Pharmaceutical Research and Manufacturers of America

Pharmaceutical Research and Manufacturers of America, also known as PhRMA, is one of the largest and most influencial lobbying organizations in Washington. Representing 48 pharmaceutical companies, PhRMA has 20 registered lobbyists on staff and has contracted with dozens of lobby and PR firms -- including Akin, Gump, Strauss, Hauer & Feld, Barbour Griffith & Rogers, DCI Group, The Dutko Group [1], Edelman and Bonner & Associates -- to promote its members' interests. PhRMA has a record of hiding its lobbying and PR activities, often by paying other organizations, such as United Seniors Association (USA) or the Consumer Alliance, to advocate industry-friendly policies.

Mission

On its website PhRMA state its "mission is winning advocacy for public policies that encourage the discovery of life-saving and life-enhancing new medicines for patients by pharmaceutical/biotechnology research companies.

"To accomplish this mission, PhRMA is dedicated to achieving in Washington, DC, the states and the world:

• "Broad patient access to safe and effective medicines through a free market, without price controls,
• "Strong intellectual property incentives, and
• "Transparent, efficient, regulation and a free flow of information to patients."[2]

Funding groups and PACs

The February 2003 issue of the AARP Bulletin reported: "Three nonprofit organizations that claim to speak for older Americans are in fact heavily bankrolled by the pharmaceutical industry, an examination of tax records by the AARP Bulletin shows. United Seniors Association, for example, got more than a third of its funds in 2001 from drug-industry sources. The big donors included Pharmaceutical Research and Manufacturers of America (PhRMA), the industry's trade association; Citizens for Better Medicare, a PhRMA-funded nonprofit group; and Pfizer Inc. Total industry contributions: at least $3.1 million."

"PhRMA Appears to Have Funneled Up to $41 Million To "Stealth PACs" to Help Elect a Drug Industry-Friendly Congress," according to a Sept. 2004 report published by stealthpacs.org.

PhRMA PR campaigns

2006: Qorvis and new medicines

In September 2006, the PR industry trade press reported that PhRMA had retained Qorvis Communications, "for a national PR campaign to educate the public about the good work done by drug companies and the important role they play in developing new medicines." [3]

"The PhRMA strategy emphasizes public and media education about the organization’s core mission and values and its advocacy for public policies that encourage the discovery of important new medicines," according to the Holmes Report. "Qorvis will employ a campaign-style approach that is intended to complement PhRMA’s new communications department, which has replaced a once-rigid structure of silos around individual issues with a flat, team-based model the group says has encouraged increased flexibility and creativity." [4]

"Since being named CEO at PhRMA more than a year ago, former Louisiana Representative Billy Tauzin and his communications team, led by Ken Johnson, have been implementing an aggressive public relations campaign in an attempt to address the industry's numerous reputation challenges, from pricing to safety to whether drugs are marketed over-aggressively," wrote the Holmes Report. [5]

2005: Aggressive PR

In May 2005, it was reported that PhRMA was launching "an aggressive new PR plan," highlighting its new CEO, former Congressman and cancer survivor Billy Tauzin. According to PhRMA senior vice-president of communications Ken Johnson (who should not be confused with the Ken Johnson who is the Southern Regional Director of the AFL-CIO), the new plan includes reorganizing media relations "almost like a beat system," with point people for "state, federal, or international outreach."

PhRMA also launched a radio series called Healthcare Now, "which Johnson likens to an ANR (audio news release) that can be played in small markets without health reporters." PhRMA is also "building an onsite studio" to allow Tauzin to do more television interviews and speaking events. Johnson said part of PhRMA's PR strategy is to make Tauzin "an evangelist for the pharmaceutical industry." [6]

2005: Pricing issues and marketing

In late March 2005, the Los Angeles Times reported that the pharmaceutical industry was facing "pressure from many states to provide cheaper prescription drugs." Washington state and Rhode Island legislators were considering how to control medical costs, and "Ohio and Maine recently have launched their own discount plans for low-income people." Yet PhRMA, along with individual drug companies, "launched its most aggressive counterattack in California," to defeat a proposed ballot initiative "even before the authors have gathered enough signatures to qualify it for the next election." PhRMA vice-president Jan Faiks said, "We take [the proposed initiative] as such a serious threat to the health and welfare of the pharmaceutical industry that we have to make a stand here," in California. "It's a very bad precedent. You're the leader in the country, and there are 26 states that allow ballot initiatives." [7]

