Pharmaceutical Follies — Redux
“Pfizer and Other Drug Makers Report Higher Profits.” That was a headline in the October 20 th business section of The New York Times. Included was a sub-head reading, “The Medicare Part D prescription drug plan is having a positive impact on earnings.” That should not come as a surprise to those who read the three part series of articles titled “Pharmaceutical Follies” published in this blog in June of last year.
The series described the undue influence imposed by lobbyists on legislation as a result of the funneling of campaign funds to legislators. Despite this practice verging on legalized bribery, it is not only condoned, it is a perk to which legislators (of both parties) have become addicted. With the pharmaceutical industry, represented by its trade association Pharmaceutical Research and Manufacturers of America (PhRMA)) employing the largest number of lobbyists in Washington, it comes as no surprise when that endeavor more than pays for itself.
The pharmaceutical companies’ profits alluded to above are attributed to “price increases and growth in new prescriptions.” Both factors are the result of one of the most successful lobbying activities ever, one that produced the badly flawed Medicare Prescription Bill signed by President Bush in December, 2003. Not mentioned specifically in the article as a prime driver of profits is that portion of the drug bill that prohibits the Secretary of Health and Human Services from negotiating lower drug prices with the pharmaceutical companies. (If the Democrats gained control of both the House and the Senate, one of their first actions will be to reverse that decision).
If you have the patience to read what follows, you will be dismayed, disillusioned, and perhaps disgusted about the way the recent legislative process really has worked in Washington—how lobbyists have the power to control and even write legislation. This is an amazing revelation that has received little or no coverage in the media. It concerns a letter to the Republican majority leader, Dennis Hastert from three Democrat leaders, Nancy Pelosi, Democratic Leader, Steny H. Hoyer, Democratic Whip, and Henry A. Waxman, Ranking Minority Member of the Committee on Government Reform. While some Republicans might bristle at the contents and use the worst epithet possible to describe the authors, namely the “L” word (Liberal), which they are, it is difficult to refute the basic information. Read it and weep (for our country).
The letter, dated January 25, 2006, is addressed to Dennis Hastert, the Speaker of the House of Representatives. It calls for an investigation into the role that the Alexander Strategy Group, a lobbying firm closely linked to Tom DeLay and Jack Abramoff, played in crafting the Medicare Prescription Drug Act of 2003 and the budget reconciliation bill then pending before Congress.
It stated that “The Medicare Prescription Drug Act, which has caused so much confusion and havoc since January 1, was a product of a corrupt legislative process. When the bill passed, we knew that Democratic members had been denied opportunities to offer amendments and that the vote had been held open for hours in the dead of night to twist arms. [This was an act unprecedented in the long history of the House.] Afterwards, we learned that crucial cost estimates were illegally withheld (as well as deliberately understated) from Democratic members; that the key Administration official responsible for writing the bill was simultaneously negotiating a high-paying job representing drug and insurance companies; and that the Republican chairman responsible for steering the legislation through Congress subsequently accepted a lucrative job in the pharmaceutical industry.” [That was Billy Tauzin (R-LA) who became President of the Pharmaceutical Research and Manufacturers of America (PhRMA), the industry’s primary trade association with a salary of over $1 million a year—quite a payoff].
“We further learned about a Republican member who had alleged that a bribe had been offered him on the House floor [that was Tom DeLay, to change a vote on the drug prescription bill]. We know from lobby disclosure forms that the largest single client of the Alexander Strategy Group was the pharmaceutical industry, which paid the small firm over $2.5 million, including nearly $1 million in 2003 when the prescription drug law was being written. We also know from these records that the primary lobbyist for the drug industry at Alexander Strategy Group was Tony Rudy, who previously worked for both Mr. DeLay and Mr. Abramoff and who is identified as "Staffer A" in Mr. Abramoff's indictment. And we know from multiple accounts in the news media that the Alexander Strategy Group has been deeply implicated in the scandals now sweeping through Washington.” [As a result of these and other disclosures, that Group has been forced to go out of business, and Mr. Rudy pled guilty to a conspiracy charge].
The letter then demanded an investigation and ended by stating, “We have an obligation to the public - and especially to the seniors of America - to find out how the legislative process went astray and to hold those responsible to account.”
As far as I can determine, the request for an investigation was never approved by Speaker Dennis Hastert. That is not surprising since it was Hastert who in January, fired the Chairman of the House Ethics Committee and two other members (all Republicans) for having the impudence to file three admonishments (official letters of rebuke) against Tom DeLay that began the former majority leader’s ethical and legal free-fall. Now that Hastert himself is ethically suspect, is it any wonder that Congress is viewed with such disdain and antipathy? If you are interested in reading more, Google the following: “Medicare bill tied to Abramoff.”
Judge the So-Called Vote Expert
Now that the mid-term elections are over, you can judge the prediction by Jim McTague, a writer for Barron’s, whose headline read, “Why the Republicans will hang on to both the House and Senate on November 7.” It is his thesis that the winner “in about every race” can be predicted based on “which candidate had the largest campaign war chest, a sign of superior grassroots support.” (Unless Mr. Tague believes ‘grassroots’ is another word for lobbyists, he is being naïve). As a result, he maintains that polls can be ignored—it’s the money that counts. For example, in our own District 22, Republican Clay Shaw had raised $3.9 million while Democrat Ron Klein only $3.2 million. Mr. Tague maintains that Shaw would win. By now you know who won. Was it Shaw?
