By Donald Zuhn --
Last week, the mainstream media turned its attention to the lobbying efforts of biotechnology and pharmaceutical companies. The impetus for this increased coverage was a report on lobbying issued by the Center for Public Integrity (CPI).
The CPI, which describes itself as a nonprofit, non-partisan, and non-advocacy organization dedicated to producing original, responsible investigative journalism on issues of public concern, concluded that "Washington's largest lobby, the pharmaceutical industry, racked up another banner year on Capitol Hill in 2007, backed by a record $168 million lobbying effort." According to the CPI report, this represented a 32% increase from the industry's lobbying expenditures in 2006. The report also noted that more than 90% of the $168 million total came from 40 companies and three trade groups – the Pharmaceutical Research and Manufacturers of America (PhRMA), the Biotechnology Industry Organization (BIO), and the Advanced Medical Technology Association.
As for the cause of the increase in lobbying spending, the report pointed to "a busy legislative calendar dominated by issues critical to the industry" (e.g., the House passed a patent reform bill, the Senate patent reform bill made it onto the calendar, a Senate follow-on biologics bill passed out of committee, and two House follow-on biologics bills were proposed). In addition, the report noted that:
The spending binge last year may have also been fueled by the previous November's Democratic takeover of Congress. After the Democratic sweep of the House of Representatives, several long-standing critics of the industry, such as Representative Henry Waxman of California, assumed leadership roles of powerful committees.
A list of the top twenty lobbying spenders in the industry (see below), as assembled by the CPI, placed PhRMA in the top spot with $22.7 million in spending. The top spender among companies was Amgen Inc. with $16.3 million in spending. Pfizer Inc. also topped $10 million mark with $13.8 million in spending.
So far this year, PhRMA again leads the industry with $3.61 million spent on lobbying during the first quarter of 2008. According to the CPI, this places PhRMA 11th amongst all organizations in terms of lobbying expenditures. The CPI also reported that the pharmaceuticals and health care products industry exceeded all others in lobbying spending, with $52.8 million in the first quarter of 2008 (the insurance industry was a distant second with $40.53 million in lobbying spending). It should be noted, however, that the CPI did not indicate the portion of lobbying spending that was attributable solely to pharmaceutical companies and organizations.
With respect to the follow-on biologics bills being discussed in both the House and Senate, a BioWorld report observed that pharmaceutical and biotech lobbying efforts have been aimed at the ongoing battle over the number of years of data exclusivity. BioWorld indicated that innovator (or branded) drugmakers favor at least 12 years of data exclusivity, while the generic drug industry is pushing for only five.
For additional information regarding the CPI report, please see:
• Baltimore Business Journal
• BioWorld
• The Business Review
• FiercePharma
• IndyStar.com
• PharmaTimes (requires registration for free access)
• TechJournal South
• Washington Business Journal
These numbers are very interesting. Would it be possible to provide them in some context, i.e., how does lobbying expenditure by companies in lifesciences compare with lobbying expenditures by companies in high-tech, oil, automotive, defense, etc.
Posted by: Michael Samardzija | July 03, 2008 at 09:44 AM
Michael:
According to CPI, lifesciences lobbying (when coupled with healthcare products) was at the top of the list for the first quarter of 2008, and the other industries you listed were no higher than third. However, it is quite likely that healthcare products companies contributed a significant portion of the $52.8 million in lobbying spending.
Nevertheless, I will hunt around online and see if I can get some numbers for the IT organizations that have been advocating for patent reform and rules changes at the PTO. Thanks for the suggestion and for reading Patent Docs.
Don
Posted by: Donald Zuhn | July 03, 2008 at 10:14 AM