Part of industry's concern at the proposed California initiative, authored by the Oakland nonprofit organization Health Access California, was due to its "punishing individual manufacturers that decline to lower prices voluntarily" - a level of enforcement the industry had been able to avoid in other states. Under the proposed California initiative, "drug companies that do not consent to the discounts could be shut out of a prized market: the state's huge Medi-Cal program, which annually buys $3 billion worth of drugs for the poor." [8]

PhRMA, along with the drug companies Johnson & Johnson, Pfizer, GlaxoSmithKline, Abbott Laboratories, Amgen, AstraZeneca, Eli Lilly, Novartis and Wyeth, "pledged to donate at least $10 million in California to fight proposed ballot initiatives that would mandate lower drug prices." ($8.6 million had been raised by late March 2005.) The industry hired "Sacramento's best-connected Democratic strategists ... to cut a deal with the Democrat-controlled Legislature and avert a ballot battle." Those lobbyists were former Assembly Speaker Willie Brown, former Gray Davis speechwriter Jason Kinney, former Davis campaign advisor and labor commissioner Steve Smith, and Schwarzenegger recall campaign strategist Bob White. PhRMA also negotiated with Governor Arnold Schwarzenegger, to develop an alternative "voluntary discount plan called California Rx." [9]

Perhaps most disturbingly, PhRMA threatened "retaliatory initiatives aimed at trial lawyers and unions, which are most likely to be donors to Health Access' ballot measure." The industry's "two companion ballot measures" were unmistakably "aimed at the heart of Democrats' donor base." One measure "would slash trial lawyers' contingency fees," while the other "would require public employee unions to obtain members' permission before spending their dues on political activities." PhRMA's Frank Schubert, who is managing the initiative campaigns, said, "It certainly is a signal to the unions that they're not going to engage in a one-handed attack, that the industry is going to fight for its interests and the interest of the patients that it serves." [10]

West Virginia's Pharmaceutical Cost Management Council unanimously approved "a financial disclosure form that would require pharmaceutical companies to reveal how much they spend on advertising and promotion of brand-name drugs" in the state, as well as any "gifts, grants or payments to physicians" in excess of $25. A legislative rules committee considers the form and related rule changes next, though they will likely "be challenged in court by the pharmaceutical industry." [11] An attorney with PhRMA said the proposal "is much more extreme, we think, than is authorized by statute." To back up its critique, PhRMA presented "a four-page analysis from the Washington law firm Covington and Burling." A PhRMA state lobbyist also argued that such information should be "used internally by the council ... and not be accessible, say, to attorneys doing litigation against a company." West Virginia's AARP supports the measure.

2004: Depression calculator

In June 2004, PhRMA teamed up with the U.S. Chamber of Commerce and the American Psychiatric Association "to demonstrate the cost of depression in the workplace and to show employers that treating affected workers would improve the bottom line." The three groups endorsed a "depression calculator," which allows employers to estimate the effect of untreated depression on their company's profits, through absenteeism and low productivity. The calculator also figures "how much the business would save if employees were treated."[12] The Arizona-based "health-care consulting firm" The HSM Group organized the calculator's public "introduction." At the press conference unveiling the calculator, PhRMA's senior vice president for policy, research and strategic planning, Richard Smith, said: "A depressed employee is less productive or absent for 30 to 50 days a year. ... The person's medical costs are $2,000 to $3,000 more than other employees."[13]

Self-regulation of drug ads

In May 2005, former member of Congress Billy Tauzin, then PhRMA's head lobbyist, told the New York Times that "drug companies [are] trying to develop a voluntary code of conduct for the advertising of prescription medicines on television and in print." Tauzin said "a good strong code" would likely be issued in June or July 2005. However, "one purpose" for the code "is to fend off more stringent federal regulation," wrote the New York Times. [14] "Better to self-regulate than to have someone else tell you how to conduct your business," one pharmaceutical marketing chief told Advertising Age.

