Drug Makers Pour Ad Money Into Final Days of Campaign

By Greg Hitt
 WALL STREET JOURNAL, November 4, 2002

The pharmaceutical industry is bankrolling a last-minute pre-election advertising blitz in key states and districts in a bid to tip the balance of power in Congress toward Republicans who back the drug makers' legislative interests.

At least $16 million has been poured into the industry's advertising effort. Much of that money is being spent in the campaign's closing days. The ad campaign is being pressed by advocacy groups with close ties to drug manufacturers.

Leading the effort is the United Seniors Association, a Fairfax, Va., group backed by the Pharmaceutical Research and Manufacturers of America, Pfizer Inc. and others.

The drug-industry push could have a broad impact on health-care policy after the elections. If Republicans succeed in holding the House -- or taking the Senate -- the industry could argue that it had much to do with that success. That would help give it significant leverage on its two most important legislative issues: How to subsidize prescription-drug costs for senior citizens and the battle between name-brand drug makers and makers of generic drugs.

If the industry effort falls short, on the other hand, drug makers could face a backlash from Democrats who would feel they have absorbed the industry's best blow and survived.

The drug industry generally opposes Democratic-party proposals that would administer the drug benefit through Medicare, arguing that that could lead to price controls. Republicans, on the other hand, generally favor allowing private insurance companies to administer the benefit. A television campaign that began last summer and accelerated in recent weeks is encouraging support for Republicans who tend to favor market-based alternatives overseen by private companies.

"Let Jim Talent know you support his plan," says a television ad in Missouri. Mr. Talent, a former GOP congressman, is running neck-and-neck against the Democratic incumbent, Sen. Jean Carnahan, and the two are divided sharply on the prescription-drug issue.

With a budget of more than $12 million, most of it from the drug industry, United Seniors has broadcast similar messages in three other tight Senate races -- in Minnesota, New Hampshire and Colorado -- and in 20 key House districts. With the campaign reaching a crescendo, the group is buttressing the ad campaign with a postal and e-mail blizzard that will make 2.5 million contacts with voters before Election Day Tuesday.

"It's a battle," says Charles W. Jarvis, chairman and chief executive of United Seniors. "We're going to get more aggressive."

The campaign illustrates the power of advocacy groups in the U.S. election system, and presages the wider role they are poised to play in the 2004 campaign. Under the campaign-finance reform passed earlier this year, the political parties will be barred from accepting the large-dollar corporate and labor donations known as soft money after this election.

Interest groups such as the drug industry and its allies will have limits on their ability to name candidates directly in future ad campaigns, if the curbs withstand court challenges. But they will be able to tap into the big money that will no longer flow to the parties. With disclosure rules that allow them to shield donors' identity from public scrutiny, they are expected to wield even more influence in the years ahead.

Despite the threats of war with Iraq and terrorism, polls show that domestic issues are dominating voters' concerns, and the fight over prescription drugs is one of this campaign's hottest. Polls have repeatedly shown that most voters support a drug benefit for seniors. This election season's sparring over the issue reflects not only the ideological divide between the two parties but the expectation that Washington will begin to grapple in earnest with it after the 108th Congress opens in January. The issue ended in stalemate in the 107th Congress: Democrats favored a Medicare-style government insurance plan, while Republicans wanted to encourage private competition to give consumers a choice between costly complete coverage or cheaper high-deductible policies. Many Republicans also favor targeting benefits at the most needy Americans.

The Democrats' interest-group allies have been countering the drug-industry spending with ads of their own. The AFL-CIO is spending $1.5 million on prescription-drug ads nationwide, says spokeswoman Denise Mitchell. Labor-funded ads in Missouri, for example, laud Sen. Carnahan's support for the Democratic approach. "Tell her to keep on fighting," the union ad says.

The senior citizens' lobby AARP, which is also critical of the Republican approach, is bankrolling a $4 million barrage equating the issue with government attempts to stop drug trafficking. "There's another drug war in America: the fight for affordable drugs," the AARP ad says. "This is a drug war we can win."

But those efforts don't come close to the muscle of the drug-industry-backed efforts. "For better or worse, we're a central feature of the campaign discussion," says Nehl Horton, a spokesman for Pfizer. "When you're standing in the spotlight, you have the choice of staying silent or opening your mouth. We felt it was important to say something."

Pfizer, the world's largest drug company, is spending about $4 million on ads running in major markets in 23 states, many of them battlegrounds where the prescription-drug issue is hot, such as Florida, Minnesota and Missouri. Timed to the election, the ads try to put a positive face on the industry, highlighting investments in research and the company's own discount-drug program for seniors. "We saw the election cycle, where pharmaceutical issues are front and center, as an important opportunity to correct impressions," Mr. Horton says.

But Pfizer has left some bad impressions along the way, too. Ads in Nebraska featured the GOP governor and Republican Rep. Lee Terry -- both up for re-election -- endorsing the company's discount program. Critics contended the spots unfairly promoted politicians friendly to the industry on the eve of the election. The ads have since been taken off the air. Mr. Horton says they were developed locally, and funded in part by a local supermarket. "It wasn't part of our national strategy," he said.

Much of the industry's national strategy is being channeled through United Seniors, which has enlisted TV icon Art Linkletter to appear as a pitchman in some spots. Mr. Jarvis insists the goal of the nonprofit group, which is barred by campaign law from expressly supporting one candidate over another, is not to influence the election. Instead, the group wants to stir an "honest and open debate," he says, while expressing hope that the election pressures lawmakers into backing the more conservative drug-benefit plan. "This is the best time to get their attention," Mr. Jarvis says.

The 60 Plus Association, a group billing itself as the "conservative alternative" to the influential AARP, is reinforcing the industry's effort. "We're trying to nudge this thing to a higher level," says Ed Fulginiti, a spokesman for the Arlington, Va., group. The group is concentrating on radio ads and voter mailings to highlight party differences on prescription drugs, including a circular that hit the suburban Maryland neighborhoods where GOP Rep. Connie Morella is facing a tough re-election battle.

As with United Seniors, 60 Plus receives contributions from individuals across the country, and both groups boast of large grassroots membership rolls. But they draw big support from the pharmaceutical industry.

Drug manufacturers "have been extraordinarily generous," adds United Seniors' Mr. Jarvis. "I frankly and unabashedly urge them to contribute all that they possibly can."