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MCDERMOTT'S MOOLAH

Corporate Butt-Kissing 101

HEY, OUR MAN IN WASHINGTON, U.S. Rep. Jim McDermott, made the May 10th edition of The New York Times. Unfortunately, it was for all the wrong reasons.

In fact, McDermott's lefty allies and congressional colleagues were thrown for a loop by the Times story, which caught their Seattle pal co-sponsoring HR 1598--a bill that could screw health care consumers by keeping prescription drug costs high.

McDermott's bill aims to extend the patents on a handful of brand-name drugs, including Claritin--a popular antihistamine manufactured by New Jersey-based pharmaceutical company Schering-Plough. Extending patents helps pharmaceutical companies like Schering-Plough, which took in $8 billion in revenues last year, to maintain their pricing monopolies by keeping other drug companies from making cheaper, generic knock-offs.

"We were shocked to hear that Representative McDermott put his name on this bill. He is usually one of the best friends of consumers," says Maura Kealey, spokeswoman for Public Citizen, a Washington, D.C.-based consumer group that calls the bill a "rationale to extend [Schering-Plough's] monopoly pricing power."

"We have no idea why a health care consumer advocate like McDermott would sign off on the bill," adds Paul Kim, a legislative assistant to liberal California congressman Henry Waxman. Waxman recently signed a letter condemning HR 1598 as an "unprecedented backdoor opportunity... to give a lucky few drug makers an estimated windfall of over $6 billion."

McDermott's friends wouldn't be so puzzled about his position, however, if the Times had bothered to mention that Schering-Plough was the Seattle congressman's largest corporate contributor (Microsoft and Boeing tied for a distant third after AFLAC, a Georgia-based insurance company). McDermott received nearly $8,000 in campaign contributions from the Fortune 500 pharmaceutical and biotech company.

Claritin is Schering-Plough's cash cow; it generated $1.9 billion in revenue last year. Allowing the patent to expire in 2002, as scheduled, would be bad news for the drug maker, but great news for runny-nosed consumers who currently shell out nearly $70 a month for Claritin (generics are typically priced 30 to 60 percent less than name brands, says Kealey). These inflated prices create whopping profit margins that allow the company to spend an estimated $70 million a year, according to Advertising Age, promoting Claritin with things like direct-to-consumer marketing--a controversial new phenomenon that sends patients to physicians, demanding highly publicized drugs.

McDermott's bill challenges the FDA's original time-consuming approval process of Claritin, which began in 1981. In an unprecedented move, the bill would give the U.S. Patent & Trademark Office the power to review and overturn a handful of past FDA decisions--two of which relate to Schering-Plough products. The bill could result in a three-year extension for Claritin and additional profits for Schering.

David Schaefer, McDermott's press secretary, tried to convince The Stranger that shoring up a New Jersey-based drug manufacturer's profits and advertising budget is relevant to people in Seattle. The bill is a stand for intellectual property rights, he argued, an issue close to the hearts of the Microsoft crowd.

But Schering-Plough's campaign contribution seems much more relevant. McDermott was one of only five Democratic members of the House to get campaign money from Schering. In fact, the company's contribution to McDermott was its PAC's largest donation to a Democratic member of the House and its fourth largest gift to any U.S. House member. The company's biggest contribution was $10,000 to Tennessee Republican Rep. Ed Bryant, who--go figure--co-sponsored the patent-extension bill with McDermott.

William O'Donnell, spokesperson for Schering-Plough, didn't have much to say about the connection, commenting only, "I'm not intimately familiar with our campaign contributions."

But Schaefer maintains that McDermott isn't in the hip pocket of the drug company, pointing out that the congressman has advocated for Medicare coverage of pharmaceutical costs. "It's folly to think you can buy McDermott for that price. He's not for sale at any price," said Schaefer. "I can't tell you exactly how [the patent bill] came to our office."

Here's a guess: Plough's nearly $4.3 million lobbying effort, which features a Washington, D.C. law firm staffed by heavies like former Senate majority leader Howard Baker Jr., knocked on the door of the Republican and the Democrat who topped their 1997-98 gift list.

 

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