Mr. Tague suggests that looking at “House races back to 1972, you’ll find the candidate with the most money has won about 93% of the time, and that’s closer to 98% in recent years, according to the Center for Responsive Politics.” He admits “our method isn’t quite as accurate in senate races.” In those races, the cash advantage has spelled victory about 89% of the time since 1996.
In a well-publicized senate vote in New Jersey, he picks Democrat Bob Menendez ($10.5 million) over Republican Tom Kean ($5.6 million). In another highly controversial race in Montana, despite evidence that he received campaign funds from the notorious lobbyist, Jack Abramoff, the predicted winner was Republican Conrad Burns ($8.3 million) over democrat Jon Tester ($3.8 million). Even in Pennsylvania, the underdog in polls, Republican Rick Santorum has raised $17.3 million compared to his Democratic challenger, Bob Casey’s $15 million.
Mr. Tague admits however, that in 1968, 1974, and 1994, “the wave of anti-incumbent sentiment was so strong, that money didn’t trump voter outrage.” With the election over, we now know whether or not that same scenario played out in 2006.
To get back to the Rick Santorum race, it is the poster child for the first article above since it relates to the undue influence wielded by special interest groups, in this case the pharmaceutical industry through PhRMA. Of the top ten campaign fund recipients, Senator Santorum received the most money, over $450,000, primarily for his contributions to the Medicare Prescription Drug Bill that benefited the industry by prohibiting the government from negotiating prices, for inserting the concept of the doughnut hole into the bill, and thus for producing the record sales and profits mentioned above for the industry.
An additional roughly $1,000,000 of PhRMA funds was shared by six other Republican candidates, and as an indication of how pervasive this system is, two Democrats, including Edward Kennedy, and one Independent, Joe Lieberman, shared over $600,000. For a broader perspective consider these numbers: In 2005, about 3,000 pharmaceutical industry Washington lobbyists distributed some $2.3 billion to their friends in Congress. But in addition, 38,324 other lobbyists spread $952,676,588 to state legislators and executive offices.
I doubt that anyone, especially honest politicians (if that is not an oxymoron) would deny that power devolves to lobbyists, and the more money at a lobbyist’s disposal the more power he or she controls (think of Jack Abramoff). That brings to mind the axiom attributed to the legendary British historian, Lord Acton, “Power tends to corrupt, and absolute power corrupts absolutely.” The only pure solution is public funding of elections. Think about it!
Florida Bashed—Deservedly So?
As the author of articles published on the op-ed page of a newspaper, Stephen L. Goldstein is obviously not in the same league as Thomas Friedman or Frank Rich or Maureen Dowd, all of The New York Times—but then who is? Nevertheless, despite ignoring Goldstein’s columns in the Sun Sentinel for many years, I stumbled across two that had the audacity to denigrate the place I live in and love, and consider to be Paradise on earth, as many others also believe. After all, compared to almost any other area of the country or any other state, how dare he point out a few minor flaws that most citizens of the state are not aware of, nor do they apparently much care.
Here are some examples of Mr. Goldstein’s whiney complaints and criticisms in his own words: “…spooking voters with a Neanderthal religious-medical agenda to get right wing radicals to elect them, for eight years, Republicans have been guilty of malign, neglect — obsessing on ending legal abortions and exploiting Terri Schiavo, but ignoring real issues of life or death.” (C’mon now! Isn’t that a rather radical exaggeration? After all Terri Schiavo was smiling.) To back up this contention, all he has to go on is some cockamamie survey called the Morgan Quitno Health Care State Rankings 2006 and State Trend, Third Edition. This outfit has been publishing this survey for only the last 17 years so how accurate can it be?
Mr. Goldstein immediately places his reputation in jeopardy by prefacing some of the survey findings by stating, “It’s indisputable that Republicans have put us in the medical Stone Age.” Just read some of the findings and determine for yourself whether or not Goldstein exaggerates.
- Instead of effective sex education, Republicans have pushed “abstinence only.” Can you imagine that is blamed for Florida being third nationally in the number of births of teen-age mothers in 2000, 2002, and 2004? (That’s probably due to the fact that kids fall in love faster in hot weather).
- Florida was third in the nation for persons not covered by health insurance, and had the sixth highest percent of children not covered. (These people are probably exercising their prerogative to deny commissions to insurance agents).
- Florida has one of the highest incidences of AIDS infections, the second highest number of both reported cases, and number of AID cases in children 12 and younger. (I’m certain that if we really try, we can be number 1 next time).
- Ten years ago 6.7 percent of Floridians lacked access to primary care. Now that number has grown almost 135 percent to 15.7 percent, the worst in the nation. (Those damn doctors make too much money anyway).
Now I ask you, do our hard working politicians deserve that type of condemnation and criticism? In my opinion, the political leaders in Tallahassee have lived up to every expectation I anticipated. As if the above uncalled for tirade was not enough, in another column, Mr. Goldstein had some harsh words about Florida’s education system. I’ll describe them in the next issue.