Rx DRUG COSTS: Drug Firms in a Last-Minute Spending Blitz
In the "feverish final stages" of the presidential race, drug companies "are pouring money into Republican and Democratic parties' coffers at an accelerated rate," in an attempt to "fend off campaign proposals that could batter their bottom lines," according to the Los Angeles Times. Recent pharmaceutical company contributions have been "notable," the Times reports, pointing out that between July and September, companies "increased their already sizable campaign contributions by a whopping 73%" -- bringing total pharmaceutical company contributions to both parties to $11.6 million. Larry Makinson, director of the Center for Responsive Politics, a Washington, D.C.-based group that analyzes fund-raising data, said, "That's quite an amazing increase. There's nothing like being on the ropes to encourage you to dip deeply into your pockets." Of the $11.6 million total, $9 million has gone to the GOP. Drug companies account for two of the top five corporate and organizational GOP donors and six of the top 20 GOP donors. As for the Democrats, "there is not a single pharmaceutical firm" in the top 20 donors, the Times reports. For example, through September, Pfizer Inc. has donated $1.24 million to three federal Republican party committees, but only $160,000 to Democrats. While most drug companies are reluctant to comment "on the motivation for their renewed generosity or their preference for one candidate's prescription drug plan," the Times reports that it is apparent drug companies "fear" Vice President Al Gore's Medicare prescription drug plan "could lead to price controls." Gore's plan would provide a drug benefit directly under Medicare, while Texas Gov. George W. Bush's (R) plan would rely on an "array of insurers and HMOs" to offer prescription drug coverage, allowing drug companies to "retain much control over the prices." Kaiser Family Foundation analyst Larry Levitt said, "The drug companies have made no secret of the fact that they much prefer the Bush and Republican plans for providing a prescription drug benefit plan for seniors. [They're very] worried about the idea of Medicare directly purchasing prescription drugs." Pfizer spokesperson Andy McCormick said, "Our level of contributions reflects the importance of this election to our company and to our industry" (Shogren, Los Angeles Times, 10/27).
Tactic Is Working
Pharmaceutical company spending appears to have hit its intended mark, as the Washington Post reports that through a "massive advertising blitz from business groups, Republicans have managed to erode some of the Democrats' political advantage on the issue of prescription drugs for seniors." The pharmaceutical company-backed group Citizens for Better Medicare has spent $50 million on advertising in support of House and Senate Republicans' position on a Medicare prescription drug benefit, the Post reports. As evidence of the campaign's success, the Post reports that in "a few key races, Republicans have successfully used the issue to skewer the Democrats as big government spenders." Furthermore, although three months ago Bush "had no plan to provide" a Medicare prescription drug benefit and "was badly trailing" Gore on the issue, he has since made up lost ground. According to a July Washington Post/KFF/Harvard University poll, Gore had an advantage over Bush on the issue 49% to 38%, but three months later, Bush had caught up, as 43% of potential voters preferred his plan, compared to 45% who favored Gore's plan. While internal Democratic party surveys taken in September showed Gore's "advantage had slipped to single digits," a fall advertising campaign has given Gore a 15-point advantage on the issue, the Post reports. Public surveys indicate that voters prefer Gore's proposal, but health policy specialist Robert Blendon said that most people "don't exactly understand the nuances between the two policies," which makes it "difficult for Gore to gain an advantage" (Eilperin/Edsall, Washington Post, 10/27).
Who's Got the Better Plan?
In other prescription drug news, the Wall Street Journal examines the situation of John and Eleanor Pozza, a Pennsylvania couple who spend $4,000 per year on 14 medications. The Journal compares how the Pozzas would fare under both Gore's and Bush's Medicare prescription drug benefit plans, determining that in the "short run, because of their Social Security income level, only the Gore plan would help them -- if Congress actually agreed to pay its much heftier price in full." However, in the "longer run, the Bush plan might actually cut their costs substantially -- but only if unresolved details are worked out favorably and insurance companies participate in vigorous competition" (Murray, Wall Street Journal, 10/27).
Patents, Ads Responsible for High Costs
Finally, U.S. News & World Report examines prescription drug costs, pointing to drug companies' spending on advertising and their practice of listing drugs under multiple patents as the reasons behind high drug costs. The magazine reports that today's consumers actually pay a smaller share of prescription drug costs than they once did. Twenty years ago, consumers paid an average of 66 cents for every dollar of drug expenses, while today's consumers pay an average of only 27 cents for every dollar, with private insurance picking up a "growing share of the costs." As a result, because "consumers don't pay full price, they don't care about costs, which helps explain why spending on drugs rose 19% last year" (Sherrid, U.S. News & World Report, 10/30 issue).