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Increasingly,

ing pain and death, he blames them for caus-

Introduction

ing pain and death.

policymakers

State officials voice similar criticism. West

treat the innova-

Few sectors of the economy have been

Virginia governor Bob Wise (D) says that

tive drug industry

more successful or provided greater benefits

pharmaceutical prices are "outrageous" and

than the pharmaceutical industry. Many

warns that big, brand-name drug companies

like a political

Americans owe their health and lives to new

are "going to be spreading lies and half-

piñata--whacking

products that emerge on a regular basis from

truths" in response to his state government's

efforts to control the prices they charge.4

it with accusa-

that industry. In the coming years genetic

research is likely to dramatically expand the

The rhetorical assault has been backed by

tions and threats

benefits of pharmaceutical research and

legislative attacks, which have left the phar-

while expecting

development.

maceutical companies under siege. One lob-

byist told the National Journal: "The industry

One might fairly expect most people,

it to yield its

especially those who are ill, to be grateful.

has gotten a lot of bad press, and it seems

treasured prizes.

However, demonstrators around the world

that, each day, there's a new headline. I think

are targeting the pharmaceutical industry--

it's going to be increasingly difficult to win

apparently for daring to sell the AIDS drugs

battles. Everybody's looking at the PhRMA

that it created at high cost. The tone for the

[Pharmaceutical Research and Manufact-

war on "Big Pharma" was set in the 2000

urers of America] companies as villains.

They're really getting nailed."5

presidential race, when then­vice president

Al Gore campaigned against drugmakers

On what seems to be a daily basis, both

with faux populist rhetoric: "Big tobacco, big

federal and state politicians are putting for-

oil, the big polluters, the pharmaceutical

ward proposals for various forms of price con-

companies, the HMOs, sometimes you have

trols, patent invalidations, and advertising

to be willing to stand up and say no, so fam-

restrictions. The hunt is on for more generous

ilies can have a better life."1 It was an aston-

drug benefits at lower prices. A potentially

ishing comparison that equated companies

unprecedented expansion of the Medicare

that make life-saving products with compa-

entitlement in the form of prescription drug

nies that are often accused of harming con-

benefits has become the top domestic policy

sumers. Yet in the same speech, the vice pres-

issue in Congress. Whether those benefits will

ident acknowledged "a time of almost

be managed in private competitive markets or

unimaginable medical breakthroughs"--pro-

subjected to centralized price controls remains

duced by the very companies he was attack-

to be seen. State legislators faced with bloated

ing.2 Although George W. Bush won the elec-

Medicaid program budgets have latched on to

tion, his administration largely abandoned

high drug prices as the key culprit. The politi-

its defense of drug patents at later meetings

cal appetite for increased Medicare and

of the World Trade Organization. In the fall

Medicaid drug benefits shows no sign of abat-

of 2001, Department of Health and Human

ing. Many officeholders hope to feed it with a

Services secretary Tommy Thompson implic-

steady diet of mandatory price ceilings, weak-

itly threatened to override Bayer's patent for

ened patent rights, and restrictive drug formu-

Cipro if the company did not sharply cut the

laries (lists of covered and preferred drugs).

drug's price during negotiations to purchase

Increasingly, policymakers treat the innovative

a large quantity for protection against the

drug industry like a political piñata--whack-

new threat of anthrax bioterrorism.

ing it with accusations and threats while

Legislators have been even more hostile.

expecting it to yield its treasured prizes.

Rep. Bernard Sanders (I-Vt.) argues that

Others fault drug companies for advertis-

because people can't afford necessary drugs,

ing their wares too directly and aggressively

"many are suffering and even dying."3

to consumers, claiming that such advertising

Instead of lauding drugmakers for prevent-

merely increases purchases of high-priced

2