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"If you have ever wondered why the cost of prescription drugs in the United States are the highest in the world or why it's illegal to import cheaper drugs from Canada or Mexico, you need look no further than the pharmaceutical lobby and its influence in Washington, D.C. Congressmen are outnumbered two to one by lobbyists for an industry that spends roughly a $100 million a year in campaign contributions and lobbying expenses to protect its profits."
-- CBS News, 4/1/07
http://www.cbsnews.com/stories/2007/03/29/60minutes/main2625305.shtml
NEW YORK, April 1, 2007
Under The Influence
60 Minutes' Steve Kroft Reports On Drug Lobbyists' Role
In Passing Bill That Keeps Drug Prices High
If you have ever wondered why the cost of prescription drugs in the United States are the highest in the world or why it's illegal to import cheaper drugs from Canada or Mexico, you need look no further than the pharmaceutical lobby and its influence in Washington, D.C.
According to a new report by the Center for Public Integrity, congressmen are outnumbered two to one by lobbyists for an industry that spends roughly a $100 million a year in campaign contributions and lobbying expenses to protect its profits.
One reason those profits have exceeded Wall Street expectations is the Medicare prescription drug bill. It was passed three-and-a-half years ago, but as 60 Minutes correspondent Steve Kroft reports, its effects are still reverberating through the halls of Congress, providing a window into how the lobby works.
The unorthodox roll call on one of the most expensive bills ever placed before the House of Representatives began in the middle of the night, long after most people in Washington had switched off C-SPAN and gone to sleep.
The only witnesses were congressional staffers, hundreds of lobbyists, and U.S. Representatives like Dan Burton, R-Ind., and Walter Jones, R-N.C.
"The pharmaceutical lobbyists wrote the bill," says Jones. "The bill was over 1,000 pages. And it got to the members of the House that morning, and we voted for it at about 3 a.m. in the morning."
Why did the vote finally take place at 3 a.m.?
"Well, I think a lot of the shenanigans that were going on that night, they didn't want on national television in primetime," according to Burton.
"I've been in politics for 22 years," says Jones, "and it was the ugliest night I have ever seen in 22 years."
The legislation was the cornerstone of Republican's domestic agenda and would extend limited prescription drugs coverage under Medicare to 41 million Americans, including 13 million who had never been covered before.
At an estimated cost of just under $400 billion over 10 years, it was the largest entitlement program in more than 40 years, and the debate broke down along party lines.
[Editorial note: Usually Republicans are against entitlement programs while Democrats support them. Why was it the opposite in this case?]
But when it came time cast ballots, the Republican leadership discovered that a number of key Republican congressmen had defected and joined the Democrats, arguing that the bill was too expensive and a sellout to the drug companies. Burton and Jones were among them.
"They're suppose to have 15 minutes to leave the voting machines open and it was open for almost three hours," Burton explains. "The votes were there to defeat the bill for two hours and 45 minutes and we had leaders going around and gathering around individuals, trying to twist their arms to get them to change their votes."
Jones says the arm-twisting was horrible.
"We had a good friend from Michigan, Nick Smith, and they threatened to work against his son who wanted to run for his seat when he retired," he recalls. "I saw a woman, a member of the House, a lady, crying when they came around her, trying to get her to change her votes. It was —it was ugly."
When the prescription drug bill finally passed shortly before dawn, in the longest roll call in the history of the House of Representatives, much of the credit went to former Congressman Billy Tauzin, R-La., who steered it through the house.
"It's just a messy process," Tauzin says. "I mean, the old adage about if you like sausage or laws, you should not watch either one of them being made is true. It's a messy process."
Tauzin says that the voting machines were open for three hours "because the vote wasn't finished."
As for arms being twisted? "People were being talked to," he says.
And of Walter Jones' comment that it was the "ugliest night" he had "ever seen in politics in 22 years?"
"Well, he's a young member," counters Tauzin with a laugh. "Had he been around for 25 years, he'd have seen some uglier nights."
It certainly wasn't ugly for the drug lobby which invested more than $10 million in campaign contributions during the last election and has been a source of lucrative employment opportunities for congressmen when they leave office.
Former senators Dennis Deconcini, D-Ariz., and Steve Symms, R-Idaho, and former congressmen like Tom Downey, D-N.Y.; Vic Fazio, D-Calif.; Bill Paxon, R-N.Y., and former House Minority Leader Robert Michel, R-Ill., all registered as lobbyists for the drug industry and worked on the prescription drug bill.
"I can tell you that when the bill passed, there were better than 1,000 pharmaceutical lobbyists working on this," says Rep. John Dingell, D-Mich.
Dingell has been in Congress for 52 years and is the new chairman of the House Energy and Commerce Committee which shares jurisdiction over Medicare. He says the bill would not have passed without the efforts of the drug lobby.
"There is probably a lotta truth in it that the bill was stacked in their benefit. And it's probably also true that it was written by their lobbyists," he says.
Says Jones: "You couldn't even walk to the steps of the Capitol without having somebody, maybe one or two, coming up to you to say, 'Can't you change your vote? Can't you vote for this bill?' "
Why was the drug lobby was so interested in this bill and what did it have to gain? Ron Pollack the executive director of Families USA, a nonpartisan health care watchdog group, says it all boiled down to a key provision in the legislation.
It prohibited Medicare and the federal government from using its vast purchasing power to negotiate lower prices directly from the drug companies.
"The key goal was to make sure there'd be no interference in the drug companies' abilities to charge high prices and to continue to increase those prices," says Pollack.
Pollack says there's no question that this was prompted by the pharmaceutical lobby.
"They were the ones who wanted to make sure Medicare could charge high prices and to continue to increase those prices," he said.
The drug industry says that competition among private insurance plans that service the Medicare program help keep prices low. But Families USA reported in a January study that Medicare patients are being charged nearly 60 percent more for the top 20 drugs than veterans pay under a program run by the U.S. Department of Veterans Affairs.
For example, Lipitor, a popular cholesterol drug, the cheapest Medicare price is $785 for a years supply — 50 percent more than the VA's price of $520.
For Zocor, another cholesterol drug, the best Medicare price is $1,485 for a years supply. The same drug only costs $127 a year under the VA's plan.
Read the full Families USA report
Pollack says the VA successfully negotiates with the drug companies on price.
"Medicare could do the same thing," he says, "but Medicare is prohibited from doing that as a result of this new Medicare legislation."
"What was the logic? Or what was the idea, the rationale behind not giving the government the ability to negotiate drug prices?" asks Kroft.
Burton says it was simply that the drug companies didn't want it.
"They wanted to make as much as money as possible. And if there's negotiation, like there is in other countries around the world, then they're gonna have their profit margin reduced," he says.
Before the vote, Congress was told the program would cost a whopping $395 billion over the first 10 years. In fact, Medicare officials already knew it was going to cost a lot more.
Mar 10 Avr - 9:16 par mihou