GENET archive


7-Business: How the biotech industry captured Washington's attention

                                  PART I
-------------------------------- GENET-news -------------------------------

TITLE:  How the biotech industry captured Washington's attention in 10
        short years
SOURCE: Center for Responsive Politics, USA, by Sheryl Fred
DATE:   Jul 9, 2003

------------------- archive: -------------------

How the biotech industry captured Washington's attention in 10 short years

[go to web page to follow the links]

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) [link], biotech's main
trade group. Featured speakers included President Bush, Homeland Security
Secretary Tom Ridge and Food and Drug Administration Commissioner Mark

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 [link] 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 [link] and Amgen [link], 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 [link] 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
[link], 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

"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 a multimillion-dollar ad campaign [link] 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."

More Information

 * Biotech Industry Campaign Contributions
* Biotech Industry Lobbying Expenditures

                                  PART II
-------------------------------- GENET-news -------------------------------

TITLE:  Food Fight
SOURCE: Center for Responsive Politics, USA, by Vikki Kratz
DATE:   Jul 9, 2003

------------------- archive: -------------------

Food Fight

Major food companies have worked side by side with biotech to promote
genetically modified foods. How long will the alliance last?

[go to web page to follow the links]

July 09, 2003 | Last fall, an Oregon housewife spearheaded a ballot
initiative that would have forced the nation's food companies to label
products sold in the state that were made with genetically modified
ingredients. She was concerned about the safety of crops that had been
engineered to produce their own pesticides. Oregon's Measure 27 would
have been the first law of its kind in the country. But a $5 million
campaign, financed by an alliance of biotech and food companies, easily
defeated the measure--and demonstrated the power of the industries'

The flood of out-of-state money into Oregon's ballot battle came from the
agriculture industry's top biotech companies: BASF [link], Bayer [link],
Dow Chemical's Dow AgroSciences, DuPont, Monsanto [link] and Syngenta
[link]. These six companies have spent big bucks in the past to defeat
similar laws and to influence the regulations governing their industry.
From 1998-2002, the companies spent more than $53 million [link] to lobby
the federal government. Since 1989, the companies have contributed more
than $12 million [link] in individual, PAC and soft money donations, 77
percent to Republicans. Dow Chemical [link] is the industry's top
contributor, donating more than $4.5 million in individual, PAC and soft
money donations since 1989, 80 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. The food companies oppose
labeling genetically modified (GM) foods, citing the impracticality and
expense of labeling GM ingredients that appear in 70 percent of the
country's processed food. The industry was also worried that passage of
Oregon's law would set off a chain reaction of similar laws in other states.

It wasn't the first time that the food industry had teamed up with
biotech companies. 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 [link] to promote biotech crops to Congress and the American
public. They were trying to counteract a campaign by consumer groups and
environmentalists questioning the safety of the foods. The anti-biotech
campaign had worked so successfully abroad that the European Union had
banned GM foods, while Japan and Australia required them to be labeled.

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, "Major food and beverage companies--who are strongly
supportive of food biotechnology and the farmers who utilize it--are part
of this coalition dedicated to educating the public about its benefits. ...
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.

Although the food companies still support genetically modified crops, the
latest advance in food biotechnology has them suddenly wary. Biotech
companies are now altering plants to produce medicines, a practice called
"biopharming." The crops can make the proteins and other substances
needed for medicines at a lower cost than pharmaceutical factories can.
But food companies worry that crops containing vaccines, hormones and
antibodies could mix with food crops, with disastrous results.

A newly created medicinal plant almost got into the food supply last
year. A small biotech company called ProdiGene was attempting to
genetically modify corn to produce a diarrhea drug. When the company
completed its research trials, a farmer re-planted the test fields with
soybeans. Some of the modified corn, however, was still present in the
field and mixed with the soybeans during harvesting. The U.S. Department
of Agriculture ordered ProdiGene to pay a $250,000 fine and spend another
$3 million to buy the contaminated soybeans, which were destroyed.

The scare convinced Kraft CEO Betsy Holden of the need for increased
government oversight of biotechnology. "Right now, public acceptance of
biotechnology in America is relatively high," she told an agricultural
forum in April. "But 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
groups, 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.

More Information

 * Biotech Contributions, 1989-2003
contributions.asp * Biotech Lobbying, 1998-2002 http://


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