CPI #9

July 14, 2000
  • Pharmaceutical industry’s profit margin in 1999: 18.6%.1
  • Fortune 500 median profit margin the same year: 5%.2
  • Ratio of pharmaceutical industry’s marketing and administration expenses to research and development: 2:1.3
  • Number of lobbyists industry hired to work on Medicare prescription drug coverage in 1999: 297.4
  • Amount pharmaceutical industry has spent on campaign contributions since 1993: $33.4 million.5
  • Lead sponsor of pro-industry legislation on Medicare prescription drug coverage that would do little to contain escalating costs: Rep. Bill Thomas (R-Calif.).6
  • Top recipient in House of Representatives of pharmaceutical campaign contributions since 1993: Rep. Bill Thomas (R-Calif.).7
  • Number of people covered by Medicare: 39 million.8
  • Percent of prescription medicines used in the U.S. by people ages 65 and older: >1/3.9
  • Median income of persons 65 and older: $13,768.10
  • Likelihood that a person with an income of $13,768 makes a campaign contribution of at least $200 to a congressional campaign: well under 5%.11

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    1 “How The Industries Stack Up,” Fortune, April 17, 2000, p. F25. Represents profits as percent of revenues.
    2 ibid.
    3 Gardiner Harris, “Drug Firms, Stymied in the Lab, Become Marketing Machines,” The Wall Street Journal, July 6, 2000, p. 1
    4 “Addicting Congress: Drug Companies' Campaign Cash & Lobbying Expenses,” Public Citizen’s Congress Watch, July 2000.
    5 ibid. Includes contributions to candidates and parties between 1993 and May 2000.
    6 Thomas is lead sponsor of H.R. 4680, which passed the House on June 28, 2000, by a vote of 217 - 214.
    7 Thomas ranked first in the House, with $160,665 in contributions from the pharmaceutical/biotech industry, between 1993 and May 1, 2000. “Addicting Congress,” Public Citizen’s Congress Watch, July 2000.
    8 Health Care Financing Administration, www.hcfa.gov/medicare/medicare.htm . Medicare provides health insurance to people age 65 and over, to people with permanent kidney failure, and certain people with disabilities.
    9 David Brown, “For Medicare, An Inadequate Prescription,” The Washington Post, June 26, 2000, p. A1.
    10 “A Profile of Older Americans 1999,” AARP, research.aarp.org/general/profile99.html.
    11 A survey of donors of $200 or more to congressional campaigns in the 1996 elections showed that five percent reported an income of $49,999 or less. Therefore, the likelihood that a person making $13,768 makes donations would be even smaller. John Green, et. al., “Individual Congressional Campaign Contributors: Wealthy, Conservative and Reform-Minded,” Joyce Foundation, June 1998.