Biotech money-in-politics - a new report
BASF, Bayer, Dow Chemical's Dow AgroSciences, DuPont, Monsanto and Syngenta. These six companies have spent big bucks... to influence the regulations governing their industry. From 1998-2002, the companies spent more than $53 million to lobby the federal government. Since 1989, the companies have contributed more than $12 million in individual, PAC and soft money donations, 77 percent to Republicans.
But while agriculture's biotech companies have plenty of clout in their own right, they have never had to act alone. Major food companies including General Mills, Nestle and Pepsico contributed to the $5 million campaign to defeat Oregon's Measure 27 [requiring the labeling of GM foods].
Back in 1999, when the Food and Drug Administration first began to pay serious attention to the issue, more than three dozen food and agriculture trade associations formed the Alliance for Better Foods to promote biotech crops to Congress and the American public.
At the time, the food and biotech industries spoke confidently about their partnership. A spokesman for the Grocery Manufacturers of America told a Senate panel, "Acting together, food companies, lawmakers, scientists, farmers and regulators must work to ensure that activists with a political agenda do not kill the promise of biotech foods."
But now the once strong alliance between the biotech and food industries has begun to show some cracks.
...food companies worry that crops containing vaccines, hormones and antibodies could mix with food crops, with disastrous results.
The [Prodigene] scare convinced Kraft CEO Betsy Holden of the need for increased government oversight of biotechnology. "...how many more times can we test the public's trust before we begin to lose it?" Kraft has been burned before. In 2000, Aventis' Starlink corn, which had not been approved for human consumption, somehow ended up in Kraft taco shells and the company was forced to recall them. Now, food companies worry that they could be held liable if biopharm crops were to contaminate the food supply.
But getting stricter regulations may be an uphill battle, especially considering biotech's growing power in Washington.
"They worship biotechnology in the Bush administration," said Bill Freese of Friends of the Earth, an environmental group. "A company like ProdiGene doesn't have to lobby because it's considered the golden boy of a cutting-edge industry."
Indeed, biotech's cachet may work against the food companies, which for years had a stake in making sure the government maintained a laissez-faire attitude toward the industry.
At first, the biotech industry appeared to be responsive to the food companies' concerns. After the ProdiGene incident last fall, the industry's trade association, the Biotechnology Industry Organization, imposed a temporary ban on planting biopharm crops in the Midwest. But BIO soon retracted the ban, reportedly under pressure from Sen. Charles Grassley (R-Iowa). Grassley supports biopharming as another way to help boost his state's agriculture economy. A top recipient of money from the biotech industry, Grassley has received more than $100,000 in individual and PAC donations from biotech companies since 1989.
Not being able to count on BIO's support-or Grassley's-the food companies have struck out on their own. Earlier this year, the Grocery Manufacturers of America, along with nine other food and restaurant trade roups, asked the FDA for greater oversight of pharma crops. If the FDA doesn't respond with new guidelines, the food companies may take their problem to Congress. If they do, they'll be well prepared. During the 2002 election cycle, food processing companies gave $11.5 million in individual, PAC and soft money donations. That's three times the $3.4 million the biotech companies gave during the same period.
The biotechnology industry's major trade association, BIO represents more than 1,000 dues-paying biotech companies. The association has four major lobbying priorities: blocking government price controls of biotech drugs; promoting genetically modified foods; streamlining the regulatory process for biotech products; and supporting tax incentives for the industry. Threats of bioterrorism have also propelled the industry-and its trade association-onto the homeland security front.
One of Monsanto's former lobbyists, Linda Fisher, is now the No. 2 official at the Environmental Protection Agency and a candidate to become the agency's new chief. Monsanto has also spent $21 million on lobbying since 1998, more than any other biotech company. Monsanto also plays politics at the state level. In 2002, the company contributed more than $1 million to a campaign to block Oregon's proposed GM food labeling law.
The biotech industry's No. 1 [election] campaign contributor [donating more than $4.5 million in individual, PAC and soft money donations since 1989, 80 percent to Republicans]. Dow Chemical produces a medley of genetically modified foods. Through its subsidiaries Dow AgroSciences and Mycogen Seeds, the company sells modified corn, canola, soybeans-even sunflowers.
