "limiting the ability to hold corporations accountable for causing injury or death" and "make it easier for corporations like drugmakers to escape liability for manufacturing dangerous products or products with insufficient warnings about hazards." The legislation drew heavily from ALEC Model bills on tort reform, including the "Constitutional Guidelines for Punitive Damages Act" and the "Product Liability Act." On January 27, 2011, the bill was signed into law. Republicans also sought to pass LRB 2890, a bill introduced in October 2011 that is based on ALEC's "Drug Liability Act." The bill "gives drug and medical device manufacturers complete immunity from lawsuits based on strict liability if the product was approved by the Food and Drug Administration." [17]

Political Contributions and Lobbying

In 2010, PhRMA spent $21,740,000 on lobbying costs.[18] It has 20 lobbyists on staff in 2011 [19] and had 29 in 2010.[20] PhRMA has lobbied for 22 bills in 2011[21] and lobbied for 51 bills in 2010.[22]

Open Secrets reports that in 2010, PhRMA gave a total of $58,800 to House candidates ($40,800 to Democrats) and $65,000 to Senate candidates ($50,500 to Democrats).[23]

See below for more, including the list of lobbyists active for PhRMA in 2011.

Funding groups and PACs

The February 2003 issue of the AARP Bulletin reported: "Three nonprofit organizations that claim to speak for older Americans are in fact heavily bankrolled by the pharmaceutical industry, an examination of tax records by the AARP Bulletin shows. United Seniors Association, for example, got more than a third of its funds in 2001 from drug-industry sources. The big donors included Pharmaceutical Research and Manufacturers of America (PhRMA), the industry's trade association; Citizens for Better Medicare, a PhRMA-funded nonprofit group; and Pfizer Inc. Total industry contributions: at least $3.1 million."

"PhRMA Appears to Have Funneled Up to $41 Million To "Stealth PACs" to Help Elect a Drug Industry-Friendly Congress," according to a Sept. 2004 report published by stealthpacs.org.

PhRMA PR campaigns

2006: Qorvis and new medicines

In September 2006, the PR industry trade press reported that PhRMA had retained Qorvis Communications, "for a national PR campaign to educate the public about the good work done by drug companies and the important role they play in developing new medicines." [1]

"The PhRMA strategy emphasizes public and media education about the organization’s core mission and values and its advocacy for public policies that encourage the discovery of important new medicines," according to the Holmes Report. "Qorvis will employ a campaign-style approach that is intended to complement PhRMA’s new communications department, which has replaced a once-rigid structure of silos around individual issues with a flat, team-based model the group says has encouraged increased flexibility and creativity." [2]

"Since being named CEO at PhRMA more than a year ago, former Louisiana Representative Billy Tauzin and his communications team, led by Ken Johnson, have been implementing an aggressive public relations campaign in an attempt to address the industry's numerous reputation challenges, from pricing to safety to whether drugs are marketed over-aggressively," wrote the Holmes Report. [3]

2005: Aggressive PR

In May 2005, it was reported that PhRMA was launching "an aggressive new PR plan," highlighting its new CEO, former Congressman and cancer survivor Billy Tauzin. According to PhRMA senior vice-president of communications Ken Johnson (who should not be confused with the Ken Johnson who is the Southern Regional Director of the AFL-CIO), the new plan includes reorganizing media relations "almost like a beat system," with point people for "state, federal, or international outreach."

PhRMA also launched a radio series called Healthcare Now, "which Johnson likens to an ANR (audio news release) that can be played in small markets without health reporters." PhRMA is also "building an onsite studio" to allow Tauzin to do more television interviews and speaking events. Johnson said part of PhRMA's PR strategy is to make Tauzin "an evangelist for the pharmaceutical industry." [4]

2005: Pricing issues and marketing

In late March 2005, the Los Angeles Times reported that the pharmaceutical industry was facing "pressure from many states to provide cheaper prescription drugs." Washington state and Rhode Island legislators were considering how to control medical costs, and "Ohio and Maine recently have launched their own discount plans for low-income people." Yet PhRMA, along with individual drug companies, "launched its most aggressive counterattack in California," to defeat a proposed ballot initiative "even before the authors have gathered enough signatures to qualify it for the next election." PhRMA vice-president Jan Faiks said, "We take [the proposed initiative] as such a serious threat to the health and welfare of the pharmaceutical industry that we have to make a stand here," in California. "It's a very bad precedent. You're the leader in the country, and there are 26 states that allow ballot initiatives." [5]

Part of industry's concern at the proposed California initiative, authored by the Oakland nonprofit organization Health Access California, was due to its "punishing individual manufacturers that decline to lower prices voluntarily" - a level of enforcement the industry had been able to avoid in other states. Under the proposed California initiative, "drug companies that do not consent to the discounts could be shut out of a prized market: the state's huge Medi-Cal program, which annually buys $3 billion worth of drugs for the poor." [6]

