Friday, June 27, 2008

Who is the Best Presidential Candidate for the Pharmaceutical-Life Sciences Industry-McCain or Obama?--Thoughts as the Summer Begins

We had discussed earlier whom would be the “best” presidential candidate for the Pharmaceutical-Life Sciences industry. With Obama and McCain as the presumptive candidates this Fall, we thought it useful to give our opinion on who would make more sense for our industry. Unfortunately, based on the rhetoric and their stated ;positions, we are dealing with the proverbial Hobson's choice.

Recently CNBC ( noted that “both Barack Obama and John McCain promise substantial changes if they win. In fact, their agendas will likely affect a wide range of companies from Alcoa to Zygo Corp. But the companies that get hit hardest are probably in health care. Why? Both candidates promise a prescription for Uncle Sam's ailing health care system. McCain may allow foreign imports of drugs while Obama could allow Medicare to negotiate prices with the likes of Pfizer and Merck. That move could cost the industry $30 billion.”

One measure of how the industry feels is to look at their Political Action Committee (PAC) contribution—basically voting with their money. In a recent article, Bloomberg Business ( talked about both candidates vis a vis the industry as follows: “Pharmaceutical industry employees and PACs contributed $516,839 to Bush in 2004, compared with $280,688 for Kerry, according to the Washington-based Center for Responsive Politics. This time around, they gave $339,729 to Obama, $262,870 to Clinton and only $74,850 to McCain through March.” They go on to say that McCain is

no friend of the industry: ``McCain has not characterized himself as a friend of the industry,'' said Dan Mendelson, president of Avalere Health LLC, a Washington research company. During a Jan. 5 debate in New Hampshire, McCain criticized the drug companies for high prices charged to the government's Medicare and Medicaid programs and said he backed importing cheaper drugs from Canada, a position also held by his Democratic opponents.” His position on re-importation has not softened and is the single policy point listed on his website:

“CHEAPER DRUGS: Lowering Drug Prices. John McCain will look to bring greater competition to our drug markets through safe re-importation of drugs and faster introduction of generic drugs.”


Bloomberg Business goes on further to quote: ``How could pharmaceutical companies be able to cover up the cost to the point where nobody knows? Why shouldn't we be able to re-import drugs from Canada?'' McCain asked. One of his former opponents, former Massachusetts Governor Mitt Romney, interjected, telling McCain not to paint drug companies as ``big bad guys.'' ``Well, they are,'' McCain responded.

If the above seems challenging, consider Barack Obama's positions (Source: care/):

“Lower prescription drug costs. The second-fastest growing type of health expenses is prescription drugs. Pharmaceutical companies are selling the exact same drugs in Europe and Canada but charging Americans more than double the price. Obama will allow Americans to buy their medicines from other developed countries if the drugs are safe and prices are lower outside the U.S. Obama will also repeal the ban that prevents the government from negotiating with drug companies, which could result in savings as high as $30 billion. Finally, Obama will work to increase the use of generic drugs in Medicare, Medicaid, and FEHBP and prohibit big name drug companies from keeping generics out of markets.”

On the potential more positive front, “Obama strongly supports investments in biomedical research, as well as medical education and training in health-related fields, because it provides the foundation for new therapies and diagnostics. Obama has been a champion of research in cancer, mental health, health disparities, global health, women and children's health, and veterans' health. As president, Obama will strengthen funding for biomedical research, and better improve the efficiency of that research by improving coordination both within government and across government/private/non-profit partnerships. An Obama administration will ensure that we translate scientific progress into improved approaches to disease prevention, early detection and therapy that is available for all Americans.”

So there are “the facts” as we know them, what is clear is that if either candidate has their way, the Pharmaceutical industry can add even greater political pressure especially on pricing to its list of worry and challenges. By the narrowest of margins, we come down on the side of Obama—his approach to the industry seem a bit (very small bit) more balanced, he seems to recognize the need for R&D and to a degree the rewards that go with that success, he is more likely to extend health care coverage to a wider group of Americans and provide broader prescription coverage despite pricing pressure. What is clear to me is that one should not base their voting preference based on either candidates view on the industry.


The Consultant's Consultant said...

You may want to see the following for a more compelling case:

The Consultant's Consultant said...

