Cut-throat lobbying on Capitol Hill by a few biotech companies has backfired in their faces and in the process angered more than a few members of Congress. Now the companies that shelled out thousands of dollars for lobbyists this year will have to do the same again next year.
The fireworks began when a few well-intentioned members of Congress decided it was time to rewrite the Orphan Drug Act of 1983. Under that law, companies that develop drugs for treating rare diseases get a seven-year monopoly on marketing rights for those drugs with no price controls.
The law was enormously successful in most cases, resulting in drugs that might not have been produced without the economic incentive of a monopoly. But without competition, the companies could charge whatever they wanted. Treatment costs for some conditions rose to $30,000 a year of more. A few biotech companies soon began reaping millions of dollars.
When Congress caught on and tried to curb their profits, the drug companies slipped into high gear. They hired lobbyists who persuaded Congress to water down the legislation to the point where it was harmelss to the companies's profits.
But the lobbyists did their jobs too well. President Bush has vetoed the watered-down version of the bill, and now no one is happy - not Congress that has to go through the battle again in the next session, and not the biotech companies that have to hire their expensive lobbyists for a rerun.
Rep. Henry A. Waxman (D-Calif.) and Sen. Howard M. Metzenbaum (D-Honio) sparked a near war in the last session of Congress when they proposed lifting the monopoly on orphan drugs in cases where more than one company was interested in competing for Food and Drug Administration approval of the drug.
Biotech companies with profits on the line fought back. One company, Genentech Inc., which makes a human growth hormone that is projected as an orphan drug, hired at least 12 lobbyists.
Among them was former Florida senator Paula Hawkins (R) who was paid $95,000 by Genentech for six months of work. Many of the other biotech lobbyists went home satisfied. But Bush, who had paid little attention to the battle on the Hill, vetoed the compromise legislation. The veto took Congress and the biotech companies by surprise.
Why the veto? Congressional sources told our associate Dean Boyd that the ill-informed White House was convinced by the early arguments made by the biotech companies against strong revisions to the law. Bush's Council on Competitiveness chaired by Vice President Quayle, was particularly gullible to the arguments.
A representative to one biotech company grudgingly called Bush's veto "not useful." The companies must now call back their high-priced lobbyists, but the big losers are those who suffer from rare diseases. Abbey Meyers of the National Organization for Rare Disorders said the veto means that drug companies "will be able to continue charging whatever they want for their drugs."