With More Oversight Possible Under Obama, Drug Industry Works to Polish Its Image

By Ceci Connolly
Washington Post Staff Writer
Thursday, January 8, 2009

The pharmaceutical industry, confronting sluggish growth, low prestige and the prospect of more-aggressive government oversight, is moving on several fronts to burnish its image and align itself rhetorically with the health reform goals of President-elect Barack Obama and the Democratic Congress.

Conceding that it has long been viewed as Republican-dominated, the industry's lobbying arm plans to spend tens of millions of dollars on an advertising blitz promoting Obama-style health coverage for every American. The first spot -- sponsored by the drug lobby, consumer and labor groups, and health providers -- will be unveiled today.

Beginning this month, drug companies also will voluntarily submit to a host of marketing restrictions in an attempt to preempt stricter regulations that lawmakers in both parties are pursuing.

"We had better self-police and stop doing the things that cause so much criticism, or we're going to get legislated and regulated by government," said W.J. "Billy" Tauzin, the Republican former congressman who runs the Pharmaceutical Research and Manufacturers of America (PhRMA), a trade association. The changes, he said in an interview, are an effort to move away from the industry's "slash-and-burn kind of policy" in response to previous regulatory and legislative efforts.

Even before Obama's victory, the drug lobby took a dramatic political turn: In 2008, for the first time in 18 years, industry contributions to Democrats were on par with money given to Republicans, according to an analysis by the Center for Responsive Politics, a watchdog group.

"PhRMA had been isolated into a one-party camp," Tauzin said. "We're trying to reposition as less of a partisan player."

The maneuvering comes at a time of great stress for America's drugmakers, which have not been enthusiastic proponents of past health-care reform efforts. After double-digit growth throughout the 1990s and much of this decade, the pharmaceutical industry is expected to grow less than 2 percent in 2009, according to the independent research firm IMS Health. Analysts say it will be difficult to improve on that in the next few years, given the weak economy and a dwindling supply of new blockbuster medications coming to market.

Equally worrisome to many in the business is the arrival of a Democratic president who, in tandem with a Democratic-controlled Congress, is expected to add muscle to the Food and Drug Administration and press for an overhaul of the U.S. health system.

Some individual companies are moving independently, suggesting strains in the once-unified drug lobby. In mid-December, Merck announced that it was joining a coalition in support of broad health-care reform, including controversial measures to compare the performance and price of medications.

"We understand clearly that we are entering this debate at a time when the pharmaceutical industry's standing is low," Kenneth Frazier, president of Merck's Global Human Health unit, said in a speech. "We face a choice of acting from a place of fear of the potential harms that could occur to us in reform or acting on the hope of what reform could mean to our industry."

On the immediate horizon are two proposed regulatory changes that would dramatically alter how the industry markets its products.

Sen. Charles E. Grassley (R-Iowa) intends to refile a bill requiring drug and biotech companies to report to the federal government all gifts or payments to physicians for research, speeches, travel, consulting or anything else. Companies failing to report would face financial penalties. The bill is in response to lavish industry spending, which critics maintain creates conflicts of interest for doctors.

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