The text of the above article is:

McCain to Pharmaceutical Innovators: Drop Dead

Senator McCain Slurs Pharmaceutical Industry as “The Big Bad Guys” During Debate, Calling His Commitment to Free-Market Principles into Further Question

Voters will be pardoned for speculating whether aliens have somehow captured Senator John McCain, nominally a Republican candidate for President, and replaced his mind with that of Democratic class-warrior candidate John Edwards.

The latest evidence came during the January 5, 2008 Republican candidates’ debate in Manchester, New Hampshire, when Senator McCain slurred the pharmaceutical industry as “the big bad guys.” Thus, in addition to his dubious positions on tax cuts, waterboarding of terrorists and McCain/Feingold’s free speech restrictions, he has now gone on record attacking America’s pharmaceutical companies, which constitute one of this country’s most innovative and valuable industries.

In doing so, Senator McCain also joined the chorus demanding importation of medicines from foreign countries, which is one of the most deceptive and dangerous policy ideas in our present political climate. Consider the following exchange between himself and Mitt Romney, in which McCain descends into his best conspiracy theorist impression:

McCain: Why shouldn’t we be able to reimport drugs from Canada? It’s because of the power of pharmaceutical companies…

Romney: Don’t turn the pharmaceutical companies into the big bad guys.

McCain: Well, they are.

Romney: No, actually, they’re trying to create products to make us well and make us better, and they’re doing the work of the free market. And are there excesses? I’m sure there are, and we should go after excesses. But they’re an important industry to this country. But let me note something else, and that is the market will work. And the reason healthcare isn’t working like a market right now is you have 47 million people that are saying, “I’m not going to play. I’m just going to get free care paid for by everybody else.” That doesn’t work. Number two, the buyer doesn’t have information about what the cost or quality is of different choices they could have. If you take the government out of it to a much greater extent, you’d get it to work like a market and we’ll rein in costs.

No, Senator McCain, pharmaceutical innovators are not “the big bad guys,” and importation of foreign drugs is a terrible idea.

In reality, America’s pharmaceutical and biotechnology companies invest literally billions of dollars each year to invent and perfect new medicines that save lives and allow Americans to live more comfortably, longer, and healthier. There is not a single person in America who hasn’t benefited personally from these remarkable innovations, or has family members or friends who have.

And while importation of drugs may superficially sound like a good idea, it is actually quite pernicious. Especially at a time when America’s trade deficit receives so much hysteria from politicians and the mainstream media.

For starters, importation of foreign drugs will flood the market with dangerous counterfeit knockoffs from across the globe. As tragically illustrated by recent stories of contaminated lead-paint toys, toothpastes, dog food and other products, this is a potentially serious problem. Further, even drugs imported from such countries as Canada often themselves originate from places like Pakistan, Bulgaria, Argentina and South Africa. This inherent safety risk precisely explains why every single Food & Drug Administration commissioner since 1969 has opposed importation.

Second, importation will undermine American medical innovation. The pharmaceutical industry remains one in which America continues to lead the world. It creates revolutionary life-saving and life-improving drugs, but this requires gigantic up-front investments of money, time and research. In 2006 alone, pharmaceutical innovators invested an estimated $55 billion in such research and development, and provided millions of valuable jobs. If our nation’s pharmaceutical and biotechnology companies suddenly cannot recoup their investments due to a flood of foreign counterfeits and artificially-discounted drugs, the reward for investing in innovation will wither along with thousands of high-paying and high-tech jobs. Obviously, this is hardly the time to be taking such a risk.

Third, allowing importation of foreign drugs will exacerbate our current litigation and “jackpot justice” crisis facing America and the healthcare industry. If pharmaceutical companies, pharmacists, hospitals and physicians are suddenly exposed to even more lawsuits because opportunistic trial lawyers blame them for harm caused by foreign counterfeits or knockoffs, healthcare costs and crippling runaway litigation will only skyrocket further.

Fourth, legalizing importation of foreign drugs will only increase the already-overburdened FDA’s caseload. In doing so, the FDA’s ability to protect American consumers’ safety will be further undermined.

Simply put, there is already too much regulation and persecution of the pharmaceutical industry, not too little. Allowing importations to flood the market and gain a free ride on the backs of American pharmaceutical innovators will only undermine this critical enterprise.

Senator McCain, please reconsider your slur against America’s invaluable pharmaceutical industry, and renounce your ill-advised position toward it and importation of foreign drugs. One irresponsible class-warrior candidate in the style of John Edwards is more than enough.