Drug industry creates sham group to derail prescription drug coverage July 2000
WASHINGTON, D.C. - On the eve of the biggest battle in years over prescription drug legislation, House and Senate members released a study June 20 by the national consumer group Public Citizen that reveals how the drug industry has created and financed a campaign of deceptive advertisements through its front group "Citizens for Better Medicare" (CBM).
"By cooking up this sham 'citizen' group, the pharmaceutical industry is adding insult to injury," said Public Citizen President Joan Claybrook. "It's bad enough that the drug companies price-gouge our seniors. Now they are spending millions from their ill-gotten profits in a shameless campaign to scare the elderly into opposing a common-sense program that would help them obtain the drugs they need at a fair price."
"The drug lobby's goal is single-minded,"
said Frank Clemente, director of Public Citizens
Congress Watch, which
prepared the report. "They want to avoid any kind of Medicare drug coverage
that reins in skyrocketing drug costs."
Last year, the drug companies regular lobby, the Pharmaceutical Research and Manufacturers of America (PhRMA), created the innocuous-sounding Citizens for Better Medicare to serve as its front group. Through CBM, it has budgeted at least $65 million for television advertising since July 1999. This air battle has been supplemented with radio, print and Internet ads and telemarketing calls along with direct mail appeals from CBM and its member groups.
"Public Citizen researched CBM's self-described broad-based bipartisan group and found a collection of shills, seedy direct-mail operatives and industry-funded research and lobby groups working in tight coordination with the drug lobby," Clemente said. Among the report's findings:
CBM's so-called "broad-based" coalition is a sham. Its director, Tim Ryan, was the marketing director for PhRMA before joining CBM, and he admits in interviews that CBM is overwhelmingly funded by PhRMA.
CBM is a secretive political group organized under Section 527 of the federal tax code, which covers groups whose purpose is to influence or attempt to influence elections. Taking advantage of a notorious tax loophole, CBM does not have to even report its existence, much less its activities, to either the IRS or the public. So the public can only guess about the scale and cost of its political efforts to protect the prescription drug industry. According to available press reports, CBM has budgeted at least $65 million since July 1999 to blanket the airwaves with its misleading message.
CBM's members include the Seniors Coalition, the 60 Plus Association and the United Seniors Association. These direct-mail specialists have been denounced by Republicans and Democrats alike for their scare tactics, which involve frightening seniors with overblown threats to their retirement benefits and asking them to send money to support the groups questionable lobbying efforts. This trio has been the subject of numerous investigations in the 1990s. The Seniors Coalition joined CBM in slamming supporters of the Allen bill (H.R. 664) with a direct-mail campaign in Oregon, Colorado and Minnesota, timed to coincide with CBMs television ads. The Allen bill is the most popular proposal in Congress designed to rein in drug prices, with more than 150 co-sponsors.
CBM has enlisted several seemingly independent disease groups, but their tax returns show that some are highly dependent on funding from the drug industry. For example, the Association of Black Cardiologists received about 80 percent of its revenue from pharmaceutical firms in 1996-97, the last years for which donor information is available. The Alliance for Aging Research has many pharmaceutical industry members on its board of directors, and the Kidney Cancer Association received $493,500 (nearly 19 percent of its revenue) from the pharmaceutical industry from 1996-1998.
In addition to CBM, the drug lobby coordinates its activities with a range of conservative organizations that also appear independent at first glance but are heavily funded by the industry. Citizens for a Sound Economy, a conservative think tank, takes corporate grants to produce "research" on topics that directly affect those corporations. CSE took $250,000 from PhRMA member Johnson & Johnson in 1998. And in February 2000, it released a study attacking the Allen bill.