Pharmaceutical companies, affiliated trade groups spent more than $600,000
Members of Congress and their aides accepted more than $600,000 in free travel
from pharmaceutical interests during a 5½-year period in which drug company
profits climbed, in part due to federal legislation favorable to the industry.
Dozens of the trips were approved by lawmakers, who had significant personal
interests in the pharmaceutical industry or later worked with drug-makers. Almost
all of those same legislators voted in favor of the 2003 Medicare Prescription
Drug Act, which led to a windfall of profits for the industry.
"It's been a highly profitable trade-off" for pharmaceutical companies,
said James Love, a drug industry critic and the director of the nonprofit Consumer
Project on Technology. "They give out some free perks, hand out some [rides
on] private jets, sponsor some trips and give some campaign donations. And in
return, they make billions."
Treated to a dose of travel
The Center for Public Integrity found that from January 2000 through June 2005,
lawmakers and staffers accepted at least 325 trips ranging from one day to several
days long — with an average cost of nearly $1,900 — from pharmaceutical
companies or trade groups that count drug-makers among their members. Nearly
60 percent of those trips were taken by Republican lawmakers or their aides.
More than 80 other trips were co-sponsored by pharmaceutical companies and
non-pharmaceutical interests. The cost of those trips was not included in the
Pharmaceutical industry-sponsored travel seems to be on the increase. In 2000,
drug companies and related trade groups spent $53,000 on trips by members of
Congress or their aides. That figure rose in each full year of the Center's
study, peaking in 2004, with expenditures of $181,000.
Trade groups' spending accounted for nearly 80 percent of the industry's total
expenditures, at least $478,000 worth of travel.
The drug industry's largest and most influential lobbying group, Pharmaceutical
Research and Manufacturers of America (PhRMA), paid for 45 trips worth at least
a combined $92,000. Nearly half of the PhRMA-sponsored trips were taken in 2003,
prior to the November vote on the Medicare prescription drug bill. The legislation
created a taxpayer-funded prescription drug benefit for senior citizens and
effectively continued a ban on imports of lower-cost drugs from Canada.
During those first nine months of 2003 PhRMA spent $50,000 hosting 21 trips,
including excursions to San Francisco, San Diego and Naples, Fla.
"America clearly has the best health care in the world, but it can only
remain that way if policymakers make good policies and PhRMA continues to educate
others about the important work our industry does to help improve patient care,"
PhRMA Senior Vice President Ken Johnson told the Center in an e-mailed statement.
The Center provided PhRMA with a number of detailed questions about trips the
group funded, but spokesman Arturo Silva declined to answer them, saying that
it is PhRMA's policy not to respond to questions about specific trips it has
Washington-based Advanced Medical Technology Association (AdvaMed) sponsored
the most trips — 58, valued at $165,000 — among organizations examined
in the Center's study.
While AdvaMed represents the interests of medical device manufacturers, the
group counts several major pharmaceutical companies, including Pfizer, Roche
and Johnson & Johnson, among its members.
Regina Hall, AdvaMed's director of communications, said the group's interests
are different from those of drug industry organizations such as PhRMA. Hall
said AdvaMed does not belong in the Center's study and refused to comment about
the travel it sponsored.
One of the most frequent beneficiaries of AdvaMed trips was the office of Rep.
Jim Ramstad, R-Minn., whose aides accepted five trips worth more $16,500. The
travel can be attributed to Ramstad's role as founder of the Medical Technology
Caucus and to the high number of medical device companies based in his home
district, said Karin Hope, the congressman's legislative director. Hope accepted
an AdvaMed trip to Germany and the Czech Republic in 2004.
While trade groups represent the bulk of the money spent on congressional travel,
individual drug-makers spent $135,000 on 84 trips, including pricey excursions
to Europe, the Caribbean and Las Vegas.
Leading the way was GlaxoSmithKline, the world's second-largest pharmaceutical
company. The firm hosted 24 trips — many to Belgium, where its vaccine
research center is located — with expenditures in excess of $44,000. Among
the purposes for travel reported were attending a conference on vaccine policy
and discussing "vaccine shortage, safety, world health, and bioterrorism
Pfizer, the world's highest-grossing drug company, sponsored 12 trips valued
at more than $21,000.