PhRMA's guidelines for direct-to-consumer (DTC) drug ads were being developed as mounting evidence suggests "drug sales don't necessarily rise or fall as TV ads are boosted or reduced," because, unlike other products, "a consumer can't buy a prescription drug without a doctor's signature," reported the Wall Street Journal. In addition, "the safety controversy over highly advertised painkillers Vioxx from Merck & Co. and Celebrex from Pfizer" increased scrutiny of drug ads. [15]

PhRMA's Board of Directors approved the "PhRMA Guiding Principles: Direct to Consumer Advertisements About Prescription Medicines" (PDF file) on July 29, 2005. The policy was officially announced by Tauzin on August 2, 2005, at the American Legislative Exchange Council's 32nd Annual Meeting. PhRMA touted the guidelines, slated to go into effect in January 2006, as a way to educate patients. Along with the guidelines, PhRMA created an "Office of Accountability," to receive "comments from the general public and health care professionals regarding direct-to-consumer advertising done by companies that adopt these principles." [16]

Consumer groups blasted PhRMA's guidelines. Commercial Alert's Gary Ruskin called them "utterly lacking in principle. They are a public relations exercise that cloaks doing nothing in a stream of verbiage that sounds like doing something. They will cause no inconvenience for the drug industry and no real change of behavior. Their aim is to shield the profits of the drug companies, not the health of Americans. Nor will they stop the fleecing of taxpayers, through excess demand for prescription drugs. ... The new PhRMA policy is even soft on erectile dysfunction ads. Parents shouldn't have to shield their children from raunchy drug ads." [17] Consumers Union called the PhRMA guidelines "a placebo that will have little impact on informing consumers about the real effectiveness of drugs or their possible safety risks." [18]

In January 2006, just after the PhRMA guidelines went into effect, Advertising Age reported, "Drug makers appear to be abiding by the 15-point code of conduct with very few exceptions. One exception: None of the ads [the reporter viewed] conformed to Guideline No. 15: Companies are encouraged to include information in all DTC advertising, where feasible, about help for the uninsured and underinsured. Also, some of the 15-second spots were not able to adhere to Guideline No. 4: DTC TV and print advertising of prescription drugs should clearly indicate that the medicine is a prescription drug" (Rich Thomaselli, "Big Pharma Keeps Its New Year's Resolution," Advertising Age, January 9, 2006).

FDA funding fees

U.S. government regulating agencies don't negotiate their budgets with industries they oversee, with the exception of the Food and Drug Administration (FDA). In the early 1990s, the pharmaceutical industry began paying the FDA millions of dollars in user fees in order to speed up the drug approval process. These fees "now fund more than half the agency's critical drug-review process." Industry groups and the FDA renegotiate the fees and how they're used every five years, giving drug makers "considerable input into which programs receive funding." In 2006 the FDA negotiated an agreement with the Pharmaceutical Research and Manufacturers of America and Biotechnology Industry Organization. Industry groups pushed for even faster decisions on labeling and other "conditions" of new drugs and the FDA negotiated more funding to monitor drug safety following approval.

International activities

PhRMA lobbying activities have extended outside of the United States. "America's big drug companies are intensifying their lobbying efforts to 'change the Canadian health-care system' and eliminate subsidized prescription drug prices enjoyed by Canadians," CanWest News Service reported on June 9, 2003. "A prescription drug industry spokesman in Washington confirmed to CanWest News Service that information contained in confidential industry documents is accurate and that $1 million US is being added to the already heavily funded drug lobby against the Canadian system." PhRMA was the leading drug industry trade group behind the increased lobbying and PR campaign. PhRMA was also independently spending $450,000 to target the booming Canadian Internet pharmacy industry, which has been providing Americans with prescription drugs at lower prices than in the United States.