PhRMA, along with the drug companies Johnson & Johnson, Pfizer, GlaxoSmithKline, Abbott Laboratories, Amgen, AstraZeneca, Eli Lilly, Novartis and Wyeth, "pledged to donate at least $10 million in California to fight proposed ballot initiatives that would mandate lower drug prices." ($8.6 million had been raised by late March 2005.) The industry hired "Sacramento's best-connected Democratic strategists ... to cut a deal with the Democrat-controlled Legislature and avert a ballot battle." Those lobbyists were former Assembly Speaker Willie Brown, former Gray Davis speechwriter Jason Kinney, former Davis campaign advisor and labor commissioner Steve Smith, and Schwarzenegger recall campaign strategist Bob White. PhRMA also negotiated with Governor Arnold Schwarzenegger, to develop an alternative "voluntary discount plan called California Rx." [7]

Perhaps most disturbingly, PhRMA threatened "retaliatory initiatives aimed at trial lawyers and unions, which are most likely to be donors to Health Access' ballot measure." The industry's "two companion ballot measures" were unmistakably "aimed at the heart of Democrats' donor base." One measure "would slash trial lawyers' contingency fees," while the other "would require public employee unions to obtain members' permission before spending their dues on political activities." PhRMA's Frank Schubert, who is managing the initiative campaigns, said, "It certainly is a signal to the unions that they're not going to engage in a one-handed attack, that the industry is going to fight for its interests and the interest of the patients that it serves." [8]

2004: Depression calculator

In June 2004, PhRMA teamed up with the U.S. Chamber of Commerce and the American Psychiatric Association "to demonstrate the cost of depression in the workplace and to show employers that treating affected workers would improve the bottom line." The three groups endorsed a "depression calculator," which allows employers to estimate the effect of untreated depression on their company's profits, through absenteeism and low productivity. The calculator also figures "how much the business would save if employees were treated."[9] The Arizona-based "health-care consulting firm" The HSM Group organized the calculator's public "introduction." At the press conference unveiling the calculator, PhRMA's senior vice president for policy, research and strategic planning, Richard Smith, said: "A depressed employee is less productive or absent for 30 to 50 days a year. ... The person's medical costs are $2,000 to $3,000 more than other employees."[10]

Self-regulation of drug ads

In May 2005, former member of Congress Billy Tauzin, then PhRMA's head lobbyist, told the New York Times that "drug companies [are] trying to develop a voluntary code of conduct for the advertising of prescription medicines on television and in print." Tauzin said "a good strong code" would likely be issued in June or July 2005. However, "one purpose" for the code "is to fend off more stringent federal regulation," wrote the New York Times. [11] "Better to self-regulate than to have someone else tell you how to conduct your business," one pharmaceutical marketing chief told Advertising Age.

PhRMA's guidelines for direct-to-consumer (DTC) drug ads were being developed as mounting evidence suggests "drug sales don't necessarily rise or fall as TV ads are boosted or reduced," because, unlike other products, "a consumer can't buy a prescription drug without a doctor's signature," reported the Wall Street Journal. In addition, "the safety controversy over highly advertised painkillers Vioxx from Merck & Co. and Celebrex from Pfizer" increased scrutiny of drug ads. [12]

PhRMA's Board of Directors approved the "PhRMA Guiding Principles: Direct to Consumer Advertisements About Prescription Medicines" (PDF file) on July 29, 2005. The policy was officially announced by Tauzin on August 2, 2005, at the American Legislative Exchange Council's 32nd Annual Meeting. PhRMA touted the guidelines, slated to go into effect in January 2006, as a way to educate patients. Along with the guidelines, PhRMA created an "Office of Accountability," to receive "comments from the general public and health care professionals regarding direct-to-consumer advertising done by companies that adopt these principles." [13]

Consumer groups blasted PhRMA's guidelines. Commercial Alert's Gary Ruskin called them "utterly lacking in principle. They are a public relations exercise that cloaks doing nothing in a stream of verbiage that sounds like doing something. They will cause no inconvenience for the drug industry and no real change of behavior. Their aim is to shield the profits of the drug companies, not the health of Americans. Nor will they stop the fleecing of taxpayers, through excess demand for prescription drugs. ... The new PhRMA policy is even soft on erectile dysfunction ads. Parents shouldn't have to shield their children from raunchy drug ads." [14] Consumers Union called the PhRMA guidelines "a placebo that will have little impact on informing consumers about the real effectiveness of drugs or their possible safety risks." [15]

In January 2006, just after the PhRMA guidelines went into effect, Advertising Age reported, "Drug makers appear to be abiding by the 15-point code of conduct with very few exceptions. One exception: None of the ads [the reporter viewed] conformed to Guideline No. 15: Companies are encouraged to include information in all DTC advertising, where feasible, about help for the uninsured and underinsured. Also, some of the 15-second spots were not able to adhere to Guideline No. 4: DTC TV and print advertising of prescription drugs should clearly indicate that the medicine is a prescription drug" (Rich Thomaselli, "Big Pharma Keeps Its New Year's Resolution," Advertising Age, January 9, 2006).