Created by drug giants Novartis and AstraZeneca in 2000, Syngenta...
produces genetically modified corn and cotton, and has been working on biotech rice. Last month, the U.S. Agency for International Development requested more money from Congress to help Syngenta develop insect-resistant potatoes to be planted in famine-plagued Africa. A true player in the biotech industry, last year Syngenta contributed to a $5.2 million campaign to defeat a proposition in Oregon-the first of its kind in the country-that would force food manufacturers to label genetically modified foods.
Aspirin-maker Bayer has expanded into the world of biotechnology... its main interest is in genetically modified crops. Bayer acquired its crop science division from Aventis, which sold it shortly after some of its genetically modified corn, not approved for human consumption, somehow got into the food supply. Bayer CropScience produces genetically modified corn and canola, and plans to have biotech rice on the market within the next few years.
Chemical giant BASF... focuses mainly on using biotechnology to produce amino acids, vitamins and enzymes. Although BASF typically takes a back seat to other companies when it comes to lobbying, the company is a founding member of the Council for Biotechnology Information. The group, which was created three years ago with contributions from BASF and other biotech companies, runs television and print ads touting the benefits of biotech.
The Biotech Boom
July 09, 2003 | A decade ago, biotechnology seemed a strange, futuristic endeavor-the stuff of mad scientists holed up in basement laboratories. But over the years biotech has evolved into a booming industry, complete with blockbuster drugs and substantial political clout.
That clout was on full display in June at the 11th annual conference of the Biotechnology Industry Organization (BIO), biotech's main trade group. Featured speakers included President Bush, Homeland Security Secretary Tom Ridge and Food and Drug Administration Commissioner Mark McClellan.
Biotech pharmaceutical companies and BIO have given more than $13 million in individual, PAC and soft money contributions since 1989. The industry gave more than $4 million in the 2002 election cycle alone.
Between 1998 and 2002, the industry spent an additional $89 million lobbying Congress, the FDA and the White House. Biotech has had a hand in issues including patent protection and homeland security. Most recently, the industry played a role in the Medicare debate, where it joined forces with big pharmaceutical companies to ensure that the new prescription drug benefit would be offered through private insurers.
A Meteoric Rise
The very first biotech companies emerged more than two decades ago, but it wasn't until the early '90s that the industry began to show signs of political savvy. In 1990, Johnson & Johnson formed Ortho Biotech Products, the first biotech subsidiary of a major health care manufacturer-and, in this case, a major political player. Today, the company spends upwards of $3 million on lobbying every year.
By 1992, Genentech and Amgen, two of the oldest and largest biotech companies, had formed political action committees. In 1993, the industry created BIO to represent its interests in Washington. The trade group has spent more than $14 million on lobbying since 1998.
But the game didn't begin in earnest for biotech until the late '90s, when it began scoring its first major political victories-and encountering its first obstacles.
In 1997, biotech teamed up with patient-advocacy groups and the larger pharmaceutical industry to pressure Congress to pass the FDA Modernization Act. The law allowed the FDA to fast-track the approval process for drugs meant to treat life-threatening conditions. But an unintended consequence of the legislation was a series of dangerous drugs that entered the market before they could be adequately tested.
"The fast-track drug approvals resulted in some premature acceptances," said Sheldon Krimsky, a professor at Tufts University who specializes in scientific ethics.
According to Krimsky, the most egregious case did not involve a biotech drug at all. Rezulin, a diabetes treatment, killed at least 60 people before the FDA recommended it be pulled from the market. But biotech drugs did have their problems. The FDA recalled RotaShield, a childhood diarrhea vaccine, less than a year after it was approved.
Biotech endured another major setback in 1999 with the death of 18-year-old Jesse Gelsinger, who was participating in a gene therapy clinical trial at the University of Pennsylvania. The FDA promptly shut down Penn's gene therapy program. In addition, the National Institutes of Health held hearings, and then-Health and Human Services Secretary Donna Shalala called for stricter guidelines for human clinical trials.
In response, the biotech industry stepped up its political activity. BIO launched its first television ad campaign in January of 2000 under the slogan "Biotechnology, a big word that means hope." The industry increased its campaign contributions for the 2000 election cycle. Washington quickly forgot biotech's problems.