A helpful ally
Former Sen. John Breaux,
One of the most reliable allies of the pharmaceutical industry in Congress
was then-Sen. John Breaux of Louisiana. During his nearly two decades in the
Senate, Breaux developed a reputation as a Democratic emissary who could broker
deals and gather votes from either side of the aisle, even on the most divisive
He was one of only two Democrats — Sen. Max Baucus of Montana being the
other — allowed to participate in the Republican-controlled negotiations
during which the 2003 prescription drug bill was drafted, according to media
At around the same time Breaux was working with House and Senate negotiators
to draft the final bill, Pfizer flew him to New York for a one-day meeting.
The trip was nothing new for Breaux, whose office accepted 15 trips —
including six he took from Pfizer — from drug-makers and their allies.
The portfolio of pharmaceutical trips from Breaux's office, with expenditures
in excess of $30,000, far exceeds that of the next most-traveled office, Rep.
Bill Thomas, R-Calif, whose aides accepted eight trips.Although Breaux is now
retired from Congress, his relationship with Pfizer has continued to flourish.
In June 2005, he launched the Ceasefire on Health Care campaign, bringing together
leading Republicans and Democrats to discuss the nation's health care system.
The campaign is underwritten by a grant from Pfizer.
Breaux declined to comment about his travel or Pfizer's relationship with the
Ceasefire on Health Care campaign. Pfizer spokeswoman Darlene Taylor confirmed
the company's involvement with the campaign but refused to discuss details.
A personal connection
Sen. Orrin Hatch,
Some lawmakers have had a personal financial interest in certain drug manufacturers.
For example, Sen. Orrin Hatch, R-Utah, and his aides took seven trips, totaling
$12,000, sponsored by Pfizer and GlaxoSmithKline, as well as two industry trade
groups, the California Healthcare Institute and the Healthcare Leadership Council.
As of May 15, when Hatch filed his 2005 financial disclosure form, the senator
held at least $18,000 worth of stock in Pfizer and Novartis, the Swiss-based
manufacturer of Ritalin, the attention-deficit drug.
Meanwhile, aides to Rep. Nancy Johnson, R-Conn., traveled five times courtesy
of the drug industry or its trade groups, including a $4,400 trip to learn about
the German health care system sponsored by AdvaMed. Johnson holds stocks in
numerous pharmaceutical companies, including at least $19,000 worth combined
in Johnson & Johnson, GlaxoSmithKline, Gilead and Amgen, according to her
2005 financial disclosure statement, also filed on May 15.
The Senate and House ethics manuals state that having personal assets or holdings,
such as stocks in industries that also have significant legislation pending,
is not automatically considered a conflict of interest. The manuals state that
legislation spans a wide range of business and economic endeavors, and they
specifically do not require complete divestiture.
Many drug industry critics disagree, arguing that maintaining a personal interest
in legislation creates a clear bias. That potential conflict is heightened when
a lawmaker accepts trips sponsored by an industry with business before Congress,
"It's obvious," said Dr. Arnold S. Relman, emeritus professor of
medicine and social medicine at Harvard Medical School. "There's a conflict
of interest whenever legislators that are going to write legislation affecting
the future of the industry are entertained and wined and dined by the industry
that they are writing about."
The debate over possible conflicts of interest is highlighted by the Medicare
Prescription Drug, Improvement and Modernization Act of 2003.
Relman, a former editor-in-chief of the New England Journal of Medicine, said
the pharmaceutical industry's bottom line already has increased by billions
because of the bill, thereby increasing profits for stockholders. Consequently,
members of Congress who held stock in pharmaceutical companies stood to benefit
financially from the passage of the Medicare bill.
Rep. Nancy Johnson,
Although the House and Senate ethics manuals state that having stock holdings
in industries that have pending legislation is permissible, House guidelines indicate
that the ethics committee has occasionally counseled members, in private advisory
opinions, that it would be inappropriate to introduce or co-sponsor legislation
that would directly affect their personal financial interests. "Sponsorship
implies a degree of advocacy above and beyond that involved in voting," the
Still, many members sponsoring bills have elected to maintain their personal
holdings. Johnson co-sponsored the Medicare bill in the House during the same
period in which she held thousands of dollars worth of shares in Johnson &
Johnson. The congresswoman's office did not return repeated calls for comment.
