Schering-Plough Plows Ahead with
High-Priced Lobbying Campaign
for a Claritin Patent
Extension
Schering-Plough's high-priced campaign to get Congress to award a patent extension to its best-selling allergy drug Claritin plowed $2.25 million into lobbying in the first half of 1999, a 29% increase over the $1.75 million the firm spent in the same period last year.1
Since 1996, the first year that a Claritin patent extension was attempted, Schering-Plough has spent more than $11 million total on lobbying Congress and the Administration. (See Public Citizen's previous report, "Can Schering-Plough's Aggressive Lobbying Buy a Claritin Patent Extension?" at http://www.citizen.org/congress/drugs/factshts/patentextension/splobby.htm for a year-to-year breakdown and list of lobbyists.)
High Stakes for Consumers and Taxpayers - $11 Billion
The stakes are high for consumers, workers, health plans and taxpayers, as well as for Schering-Plough shareholders. Claritin's patent is due to expire in July 2002. If Congress approves H.R. 1598/S. 1172, which would allow a three-year patent extension, a staggering $3.5 billion savings that would have resulted from generic competition during the first three years the drug is off patent will be shifted directly from consumer and taxpayer pocketbooks into Schering-Plough's corporate coffers. The ten year loss to consumers is estimated to be more than $11 billion.2
High Priced Democratic and Republican Lobbyists Join Claritin's Team
A number of well-connected players signed on to lobby for Schering-Plough in 1999 coming from both sides of the political spectrum. Early in the year the firm signed up several key Democrats with strong ties to both the Clinton Administration and liberal leaders in Congress, especially on the Judiciary Committees. In June, as the Appropriations bills came into play on the Hill, a Republican consulting firm linked to Senate Majority Leader Trent Lott (R-Miss.) and Appropriations Committee member Richard Shelby (R-Ala.) joined the team.
Richard Ben-Veniste, currently a partner in the law firm of Weil, Gotschal & Manges, LLP, signed on to lobby the House and the Senate on H.R. 1598/S. 1172 effective 2-1-99. The former Assistant Special Prosecutor and Chief of the Watergate Task Force and Democratic Minority Counsel for the Senate Whitewater hearings netted his firm $100,000 over the five month period February - June 1999.
Linda Daschle of Baker, Donelson, Bearman & Caldwell, P.C., is a newly registered lobbyist on H.R. 1598 and S. 1172, joining such power players as former Republican Senate Majority Leader Howard Baker on the Claritin team. The firm received $220,000 for the first six months of 1999 for lobbying the House and Senate. Daschle, wife of Senate Minority Leader Tom Daschle, "does not lobby U.S. Department of Transportation by law and voluntarily will not lobby U.S. Senate" [7-30-99 Lobbying Report, p. 2.]
Vic Fazio, former California Democratic Representative and Chair of the House Democratic Caucus, partner in the firm of Clark & Weinstock, has also newly registered to lobby the White House on H.R. 1598 and S. 1172 [while the firm lobbies the House, Senate and White House; Fazio's form is noted "Executive Branch only"]. The firm reported $160,000 for the first six months of 1999, double its last half-year 1998 amount of $80,000.
Hall, Green & Associates bring strong ties to the Senate Republican Leadership and the Appropriations process to the Claritin team, registering effective June 1, 1999 to lobby the House and Senate on H.R. 1598 and S. 1172. They reported $20,000 for the month of June alone. According to biographies provided by the firm, John Green was formerly the Executive Director of the New Republican Majority Fund, the political action committee of U.S. Senate Majority Leader Trent Lott as well as Deputy Chief of Staff for Senator Lott. Stewart Hall was Senator Richard Shelby's Legislative Director from 1992 to 1996, acting as the Senator's liaison to the Senate Appropriations Committee.
White House, Patent and Trademark Office also Targeted
In addition to Congress, Schering-Plough also needs the Administration to gain its special patent extension for Claritin. Not surprisingly, several key firms report lobbying the Patent and Trademark Office - the agency to which H.R. 1598/S. 1172 would give authority to grant the extension - and the White House, which would have to agree to sign the legislation (or not oppose an appropriations rider).
Two firms registered to lobby for the Claritin patent extension list the "White House" as well as Congress on their disclosure firms:
Clark & Weinstock - White House. The firm's new partner, former Representative Vic Fazio (D-CA), lists the Executive Branch as his sole lobbying target. The firm was paid $160,000 for the first six months of 1999.
Wunder, Knight, Thelen, Forscey & DeVierno - White House. Partner Peter Knight was a top fundraiser for Clinton-Gore and campaign manager for the 1996 Clinton-Gore campaign. The firm reported $100,000 for the first six months of 1999.
Three firms reported lobbying the Patent and Trademark Office:
Schering-Plough Legislative Resources L.L.C. - Robert Lively, Schering-Plough Vice President for Congressional Relations, reported lobbying the Department of Commerce, Patent & Trademarks Office, on H.R. 1598/S. 1172. He reported $333,000 for the first half of 1999.
Swidler, Berlin, Shereff, Friedman - Also listed the Patent and Trademark Office on their disclosure forms. The firm received $120,000 during the first six months of 1999.
Parry & Romani Associates, Inc. - The firm's partners include Thomas Parry, former Chief Counsel to Senator Orrin Hatch (R-UT), Chairman of the Senate Judiciary Committee which has jurisdiction over S. 1172, and former Senator Dennis DeConcini (D-AZ). It reported $60,000 for lobbying the Patent and Trademark Office as well as the Senate and House in the first half of 1999.
H.R. 1598/S. 1172 allow three year patent extensions for Claritin and six other "pipeline" drugs [so-called because they were in the FDA approval process at the time the Waxman-Hatch Act was passed in 1984] by creating a slam-dunk review process at the Patent and Trademark Office that will all but inevitably result in the extension being granted. Claritin accounts for approximately two-thirds of the bills' total estimated $11 billion cost to consumers, workers, health plans and taxpayers.
The real impact of the legislation on U.S. healthcare costs could be much worse. Waiting in the wings to see how the Claritin special patent extension bills do are the makers of 20 other blockbuster drugs with combined annual sales of almost $20 billion and patents that expire in the next five years. If H.R. 1598/S. 1172 become law, Congress would likely be bombarded by their manufacturers to "tweak" the new patent extension process to fit each of these drugs special circumstances. And if Congress doesn't say no to Claritin's special pleading, how will it turn down Prilosec (ulcers), Prozac (depression), and Vasotec (hypertension)?
September 30, 1999
For more information contact Maura Kealey, Deputy Director of Congress Watch, at (202) 454-5116.For a more detailed critique of the legislation, see http://www.citizen.org/congress/drugs/factshts/patentextension/stopclaritin.htm
Click here for a complete text of the bill,
list of co-sponsors, and current status.
NOTES
1. Schering-Plough lobbying disclosure forms filed under the 1995 Lobby Disclosure Act. These records do not provide an expenditure breakdown between lobbying on patent extension and other issues.
2. Steven Schondelmeyer, Patent Extension of Pipeline Drugs: Impact on U.S. Health Care Expenditures, PRIME Institute, University of Minnesota College of Pharmacy, July 28, 1999. Schondelmeyer puts the total cost of H.R. 1598/S. 1172 over ten years at $11 billion, with Claritin accounting for approximately two-thirds. Government programs (Medicaid, Veterans Administration, Department of Defense, Public Health Service) would bear $2.5 billion of that amount. Taxpayers' share would increase to about $5.0 billion with a Medicare drug benefit.
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