PAPER CUTS: The Real Drug Wars

The war on drugs is about to heat up, and for a change, the Medellin cartel, the border patrol, and the DEA, are nowhere in sight. Bribery, corruption, payoffs given and received at the highest levels, are still standard practice, but unlike the government's full frontal assault on crack addicts and backyard pot growers, the bad guys are getting a free ride. Not surprising when you consider that the villains are Fortune 500 corporations.The victims, on the other hand, are all of us. Cardiac patients, menopausal women, diabetics, allergy sufferers, and everyone else whose quality of life depends on receiving the proper medications.Unlike street drugs, which are, at least, subject to the laws of supply and demand, prescription medications protected by patent enjoy a unique position, beyond the exigencies of a free market economy. For as long as a patent lasts, the price of these pharmaceuticals is whatever the manufacturer decides, not materially different from the ransom demanded by terrorists. If you want to stay healthy, you pay the price.Claritin is a drug for the treatment of allergies, with none of the sedating effects of over-the-counter anti-histamines. Since its approval by the FDA, and abetted by an FDA decision to allow direct advertising to consumers, Claritin has become the primary source of revenue for its manufacturer, New Jersey based Schering-Plough, with annual sales growth in the double digits. In 1998, U.S. sales of Claritin totalled an estimated $5 million a day, $1.8 billion for the year.After the passage of the Drug Price Competition and Patent Term Restoration Act (Hatch-Waxman Act) granting patent extensions to drugs in the FDA pipeline, Claritin received a two year extension, and again in 1994, under the terms of the General Agreement on Tariffs and Trade (GATT), Claritin received a second extension, for 22 months. By the year 2002, when the patent is due to expire Schering-Plough will have enjoyed 21 years of patent protection. At that time other pharmaceutical companies would be free to manufacture the identical formulation at a competitive price.One dose of Claritin costs between $1.88 to $2.66, according to a report issued by Ralph Nader's consumer watchdog group, Public Citizen. The generic equivalent would cost about 50 cents. Public Citizen estimates that an extension of the Claritin patents for an additional three years would cost consumers and the U.S. healthcare system between $1.6 and $3.2 billion, based on a 30 percent to 60 percent reduction in drug pricing due to competition from generics.In the effort to extend its monopoly, Schering Plough spent around $2 million on lobbying efforts in 1996, the first year it tried to get yet another patent extension. By 1997, the company was spending up $2.6 million, $4 million in 1998, and $2.2 million in the first half of 1999, according to the Center for Responsive Politics. To this end, it employs an army of 11 lobbying firms, the primary one led by former Senate Majority Leader Howard Baker. Recently added to its roster of lobbyists are Linda Daschle, wife of Senate Majority Leader Tom Daschle (D-S.D.) and Gore campaign advisor Peter Knight.In the 1999 legislative session, New Jersey Senator Robert Torricelli introduced a bill (H.R.1598/S.1172) to extend the patent on Claritin for three more years. The Claritin Bill was introduced one day after Schering-Plough contributed $50,000. to the Democratic Senate Campaign Committee, a committee chaired by Senator Torricelli. Schering-Plough and a spokesman for Senator Torricelli called the timing "a coincidence".In the House, the bill is being co-sponsored by Reps. Edward G. Bryant (D-Tenn) and Jim McDermot (D-Wash.). Schering-Plough's PAC is a longtime contributor to Representative McDermott's campaigns, and supplies him with free tickets to Baltimore Orioles games. David Schaeffer, a spokesman for Rep. McDermott calls Schering-Plough a "good corporate citizen".In July of 1999, shortly after announcing a bid for the Republican presidential nomination, Senate Judiciary Committee Chairman Orrin Hatch (R-Utah) scheduled hearings on the Claritin patent extension bill. In the same month, Hatch requested the use of the Schering-Plough Gulfstream IV corporate jet, for which, under Federal campaign rules, he is required to pay for the price of a first class ticket, considerably less than the cost of operating the plane. Hatch has used the plane 5 times, and his spokesman Jeff Flint says the use of the plane has ïnothing to do with the hearings'.According to the Washington Post: "Former Surgeon General C. Everett Koop has backed Schering-Plough's position on the patent extension bill in letters and meetings over the past year. The company made a $1 million contribution to Koop's personal foundation, and advertises on his popular healthcare Internet site". The company and a Koop aide said the gift was "not related to his advocacy."Leading the fight against the Claritin Bill is Vermont Senator Patrick Leahy, ranking Democrat on the Senate Judiciary Committee. In a statement to the committee on November 4, 1999, Senator Leahy said: "Even though the bill will cost the government and consumers hundreds of millions of dollars, it has been no secret lately that Schering-Plough has launched an all-out campaign to pass this legislation, in bold disregard of how much damage this bill does to competition and consumer's pocketbooks".In the waning days of the 1999 legislative session, Senator Leahy and Senator Charles Schumer (D-NY) were able to block the patent extension bill, but the battle has only just begun. The next session begins at the end of January, and like the Energizer Bunny, Schering-Plough and the Claritin Bill will be back.