Now everything’s a little upside down, as a matter of fact the wheels have stopped,
What’s good is bad, what’s bad is good, you’ll find out when you reach the top
You’re on the bottom. –Bob Dylan, “Idiot Wind”
Something is wrong with this picture: pharmaceutical giant Pfizer made nearly $15 billion last year. It recently gave a $180 million payout to former CEO Hank McKinnell. But in the last two months the company has announced it will lay off 10,000 workers in manufacturing, research, and sales.
“Incremental change is not enough,” new CEO Jeffrey Kindler told the New York Times. “Fundamental change is imperative, and it must happen now.”
And so the Brooklyn plant where Pfizer was born will be closed–600 jobs gone. Research sites in Michigan will be closed–2,400 jobs gone. Twenty percent of American sales positions–2,200 jobs. But if I were a betting woman–and I am – I’d bet “fundamental change” won’t touch the lobbying operation which is dedicated to preventing fundamental change to the untenable way we do health care in America.
According to the Center for Responsive Politics, in 2005 there were 2,326 registered pharmaceutical lobbyists. That amounts to 4.3 lobbyists for every member of Congress, and the drug companies spent $146,783,853 on their efforts. And the Center for Public Integrity reports that between 1998-2005 the industry spent over $675 million on federal lobbying with the top twenty corporations and trade groups accounting for 70 percent of that spending.
Throw in another $133 million in federal and state campaign contributions during that time period (nearly 69 percent went to Republicans) and some key jobs offered to members and their staffs, and it’s easy to see how Big Pharma gets such a stellar return on its lobbying investment (i.e. tens of billions of dollars in additional profits; a ban on the reimportation of cheaper drugs from Canada; and barring Medicare from negotiating bulk drug prices for seniors.) This is great news for them, and god-awful news for the rest of us who’d like to see a sane drug policy… and the Pfizer workers in Brooklyn, Michigan, and Omaha who might like a stake in the wealth they helped to create rather than becoming just another statistic in another round of brutal layoffs.
Here’s some more upside-down thinking in an industry supposedly devoted to our health and well–being, as well as the bottom line: according to the Center for Public Integrity, the industry annually spends nearly twice as much on marketing as it does on research and development. In 2004, for example, eleven major companies reported spending close to $100 billion on marketing and $50 billion on R&D (Pfizer spent nearly $17 billion on advertising and under $8 billion on R&D). Meanwhile, the US government (taxpayers) supports R&D more than any other western industrialized government through tax breaks and subsidies. But drug prices here remain higher than any where else in the world. Go figure.
States have begun to push back on the skyrocketing drug prices and sweetheart deals for Big Pharma, with legislative proposals that include negotiating for bulk purchasing prices, mandating rebates for residents who don’t have prescription drug coverage, and promoting use of generics. Maybe that explains why the industry is amping up its state lobbying efforts. The Center for Public Integrity reports $44 million in spending on lobbying state governments in 2003 and 2004, as well as $8 million in campaign contributions during that time. (Because some states have minimal disclosure requirements the actual figures might be significantly higher.)
And the state lobbying effort is working. “We are being backed up and squashed by the pharmaceutical industry money,” said Massachusetts state Senator Mark Montigny, who chaired the National Legislative Association on Prescription Drug Prices in 2005. “They have killed lots and lots and lots of legislation in Massachusetts and across the country.”
Connecticut state Senator Edith Prague added, “They kill everything when it comes to the bottom line…. We can’t get anything done because of [lobbying by] Pfizer, Squibb and Bayer.”
As Big Pharma continues to reap huge profits, pay lobbyists lavishly, and discard workers who have helped it reach the top, it’s clear the health care business has hit bottom when it comes to striking a balance between concern for the bottom line and concern for human health and well being. That’s one of the reasons why over 75 percent of Americans want universal coverage and an army of lobbyists is primed to preserve the status quo.