June 30, 1999
Aggressive Lobbying Behind Claritin Patent Extension Bill
That Could Cost Consumers $1.6 – $3.2 Billion
Public Citizen Report Tallies Growth in Schering-Plough’s Lobbying
Public Citizen issued a report today detailing Schering-Plough’s escalating lobbying expenditures as the company mounts an aggressive campaign in Congress for H.R. 1598/S. 1172 to gain a special-interest patent extension for its allergy drug Claritin. The patent extension could cost consumers $1.6 billion – $3.2 billion more over a three-year period.
“The high cost of prescription drugs is becoming a public health crisis in the United States,” Public Citizen President Joan Claybrook said. “The public policy question that should be before Congress is how to make medicines more — rather than less — affordable. Consumers are already paying through the nose for brand name drugs like Claritin. Congress should be looking for ways to bring costs down, not rewarding pharmaceutical industry lobbyists by extending monopoly price protection.”
The report shows that between 1996 and 1998, Schering-Plough’s lobbying expenditures more than doubled, from $1.9 million in 1996 to $4.3 million in 1998. The number of outside lobbying firms retained to lobby on the patent extension issue also doubled, from five to 10. While Schering-Plough ranks only ninth in sales among pharmaceutical companies, in 1998 the company was fourth highest in lobbying expenditures, moving up from its seventh-place rank in 1997.
In addition to such powerful registered lobbyists as former Senate Majority Leader Howard Baker (R-Tenn.), former Sen. Dennis DeConcini (D-Ariz.), and Democratic power brokers Peter Knight and Richard Ben-Veniste, Schering-Plough has also benefited from the support of C. Everett Koop, M.D. On the Hill, Koop has actively promoted the Claritin patent extension bill by writing an April 29, 1999, (the day after the bill was introduced) letter to all representatives in support H.R. 1598 and by appearing at a June 10, 1999, forum in the Capitol organized to showcase H.R. 1598 and the proposed Claritin patent extension.
Only through a June 20, 1999 story in New Jersey?s The Star-Ledger did it become widely known in Washington that Schering-Plough had made a $1 million donation to the Koop Foundation, and that the company advertises on Koop’s website.
“A $1 million grant from a drug company followed by this kind of lobbying activity is a serious conflict of interest,” said Sidney M. Wolfe, M.D., director of Public Citizen’s Health Research Group. “It looks like America has a new ?Company Doctor.?”
“This bill is moving because of Schering-Plough’s aggressive lobbying, not because of its merits,” Claybrook said. Noting that the House Judiciary Subcommittee on Courts and Intellectual Property had scheduled a July 1, 1999 hearing on H.R. 1598, she questioned why this special interest retroactive legislation deserved Congress’ attention.
The Claritin patent extension would cost consumers $1.6 billion to $3.2 billion over three years. Claritin’s worldwide sales were $2.2 billion in 1998, accounting for 28 percent of Schering-Plough’s total. The company had $1.8 billion in net income on sales, a 22 percent profit rate. According to Public Citizen’s estimate, Schering-Plough has already earned $1.3 billion in profits on Claritin, and is expected to earn another $2.2 billion before the drug’s patent expires in 2002. New product formulations and licensing agreements extend some patent protection for the #1 advertised drug in America to 2014.