July 19, 2002

Brand-Name Drug Industry Overwhelms Generic in Campaign Contributions and Lobbying Spending

Debate Over Quicker Access to Generic Drugs Showcases the Money
and Influence of the Brand-Name Drug Industry

WASHINGTON, D.C. – As the U.S. Senate considers legislation opposed by the brand-name drug industry to provide consumers with faster access to cheaper generic drugs, a new Public Citizen study shows how the brand-name prescription drug industry has outspent the much smaller generic drug industry by a 40-to-1 margin on campaign contributions and lobbying.

Public Citizen’s analysis of campaign contributions and lobbying expenditures from the past three election cycles shows how the brand-name drug industry is overpowering the generic drug industry when it comes to currying favor with members of Congress. In its attempts to influence Congress, the brand-name industry has spent more than $423 million on lobbying and campaign contributions during the past three election cycles, while the generic drug industry has spent about $10 million, or 2 percent of what the brand-name industry spent.

Each side has much at stake as the Senate debates the Greater Access to Affordable Pharmaceuticals (GAAP) Act, which closes loopholes that allow brand-name drug companies to keep generic drugs off the market. The Senate is debating this bill for two weeks and is also considering amendments to the bill that would add prescription drug coverage for Medicare beneficiaries.

"The lopsided spending is staggering," said Frank Clemente, director of Public Citizen’s Congress Watch. "On every front – lobbying, campaign contributions, advertising – the brand-name drug industry overwhelms the generic drug industry, as well as consumers and seniors groups. With this firepower one is left to simply hope that senators will have the courage to vote with their constituents and not with the drug lobbyists."

Findings from the study include:

• Generic drug companies and their trade groups have been overwhelmed on the lobbying front for the past five years and spent less than 2 percent of what the brand-name companies shelled out during that time. From 1997 to 2001, brand-name companies and their trade groups spent $388.8 million on lobbying compared to generic companies’ $6.8 million.

• In 2001 (the most recent year for which lobby disclosure reports are available), brand-name companies and their trade associations accounted for 97 percent of all pharmaceutical lobbying spending ($75.5 million out of a $78 million total). Brand-name companies also employed nine lobbyists for every one employed by generic companies.

• The brand-name companies’ trade group, Pharmaceutical Research and Manufacturers of America (PhRMA), spent more than $11.2 million on lobbying in 2001 while the Generic Pharmaceutical Association (GPhA) spent less than half a million. In 2001, PhRMA spent more on lobbying and hired more lobbyists (82) than any drug company or pharmaceutical trade group.

• From 1997 to 2002, brand-name companies and their trade group contributed $34.5 million to federal candidates and parties while generic companies contributed $3.4 million.

• In terms of "soft money" – the unlimited corporate and individual donations to the national political parties – brand-name companies and their trade group have given $23.2 million since 1997 while generic drug companies and their trade group have contributed $3.1 million in that time.

• Drug companies also contribute heavily to soft money "527 political groups," which are incorporated to influence elections. Again, brand-name companies dominate this type of giving. Since July 2000 (when disclosure was first required), brand-name drug companies and their trade group contributed $914,947 to the largest 527 groups controlled by politicians and interest groups, while generic companies have given $65,000.

Click here to view a copy of Public Citizen’s analysis.

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