A new report from the Center for Public Integrity, “Drugmakers’ Dime Funds Congressional Travel,” finds that members of Congress and their aides accepted more than $600,000 in free travel from pharmaceutical interests during a 5½-year period (from January 2000 through June 2005) in which drug company profits climbed, in part due to federal legislation favorable to the industry.
This has the potential for peddling influence on lawmakers. Nothing is more demonstrative of this that new revisions to the Medicare program. Once lawmakers added the prescription drug benefit for senior citizens to Medicare, the pharmaceutical industry found a reliable consumer for its products. Meanwhile, a provision in the law — for which the pharmaceutical industry lobbied heavily — prevents the federal government from negotiating price discounts with drug companies.
That means Pfizer, Inc. (NYSE: PFE) and Nektar (NASDAQ: NKTR) stand to benefit enormously if Medicare recipients have their endocrinologists prescribe Exubera inhaled insulin for treatment of their Type 2 diabetes.
Some members of Congress show a conflict-of-interest by having a personal stake in the outcome of certain drug manufacturers.
For example, Sen. Orrin Hatch, R-Utah, and his aides took seven trips, totaling $12,000, sponsored by Pfizer, Inc. (NYSE: PFE) and GlaxoSmithKline plc (NYSE: GSK), as well as two industry trade groups, the California Healthcare Institute and the Healthcare Leadership Council. As of May 15, when Hatch filed his 2005 financial disclosure form, the senator held at least $18,000 worth of stock in Pfizer and Novartis, the Swiss-based manufacturer of Ritalin, the attention-deficit drug.
Hatch co-sponsored the Medicare bill in the Senate while holding at least $3,000 worth of shares in Pfizer and Novartis, according to his 2003 financial disclosure forms.
For 2006, Hatch is fourth on the list of Congressmen receiving funds from the pharmaceutical industry
The Senate and House ethics manuals state that having personal assets or holdings, such as stocks in industries that also have significant legislation pending, is not automatically considered a conflict of interest. The manuals state that legislation spans a wide range of business and economic endeavors, and they specifically do not require complete divestiture.
But many drug industry critics disagree. The argue that maintaining a personal interest in legislation creates a clear bias. That potential conflict is heightened when a lawmaker accepts trips sponsored by an industry with business before Congress, critics say.
It’s also significant because, as one commentator on a patent blog observed:
Senator Hatch is the Chairman of the Senate Subcommittee on Intellectual Property…This committee handles all intellectual property bills in the Senate, and will certainly be the committee that controls any and all patent reform bills. As Chair, Senator Hatch will preside over markups of such bills.
Very interesting indeed. Do hundreds of thousands of dollars in pharmaceutical companies’ and their lobbying groups’ nickels and dimes fund congressional travel? You bet your insulin they do. Could this impact the cost of your insulin, whether analog or inhaled? If you’re on Medicare, it may have.
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