Bloomberg News

Merck, Pfizer Back Lawmakers Who Oppose Company Products

May 31, 2012

The drug industry has many concerns in Washington besides contraception, including proposals to allow drugs to be imported from Canada and enabling the federal government to negotiate lower prices for Medicare recipients. Photographer: Harrison Eastwood/Getty Images

The drug industry has many concerns in Washington besides contraception, including proposals to allow drugs to be imported from Canada and enabling the federal government to negotiate lower prices for Medicare recipients. Photographer: Harrison Eastwood/Getty Images

There was plenty of debate about the new health-care law in the 2010 congressional elections while little, if any, on birth control.

Today, the drug industry’s trade group is finding that it helped elect Republican lawmakers who are seeking to limit access to contraceptives sold by its members. Even so, the drug industry is supporting their re-elections.

The Pharmaceutical Research and Manufacturers of America, which counts among its members four of the seven biggest sellers of birth control drugs and devices, gave $4.8 million in 2010 to Republican-leaning nonprofits that helped elect 23 lawmakers, all of whom later voted to limit access to birth control and reduce federal funding for it.

Those companies earned $1.7 billion selling contraceptives, potentially putting themselves in the position of hurting their own bottom lines by backing politicians looking to eliminate a revenue source for sales.

“They’re undermining their own products,” said Shelley Alpern, vice president of Boston-based Trillium Asset Management, whose holdings include Johnson & Johnson (JNJ:US), a member of Phrma that sells birth control drugs. “It’s very disturbing. At best case, it’s a matter of the left hand not knowing what the right hand is doing.”

Eliminating Federal Funding

The drug industry has many concerns in Washington besides contraception, such as working against proposals to allow drugs to be imported from Canada and enabling the federal government to negotiate lower prices for Medicare recipients. Momentum for those ideas, backed by many Democrats, stalled as the White House negotiated with industries in 2009 for support of the health-care law.

The Republican-led challenge to federal funding for contraception emerged as part of an effort to reduce federal domestic spending. In February 2011, House Republicans voted to end funding for Title X, the $317 million program that provides family-planning services, including contraceptives, to lower- income individuals.

That same legislation eliminated all federal funding for Planned Parenthood, for which contraception accounted for one- third of its patient visits in 2010, second only to testing for sexually-transmitted diseases, according to the group’s annual report.

Oral Contraceptives

The group provided oral contraceptives to 40 percent of the 2.2 million patients who sought birth control, the report said. Abortion procedures, which animate Republican opposition to Planned Parenthood, accounted for 3 percent of its services, the report stated.

Only seven House Republicans opposed the Planned Parenthood funding cut and just three voted against final passage of the measure that included the two provisions.

Senate Republicans in March tried unsuccessfully to enact legislation allowing employees to exclude birth control and other health services from plans provided to workers if they conflict with moral or religious beliefs. The measure was blocked when all but two Democrats opposed it. The proposal was a response to a rule from President Barack Obama’s administration requiring health insurers to provide contraception without charge for covered employees of religiously affiliated institutions such as hospitals and universities. Houses of worship were exempted from the rule.

Presumed Republican presidential nominee Mitt Romney has vowed to end federal funding to Planned Parenthood, while not seeking to curb a woman’s ability to use contraceptives obtained elsewhere.

American Action Network

According to Internal Revenue Service records, Phrma donated $300,000 in 2010 to the American Future Fund and $4.5 million to the American Action Network, which represented its largest contribution in at least three years. The two Republican-leaning nonprofits spent $27 million to help candidates in the 2010 election, according to the Federal Election Commission.

The trade group also donated $3.4 million in 2010 to the Democratic-leaning Citizens for Strength and Security.

A spokesman for Washington-based Phrma, Matt Bennett, said the trade association doesn’t restrict its giving to groups that it agrees with on every issue.

“We provide support to organizations who share our mission of increasing access to innovative medicines,” Bennett said. “When we work with an organization or provide support, it is done in areas of common interest.”

Ensuring Access

The drug industry is giving to ensure itself a seat at the table, not to elect candidates who favor its position on every issue, said Dan Mendelson, chief executive officer of Avalere Health LLC, a Washington research company.

“Political giving is not a precise science,” Mendelson said. “The political giving enables a voice. It does not ensure compliance with a policy position.”

For the 2012 congressional races, Phrma’s PAC has given 56 percent of its donations to re-elect Republican members -- including those who supported the funding cuts, according to the Center for Responsive Politics, a Washington-based research group that tracks campaign contributions.

In addition to Johnson & Johnson, Phrma members Pfizer Inc. (PFE:US), Bayer AG (BAYN), and Merck & Co. Inc. (MRK:US) sell birth-control products such as estrogen, IUDs or so-called morning after pills known as Plan B, according to IMS Health, a health-care information and services company in Danbury, Connecticut.

A spokesman for New York-based Pfizer, Peter O’Toole, said the company doesn’t tell Phrma how to spend its money, including which outside groups to support.

Merck Donations

Whitehouse Station, New Jersey-based Merck & Co. gave $7 million to Phrma in 2010, according to the company’s voluntary disclosures. The company’s contraceptive product NuvaRing brought in $486 million in revenue last year, according to IMS Health.

“Merck doesn’t monitor how groups spend contributions nor does it place conditions on its giving,” said Kelley Dougherty, a spokeswoman. “Merck does actively monitor independent political expenditures made by associations or other tax-exempt groups where the issue relates to pharmaceutical policy. We do not plan to condition our membership specifically on an association’s decision relative to its policy on reporting independent expenditures.”

PAC Donations

All four companies’ political action committees have also made more donations to Republican House members, including those who support eliminating federal funding for birth-control coverage and access, than Democrats in the 2012 election.

A fifth company PAC, Parsippany, New Jersey-based Watson Pharmaceuticals Inc. (WPI:US), another leading maker of contraceptives that isn’t a member of Phrma, has given almost two-thirds of its campaign dollars to House and Senate Republicans, according to the Center for Responsive Politics, a Washington-based research group.

Because Watson provides low-cost, generic contraceptives, “we’re really not involved in this debate,” said Charlie Mayr, a spokesman. “We already offer consumers a very cost-effective option.”

Of the remaining two companies counted among the top seven contraceptive-makers, Teva Pharmaceutical Industries Ltd. (TEVA) has given a majority of its 2012 PAC donations to Democrats even as its chairman hosted a fundraiser for Romney. Denise Bradley, a spokeswoman for Teva, had no comment. The other company, Warner Chilcott PLC (WCRX:US) of Dublin, Ireland, doesn’t have a PAC.

‘Very Committed’

“Does the pharmaceutical industry support open access to contraceptives? Sure,” Mendelson said. “Does the pharmaceutical industry give money to the Republican Party? Sure. The pharmaceutical industry also supports the leadership of the Democratic Party. That leadership is very committed to open access to contraception.”

Alpern said companies need to weigh in on how trade groups they support spend their money, especially when it could hurt revenues.

“When they tell us they don’t always agree with everything the trade association does, more and more it’s sounding disingenuous,” she said. “Companies should be looking at their trade associations. With all the scrutiny of companies’ political expenditures, it’s a way of doing things that isn’t going to wash in the future.”

To contact the reporter on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net.

To contact the editor responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net.


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Companies Mentioned

  • JNJ
    (Johnson & Johnson)
    • $102.19 USD
    • -0.28
    • -0.27%
  • PFE
    (Pfizer Inc)
    • $30.39 USD
    • -0.10
    • -0.33%
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