Personnel

• Christopher Badgley: Vice President, State Government Affairs
• Chris Singer: Chief Operating Officer and Executive Vice President
• Edward Belkin: Vice President, Communications
• Alan Gilbert: Senior Vice President, Federal Affairs
• Mark Grayson: Deputy Vice President, Communications and Public Affairs
• Billy Tauzin: President and Chief Executive Officer
• Anne Holmes: PAC Contact and Senior Manager, Federal Affairs
• William L. Lucas: Associate Vice President, State Government Affairs
• Kurt Malmgren: Senior Vice President, Government Affairs and Alliance Development
• Lori Reilly: Vice President, Policy
• Richard "Rick" Smith: Senior Vice President, Policy and Strategic Communications
• Derrick White: Associate Director, Federal Affairs

PHRMA's registered lobbyists

According to a discloure form for the first six months of 2007, filed with the U.S. Senate by PHRMA, the group's registered lobbyists were :

• Billy Tauzin
• Mimi Kneuer, Tauzin's former chief of staff when he was in the U.S. House of Representatives;
• Amy Efantis, former legislative director for Rep. Artur Davis, Democrat-Alabama;
• Valerie Jewett, former legislative director for Rep. Rodney Frelinghuysen, Republican -New Jersey;
• Matt Sulkala, who was senior legislative assistant to Rep. Allen Boyd, Democrat - Floridaa.

PhRMA spent $10.7 million in the first six months of 2007 lobbying the U.S. government. In the preceding six-month period, PhRMA spent $8.8 million. Associated Press reports that in PhRMA'S latest lobbying report, required under the Lobbying Disclosure Act of 1995, the group states that it had lobbied Congress, the U.S. Food and Drug Administration and the Department of Health and Human Services and other agencies on "issues related to Medicare, patent reform, international trade and drug fees, importation and safety". :

Former staff

• Former Chair, Raymond V. Gilmartin

PR firms employed

• APCO Worldwide [19]
• Edelman [20]
• Qorvis Communications [21]

Contact

Pharmaceutical Research and Manufacturers of America
950 F Street N.W.
Washington, DC 20004
Telephone: 202-835-3400
Fax: 202-835-3414
Website: phrma.org

Articles and resources

Related SourceWatch articles

• Alliance for Energy and Economic Growth
• Charles A. Heimbold, Jr. - Former Chairman of Board
• Direct-to-consumer advertising
• U.S. Food and Drug Administration