FDA funding fees

U.S. government regulating agencies don't negotiate their budgets with industries they oversee, with the exception of the Food and Drug Administration (FDA). In the early 1990s, the pharmaceutical industry began paying the FDA millions of dollars in user fees in order to speed up the drug approval process. These fees "now fund more than half the agency's critical drug-review process." Industry groups and the FDA renegotiate the fees and how they're used every five years, giving drug makers "considerable input into which programs receive funding." In 2006 the FDA negotiated an agreement with the Pharmaceutical Research and Manufacturers of America and Biotechnology Industry Organization. Industry groups pushed for even faster decisions on labeling and other "conditions" of new drugs and the FDA negotiated more funding to monitor drug safety following approval.[24]

International activities

PhRMA lobbying activities have extended outside of the United States. "America's big drug companies are intensifying their lobbying efforts to 'change the Canadian health-care system' and eliminate subsidized prescription drug prices enjoyed by Canadians," CanWest News Service reported on June 9, 2003. "A prescription drug industry spokesman in Washington confirmed to CanWest News Service that information contained in confidential industry documents is accurate and that $1 million US is being added to the already heavily funded drug lobby against the Canadian system." PhRMA was the leading drug industry trade group behind the increased lobbying and PR campaign. PhRMA was also independently spending $450,000 to target the booming Canadian Internet pharmacy industry, which has been providing Americans with prescription drugs at lower prices than in the United States.

Personnel

2010 and 2011

  • Chris Viehbacher - Chairman of the PhRMA Board: CEO of Sanofi-aventis
  • John J. Castellani - President and Chief Executive Officer: Pharmaceutical Research and Manufacturers of America
  • Billy Tauzin - President and Chief Executive Officer of PhRMA until February 2010[25]
  • Mimi Simoneaux - Vice President
  • Thomas Moore - Director
  • Christopher Singer - Executive Vice President and COO
  • Bryant Hall - Senior Director
  • Steven Tiltion - Vice President
  • Kevin Walker - Vice President
  • Chip Davis - Executive Vice President of Advocacy

Previously

  • Christopher Badgley: Vice President, State Government Affairs
  • Chris Singer: Chief Operating Officer and Executive Vice President
  • Edward Belkin: Vice President, Communications
  • Alan Gilbert: Senior Vice President, Federal Affairs
  • Mark Grayson: Deputy Vice President, Communications and Public Affairs
  • Billy Tauzin: President and Chief Executive Officer
  • Anne Holmes: PAC Contact and Senior Manager, Federal Affairs
  • William L. Lucas: Associate Vice President, State Government Affairs
  • Kurt Malmgren: Senior Vice President, Government Affairs and Alliance Development
  • Lori Reilly: Vice President, Policy
  • Richard "Rick" Smith: Senior Vice President, Policy and Strategic Communications
  • Derrick White: Associate Director, Federal Affairs

Some of PHRMA's registered lobbyists

In 2011, PhRMA had 20 registered lobbyists on staff[26]:

  • Anway, Mike
  • Bermingham, Maya
  • Burkholder, Randy
  • Castellani, John J
  • Davis, Chip
  • Douglas, Andrea Jean
  • Filippone, Bob
  • Fisher, Margaret Lea
  • Gierer, Gregory
  • Jewett, Valerie H
  • Kaplan, Ann
  • Korn, David
  • Love, Kimberly
  • Maranchick, Hallie
  • Martello, Kendra
  • Nagle, Brian
  • Pritchett, Anne
  • Reilly, Lori
  • Smith, Richard I
  • Sulkala, Matt

PhRMA also contracts with many other lobbying firms.[27]

According to a discloure form for the first six months of 2007, filed with the U.S. Senate by PHRMA, the group's registered lobbyists were [28]:

PhRMA spent $10.7 million in the first six months of 2007 lobbying the U.S. government. In the preceding six-month period, PhRMA spent $8.8 million. Associated Press reports that in PhRMA'S latest lobbying report, required under the Lobbying Disclosure Act of 1995, the group states that it had lobbied Congress, the U.S. Food and Drug Administration and the Department of Health and Human Services and other agencies on "issues related to Medicare, patent reform, international trade and drug fees, importation and safety". [29]

