Cut-throat lobbying on Capitol Hill by a few biotech companies has backfired and in the process has angered more than a few members of Congress. Now the companies that shelled out thousands of dollars for lobbyists this year will have to do the same again next year.
The fireworks began when a few well-intentioned members of Congress decided it was time to rewrite the Orphan Drug Act of 1983. Under that law, companies that develop drugs for treating rare diseases get a seven-year monopoly on marketing rights for those drugs with no price controls. The idea was to give companies an incentive to produce drugs that otherwise have little market value.The law was enormously successful in most cases, resulting in drugs that might not have been produced without the economic incentive of a monopoly. But without competition, the companies could charge whatever they wanted. Treatment costs for some conditions rose to $30,000 a year or more. A few biotech companies soon began reaping millions of dollars.
When Congress caught on and tried to curb their profits, the drug companies slipped into high gear. They hired lobbyists who persuaded Congress to water down the legislation to the point where it was harmless to the companies' profits. The gutted bill was something the companies could live with.
But the lobbyists did their job too well. President Bush vetoed the watered-down version of the bill, and now no one is happy.
The problem began in the last session of Congress when Rep. Henry Waxman, D-Calif., and Sen. Howard Metzenbaum, D-Ohio, proposed lifting the monopoly on orphan drugs in cases where more than one company was interested in competing for Food and Drug Administration approval of the drug.
Biotech companies with profits on the line fought back with a vengeance. One company, Genentech Inc., which makes a human growth hormone that is protected as an orphan drug, hired at least 12 lobbyists on the issue.
Among them was former Florida Sen. Paula Hawkins, who was paid $95,000 by Genentech for six months of work. Many of the other biotech lobbyists were former Capitol Hill staffers or close associates of key members of Congress.
They pulled the right strings. Congress sent a toothless bill to the White House, and the biotech lobbyists went home satisfied. But Bush, who had paid little attention to the battle on the Hill, vetoed the compromise legislation.
Why the veto? Congressional sources said the ill-informed White House was convinced by the early arguments made by the biotech companies against strong revisions to the law.
But in trying to help the companies, the president inadvertantly shot down the measure acceptable to them. A representative of one biotech firm grudgingly called Bush's veto "not useful." The companies must now call back their high-priced lobbyists for another round.