It didn't hurt that Celera Genomics and Human Genome Sciences announced their completion of a working draft of the human genome sequence that same year. This revolutionary gene "map" would give biotech firms the tools to research and develop a host of new treatments for genetic diseases.
"The Human Genome Project was a big step for the industry," said Kay Holcombe, executive vice president of Policy Directions and a lobbyist for the Biotech Coalition, a group of mid-sized biotech companies. "It signaled that medicine would be more genetically driven in the future."
President Clinton was just as enthusiastic. In an internationally televised news conference, he gushed, "Without a doubt, this is the most important, most wondrous map ever produced by humankind."
Clamoring for Change
But Clinton's speech was not enough to overcome biotech's mounting frustration with the White House. Despite the FDA's standing orders to speed up its approval process, the agency actually slowed down under Commissioner Jane Henney, a Clinton appointee. Median approval times for biotech drugs rose from 11.5 months in 1998 to 17.5 months in 2000.
The industry was eager to find a replacement for Henney, and the upcoming elections represented an ideal opportunity to accomplish that goal. Biotech companies and BIO contributed more than $3 million in the 2000 election cycle-nearly double what they'd spent in any previous election. Almost 70 percent of that money went to Republicans.
It took President Bush almost two years to fill Henney's post, but the biotech industry was more than satisfied with the result. Since taking office last November, Mark McClellan has received rave reviews from the industry for working with companies to get drugs approved more quickly.
"Over the last eight months there have been a number of significant FDA approvals," said BIO President Carl Feldbaum. Among them are Genentech's Xolair, the first biotechnology drug for asthma, and Biogen's Amevive, a psoriasis treatment. Both drugs are expected to generate millions of dollars for their developers.
Drug approvals should get an extra boost from President Bush's Project BioShield, which gives the FDA the authority to fast-track vaccines and other treatments that could be used in the event of biological or chemical weapons attacks. Even before this initiative, the biotech industry had made strides in Congress on the homeland security front. Last year, BIO and its member companies successfully lobbied for liability protections in the Homeland Security Act that allow companies to develop vaccines without the threat of lawsuits. The legislation also authorized more than $3 billion for biodefense research and development.
Partnering With Drug Companies
But the industry is not always playing offense. Along with the drug lobby, biotech companies have been fighting an ongoing battle to hold on to their patents. In 2002, they successfully blocked legislation that would have eased the way for generic drugs to enter the market. The industry is dealing with the issue again this year, trying to keep a generic drug provision out of the final Medicare bill.
This year's Medicare debate raises another controversial issue for the industry: price controls. If Medicare were to cover the new prescription drug benefit alone, the government would likely impose price controls, which biotech and pharmaceutical companies oppose. Biotech drugs are among the most expensive to develop, and the industry says it wants a competitive reimbursement rate from insurance companies for these new treatments.
"So many of our companies are developing drugs for the aging population," Feldbaum said. "BIO companies need a reliable and predictable reimbursement process."
Armed with an ad campaign urging Congress to "Keep the care in Medicare," BIO is pushing for a plan that would allow seniors to choose among several private insurers-a surefire way to keep the government from having the bargaining clout to drive down prices.
Critics of the private insurance plan say a prescription drug benefit insured by Medicare alone would be more useful to consumers.
"Private plans have proved themselves to be wasteful and unreliable in delivering health care," said Ben Peck, a Medicare lobbyist for Public Citizen's Congress Watch, a consumer advocacy group in Washington.
The Medicare debate seems poised to go in the biotech companies' favor - especially with the larger and more powerful pharmaceutical industry on their side. Only a handful of big drug firms actually research and develop biotech drugs. But according to BIO, the industry strikes more than 900 deals with biotech companies each year to manufacture and market their products.
Eli Lilly was one of the first pharmaceutical companies to enter into such an arrangement when it licensed human insulin technology from Genentech in the early '80s. Today, nearly 10 percent of Lilly's revenue comes from Humulin, the resulting blockbuster diabetes drug.
A 2002 PricewaterhouseCoopers report says these lucrative partnerships will become even more common in the future: "With pipelines running dry and patents on older drugs running out, today's big pharma is on the hunt for promising products and looking to biotech to replenish its pipeline."