PhRMA's top lobbyist during the healthcare debates in 2009-2010, Bryant Hall, started his own firm, Rubicon Strategies, owned by the Tiber Creek Group.[30]

Former staff

PR firms employed

Contact

Pharmaceutical Research and Manufacturers of America
950 F Street N.W.
Washington, DC 20004
Telephone: 202-835-3400
Fax: 202-835-3414
Website: phrma.org

Articles and resources

Related SourceWatch articles

External resources

External articles

References

  1. Mike Lillis, Drug lobby defends rise in prices, The Hill, August 25, 2010
  2. Center for Responsive Politics, Lobbyists working for Pharmaceutical Rsrch & Mfrs of America 2011, OpenSecrets.org lobbying database, accessed July 8, 2011
  3. Center for Responsive Politics, Itemized Lobbying Expenses for Pharmaceutical Rsrch & Mfrs of America 2008, OpenSecrets.org lobbying database, accessed July 8, 2011
  4. Center for Responsive Politics, Itemized Lobbying Expenses for Pharmaceutical Rsrch & Mfrs of America 2007, OpenSecrets.org lobbying database, accessed July 8, 2011
  5. Center for Responsive Politics, Itemized Lobbying Expenses for Pharmaceutical Rsrch & Mfrs of America 2006, OpenSecrets.org lobbying database, accessed July 8, 2011
  6. Center for Responsive Politics, Itemized Lobbying Expenses for Pharmaceutical Rsrch & Mfrs of America 2004, OpenSecrets.org lobbying database, accessed July 8, 2011
  7. Public Citizen, PhRMA Appears to Have Funneled Up to $41 Million To “Stealth PACs” to Help Elect a Drug Industry-Friendly Congress, organizational report, September 20, 2004
  8. Chris Frates & Carrie Budoff Brown, Billy Tauzin to step down from PhRMA, Politico, February 12, 2010
  9. PhRMA, 2009 Form 990, Internal Revenue Service form filed by organization, November 11, 2010
  10. Christopher Viehbacher, Forbes.com, accessed July 9, 2011
  11. [American Legislative Exchange Council, 2011 Conference Sponsors, conference brochure on file with CMD, August 11, 2011]
  12. American Legislative Exchange Council, Private Enterprise Board, organizational website, accessed July 8, 2011
  13. American Legislative Exchange Council Private Sector Executive Committee, organization website, accessed June 2, 2011
  14. 14.0 14.1 14.2 American Legislative Exchange Council, "Solutions for the States," 38th Annual Meeting agenda, on file with CMD, August 3-6, 2011
  15. American Legislative Exchange Council, Sponsorship Opportunities at ALEC's Annual Meeting, organizational website, 2010, accessed August 4, 2011
  16. Brendan Fischer, Why Did PhRMA Spend $356K on ALEC in Wisconsin? PR Watch, March 12, 2012
  17. Brendan Fischer, Why Did PhRMA Spend $356K on ALEC in Wisconsin? PR Watch, March 12, 2012
  18. Center for Responsive Politics, PhRMA 2010 Lobbying, OpenSecrets.org lobbying database, accessed July 10, 2011
  19. Center for Responsiev Politics, Lobbyists working for PhRMA, 2011, OpenSecrets.org lobbying database, accessed July 10, 2011
  20. Center for Responsive Politics, PhRMA Lobbyists working for PhRMA, 2010, OpenSecrets.org lobbying database, accessed July 10, 2011
  21. Center for Responsive Politics, PhRMA Bills Lobbied, 2011, OpenSecrets.org lobbying database, accessed July 10, 2011
  22. Center for Responsive Politics, PhRMA Bills Lobbied, 2010, OpenSecrets.org lobbying database, accessed July 10, 2011
  23. Center for Responsive Politics, PhRMA Contributions to Federal Candidates, OpenSecrets.org PAC database, accessed July 10, 2011
  24. Anna Wilde Matthews, "Drug Firms Use Financial Clout To Push Industry Agenda at FDA", Wall Street Journal, September 2006.
  25. Chris Frates & Carrie Budoff Brown, Billy Tauzin to step down from PhRMA, Politico, February 12, 2010
  26. Center for Responsive Politics, Lobbyists working for PhRMA, 2011, OpenSecrets.org lobbying database, accessed July 10, 2011
  27. Center for Responsive Politics, Lobbying Firms working for PhRMA, 2011, OpenSecrets.org lobbying database, accessed July 10, 2011
  28. "Drug Trade Group Spent $10.7M Lobbying", Associated Press, August 17, 2007.
  29. "Drug Trade Group Spent $10.7M Lobbying", Associated Press, August 17, 2007.
  30. Chris Frates, Top PhRMA lobbyist starts new firm, Politico.com, January 4, 2011