External articles

• Beth Herskovits, "PhRMA comms department reorganizes, launches new campaign," PR Week (sub. req'd.), May 26, 2005.
• Beth Herskovits, "PhRMA picks Edelman for state outreach effort", PR Week, May 5, 2005. (Sub req'd.)
• Jordan Rau, "Industry Aims to Defeat Discount Drug Initiatives," Los Angeles Times, March 28, 2005.
• Beth Herskovits, "PhRMA reviewing its PR agencies", PR Week, February 3, 2005. (Sub req'd).
• M. Asif Ismail, "PhRMA's Envoys: Former ambassador lobbies Canadians on drug imports to U.S", Center for Public Integrity, January 18, 2005.
• Robert Pear, "Ex-Rep. Tauzin to be lobbyist for drug firms: High-paid job for chief writer of Medicare change raises questions", Seattle Post Intelligencer, December 16, 2004. (This is a syndicated New York Times article).
• Judy Sarasohn, "Tauzin to Head Drug Trade Group", Washington Post, December 16, 2004.
• Public Citizen, "Rep. Billy Tauzin Demonstrates That Washington's “Revolving Door” Is Spinning Out of Control: Public Citizen Calls for a Change in Ethics and Lobbying Rules", Media Release, December 15, 2004.
• Klaus Marre, "PhRMA, Chamber team up to reduce worker depression," The Hill, June 8, 2004.
• Nicholas Confessore, "Meet the Press: How James Glassman reinvented journalism--as lobbying", Washington Monthly, December 2003.
• Sheryl Gay Stolberg, "Drug Lobby Pushed Letter By Senators On Medicare", New York Times, July 30, 2003, p. A15.
• Jim VandeHei and Juliet Eilperin, "Drug Firms Gain Church Group's Aid Claim About Import Measure Stirs Anger", Washington Post, July 23, 2003, p. A1.
• Tim Craig, "Community Leaders Decry Lobby Firm's Fax", Baltimore Sun, March 9, 2002.
• Julian Borger, "USA: The Pharmaceutical Industry Stalks the Corridors of Power", Guardian Unlimited, February 13, 2001.
• Peter H. Stone, "PhRMA Fights Back", National Journal, July 21, 2001.
• M. Asif Ismail, "Drug Lobby Second to None: How the pharmaceutical industry gets its way in Washington", Center for Public Integrity, July 7, 2005.
• M. Asif Ismail, "FDA: A Shell of its Former Self: The Food and Drug Administration lacks the power to regulate pharmaceuticals and keep you safe", Center for Public Integrity, July 7, 2005.
• Alexander Cohen, "Surrogates for Their Agenda: How the drug industry uses non-profits to push its interests", Center for Public Integrity, July 7, 2005.
• Victoria Kreha, "Checkbook Politics: Over the last seven years, the pharmaceutical industry has given $150 million in campaign contributions", Center for Public Integrity, July 7, 2005.
• Consumers Union, "Drug Industry’s Voluntary DTC Plan is Placebo; Real Reform Needed to Ensure Accurate, Informative Drug Advertising", Media Release, July 21, 2005.
• Commercial Alert, "PhRMA’s New Ad Policy is "Craven Self-Preservation," Says Commercial Alert", Media Release, August 2nd, 2005.
• Margaret Webb Pressler, "Drug Firms Seek Ad Remedy: Industry Hopes Self-Policing Cures Marketing Complaints", Washington Post, August 3, 2005; Page D02.
• Rich Thomaselli, "PR Seems To Be the Rx to Get Around DTC Rules: Firms Confirm Pharma Is Seeking Ways To Live with (But Not Skirt) Guidelines," Advertising Age, September 26, 2005, p. 6 (not available online).
• Lloyd Grove, "Drug business prescribes a novel cure for its ills, New York Daily News, October 18, 2005.
• Beth Herskovits, "PhRMA denies 'Daily News' report about possible drug-import book", PR Week, October 24, 2005. (Sub req'd).
• Phil Kabler, "Drug companies asked to reveal spending on ads", Charleston Gazette, November 11, 2005.
• Rich Thomaselli, "Big Pharma Keeps Its New Year's Resolution," Advertising Age, January 9, 2006, page 8.
• Anna Wilde Mathews, "Drug Firms Use Financial Clout To Push Industry Agenda at FDA," Wall Street Journal (sub req'd), September 1, 2006.
• Keith O'Brien, "PhRMA enlists Qorvis for campaign", PR Week, September 15, 2006. (Sub req'd).
• "PhRMA Taps Qorvis," O'Dwyer's PR Daily (sub req'd), September 15, 2006.
• "PhRMA Selects Qorvis for Industry Image Campaign," Holmes Report, September 17, 2006.
• Judith Siers-Poisson, The Politics and PR of Cervical Cancer, a four part series, PRWatch.org, July, 2007.
• Julie M. Donohue, Ph.D., Marisa Cevasco, B.A., and Meredith B. Rosenthal, Ph.D., "A Decade of Direct-to-Consumer Advertising of Prescription Drugs," New England Journal of Medicine, Volume 357:673-681, Number 7, August 16, 2007.
• "Drug Trade Group Spent $10.7M Lobbying", Associated Press, August 17, 2007.
• Matthew Perrone, "FDA to Study Images' Impact in Drug Ads," Associated Press, August 21, 2007.
• T.W. Farnam, Alicia Mundy and Brad Haynes, "Drug Industry Adapts to Democrats' Mounting Clout," Wall Street Journal (sub req'd), October 24, 2008.
• Ceci Connolly, "With More Oversight on the Horizon, Drugmakers Work to Polish Image", Washington Post, January 8, 2009; Page A01.
• Jeffrey Young, "PhRMA signals shift with Democratic promotions," The Hill, January 22, 2009.