Catastrophe - Dick Morris [91]
And what was Ted Jr.’s unique selling proposition? Well, how many other lobbying firms can deliver the chairman of the Committee on Health, Education, Labor and Pensions to a meeting?
Take a look at who paid them. One of the firm’s first clients was the mega-pharmaceutical company Bristol-Myers Squibb (BMS). That’s a pretty big fish to land for a new firm with no track record. Then again, if your father is the Senate’s leader in health care, chairs one of the key committees, and has access to information about what’s going on about congressional interest in the regulation of drugs, it’s a good investment for any drug company.
And BMS needed all the help it could get. The company had an urgent issue before Congress that was worth literally billions of dollars. To protect its profits, BMS was pulling out all the stops to try to pull off a major legislative feat.
When BMS hired Ted Jr.’s firm in 2001, it was engaged in a monumental lobbying effort to try to extend the patent on its runaway success drug, Glucophage, which was designed to control adult-onset diabetes. Although BMS’s patent was due to run out in late 2001, the company was trying to benefit from a possible loophole in the patent law that might allow it to extend the patent for three more years and prevent other companies from selling a less expensive generic alternative. The loophole was a long shot, and the clock was ticking: the firm had only a few months to convince Congress to grant it the extension and keep its competitors from knocking down its doors.
To say this was worth a lot to BMS would be a prodigious understatement: In the year 2000 alone, sales of Glucophage amounted to more than $3 billion!328
If other companies were allowed to compete against BMS with low-priced generics, that $3 billion would be out the window. Of course, the company spent little time worrying about the drug’s burdensome price to consumers, who had filled 25 million Glucophage prescriptions in 2000.329 That wasn’t its concern.
But someone at BMS should have been focusing on it. According to the public interest lobbying organization Congress Watch, extending the patent and continuing BMS’s exclusive right to produce the drug would cost consumers millions of dollars. Congress Watch dramatically described the potential financial effect, based on a formula created by the FDA:
Every minute that generic versions of Glucophage are not available adds an additional $1,000 to consumers’ prescription drug bills. Every hour costs consumers an additional $61,540. Every day costs consumers nearly $1.5 million extra. The six-month costs to consumers are $269 million. And the three-and-a-half year costs to consumers, should BMS succeed in its attempt to extend the Glucophage patent, would be $1.9 billion.330
In the fight to maintain total control over selling the drug, money was no object for BMS. In 2001, the company spent $4.9 million on lobbying to try to get the Glucophage patent extended.331 Before Marwood arrived on the scene, BMS had relied on the most prominent and influential lobbying firms in town to try to convince Congress to buy their position. So why did it suddenly hire an inexperienced little firm late in the year?
In part because, by late 2001, BMS wanted to sit down with Senator Ted Kennedy, who had assumed the chairmanship of the health committee that June. Where was the best place to go for that? To Marwood, of course. And that’s what BMS did. According to the Washington Post:
The manufacturer, which spent $2.6 million on lobbying during the first six months