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Pharmaceutical Research and Manufacturers Association of America (PhRMA)

In 1958 the main American pharmaceutical companies formed a representative association, then called the Pharmaceutical Manufacturers Association. The name was changed to the Pharmaceutical Research and Manufacturers of America in 1994. The association is governed by a 31-member board of directors and an 18-Member Executive Committee. The association is headquartered in Washington DC, with offices throughout America and in Tokyo, Japan. Members of PhRMA include: Pfizer, GlaxoSmithKline, Schering-Plough Corporation, Wyeth, Novartis, AstraZeneca, Bayer, Bristol-Myers Squibb, Merck and many others.

The position of PhRMA regarding intellectual property law is one of lobbying for stronger terms of patent protection, and the extension and harmonization of these IP rights on an international level. Its statement of principle on its website declares that its 'mission is winning advocacy for public policies that encourage the discovery of life-saving and life-enhancing new medicines for patients by pharmaceutical/biotechnology research companies'. It further state that: 'To accomplish this mission, PhRMA is dedicated to achieving in Washington DC, the United States and in the entire world the following: - Broad patient access to safe and effective medicines through a free market, without price controls - Strong intellectual property incentives, and -Transparent, efficient regulation and a free flow of information to patients

IP lobbying and legislative achievements

From the 1970s the American pharmaceutical industry began to campaign vociferously for increased intellectual property protection (given the large costs of research and development and of bringing products to market). By the 1980s PhRMA had begun to play a key role in advising the US government on drug, trade and intellectual property. As Robert Weissman describes it, the ‘American pharmaceutical industry trade association...became one of the most aggressive and high profile trade groups in Washington’. From 1981 (to 1985) Gerald Mossinghoff - former Assistant Commerce Secretary and Commissioner of Patents and Trademarks under Reagan - became its President. PhRMA representatives (as well as those from individual pharmaceutical companies) gained seats in the network of private advisory boards that help form US government policy. For instance, a technical advisory committee to the United States Trade Representative (USTR)was joined by senior officials from PhRMA, as well as representatives of individual companies including Pfizer, DuPont, Monsanto, Proctor and Gamble and Immunon Technologies.

As well as direct lobbying of government and Congress officials,including testifying before Congressional committees, PhRMA also funded numerous academic studies and articles to support a ratcheting up of patent standards. These studies framed increased patent protection in both moral and economic terms. They argued that a lack of sufficiently stringent patent protection cost American pharmaceutical companies billions of dollars annually. For instance, a Merck study undertaken in 1986 estimated the cost to the drug manufacturing industry to be 6 billion dollars a year. In terms of the moral issues involved in increased IP protection, PhRMA both portrayed generic drug companies and the nations that allowed them as 'pirates' and their enablers, while simultaneously arguing that attaching higher levels of patent protection to pharmaceuticals was actually the morally correct thing to do; asserting that such rights would encourage domestic and cross-national investment in research and technology transfer to Third World countries by high-technology MNCs.

These early PhRMA campaigns were incredibly successful at shaping the trade policy of successive US governments, including, most notably, the successful conclusion of the 1994 TRIPS IP agreements. These included patent terms that were highly advantageous to PhRMA's members, including a uniform term of patent protection of twenty years, global patent rights, enforceable 'without discrimination as to place of invention, field of technology, or whether the products are imported or locally produced' and exclusive commercial rights for the patent holder.

Current facts about and campaigns

These PhRMA campaigns and legislative achievements have cemented a situation in which the American pharmaceutical industry is one of the most profitable national sectors in the world. To give an example of the supra-normal profit margins American drug companies enjoy on their products, the recommended industry price of the drug Baralgan Ketone was placed at more than Rs24,000 per kg, while the estimated fair price - factoring in all costs, marketing and distribution expenses - was placed at Rs1810.20 per kg.

To get an idea of the scale of the PhRMA lobbying operation currently, we can look at recent figures for its activities in its home country the US alone. In 2010 PhRMA spent US$21,740,000 on lobbying in the US, employing 29 lobbyists on its staff. In 2011 it had 20 lobbyists on staff and lobbied for 22 bills, down from 51 in 2010. In 2010 PhRMA gave a total of $58,800 to House candidates and $65,000 to Senate candidates.

In terms of global IP, PhRMA has found itself more on the defensive in the past decade or so, forced to defend the patent terms of TRIPS against strong challenge from non-governmental organisations (NGOs) on public health grounds. In November 2001 for instance, PhRMA issued a report trying to disseminate the idea that problems of access to HIV/AIDS drugs were caused by 'administrative and governance failures, poverty and corruption' instead of current standards of IP protection. While seeking to justify its past gains, PhRMA also lobbies for 'TRIPS-Plus' trade agreements with even higher levels of patent protection, such as the Korea-US Free Trade Agreement. It is currently involved in seeing a similar agreement concluded with Vietnam, and in opening up the access of large drug companies to the New Zealand market, currently limited by the state-owned central drug-purchasing agency Pharmac.

This page was last edited on 30 April 2012, at 16:23.

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