Hatch co-sponsored the Medicare bill in the Senate while holding at least $3,000
worth of shares in Pfizer and Novartis, according to his 2003 financial disclosure
In e-mailed statements to the Center, Hatch's office defended the senator's
stock holdings, saying they represent a small percentage of his investment portfolio.
The statements also characterized Hatch's pharmaceutical travel as "legitimate
activity under Senate rules," and said, "He likes to have open communication
with industry leaders."
According to Love of the Consumer Project on Technology, such communication
should not lead to personal financial gain.
"People shouldn't be taking money from drug companies, because if they're
taking money, they're not looking out for the interests of the taxpayers; they're
looking out for the drug companies," he said.
Stocks and privately sponsored trips are not the only ways members have been
connected to the pharmaceutical industry.
Staffers for then-Sen. Don Nickles, R-Okla., took six trips from the pharmaceutical
industry, from GlaxoSmithKline, Biotechnical Industry Organization, Healthcare
Leadership Council and the California Healthcare Institute. Nickles told the
Center that he does not recall authorizing any pharmaceutical travel but that
fact-finding trips are generally beneficial to the legislative process.
"I authorize the trips to get people better educated on things,"
he said. "Do I think it was advantageous? Yes."
Between 2000 and 2003, when five of the trips were taken, Nickles reported holding
tens of thousands of dollars worth of shares in drug companies, among them Merck,
Amgen, Johnson & Johnson and Genentech — each members of at least one
of the trade groups that sponsored travel for his aides. Nickles said his stock
holdings were "paltry" and did not affect how he voted on drug industry
In fact, Nickles voted against the Medicare bill he helped draft, arguing that
the final bill did not go far enough in reforming the Medicare system.
Despite his vote, Nickles' relationship with the pharmaceutical industry has
After leaving office in January 2005, he opened his own lobbying firm, the
Nickles Group. His firm's clients have included PhRMA, as well as Bristol-Myers
Squibb and Pfizer, also members of some of the same industry trade groups from
which Nickles' staffers accepted trips.
Nickles bristled at the suggestion of any conflict of interest, saying that
the pharmaceutical companies he represents are "first-class companies."
"I think they hired me because they think our firm can help navigate the
challenges that confront them in D.C., but nothing was implied when I was in
office that when I left would help them once I was out of office," Nickles
Others who have preserved professional ties with the drug industry after leaving
Congress include Billy Tauzin, R-La., and Jim Greenwood, R-Pa., who have each
landed lucrative positions in the pharmaceutical business.
Tauzin's office took three pharmaceutical-funded trips, notably a PhRMA-sponsored
$4,200 excursion he took with his wife in March 2003 to Naples, Fla., where
he spoke at a conference. Shortly after, Tauzin was a co-sponsor and key negotiator
of the Medicare bill. In 2005, he became the chief executive officer of PhRMA,
with an annual salary of about $2.2 million, judging from PhRMA tax filings
for mid-2004 through mid-2005, which listed Tauzin's salary for the first half
of the year.
Greenwood's staffers took four trips, totaling $7,700, courtesy of AdvaMed,
California Healthcare Institute and Biotechnology Industry Organization. In
2005, Greenwood became president of Biotechnology Industry Organization, with
an annual salary reported to be $650,000.
Once lawmakers added the prescription drug benefit for senior citizens to Medicare,
the pharmaceutical industry found a reliable consumer for its products. Meanwhile,
a provision in the law — for which the pharmaceutical industry lobbied
heavily — prevents the federal government from negotiating price discounts
with drug companies.
A 2003 study by Boston University researchers Alan Sager and Deborah Socolar
found that 61 percent of Medicare money spent on prescription drugs would become
profit for pharmaceutical companies.
Meanwhile, the first prescription drug coverage under Medicare is likely to
cost the government more than $1 trillion between 2006 through 2015, according
to a March 2006 Congressional Budget Office estimate.
"Clearly, this legislation was tailored extraordinarily to the interests
of the drug industry," said Ron Pollack, executive director of Families
USA, a group that lobbies for affordable health care. "This legislation
was the pharmaceutical industry's dream, to the detriment of the taxpayers."