Big Pharma opens wallet to Dems
Liberals have lost their reputation as the long-standing foes to drugmakers as party lines become blurred with McCain.
NEW YORK (CNNMoney.com) -- Democrats have long served as the traditional enemy of Big Pharma, but in this presidential campaign, the left is taking the lion's share of drugmaker money.
Democratic senators Barack Obama and Hillary Clinton are the top recipients of donations from the pharmaceutical industry, according to The Center for Responsive Politics, a non-profit, non-partisan research group in Washington, D.C. Meanwhile, donations to Sen. John McCain, who was recently endorsed by President Bush as the official Republican candidate, pale in comparison.
Obama maintains a slight edge over his Democratic rival, with $181,000 in Big Pharma donations through Jan. 31, compared with Clinton's $174,000, according to the center. McCain is far behind with $44,000.
This is in spite of the fact that all three candidates have consistently bashed the pharma industry and vowed to lower drug prices, which would take a bite out of corporate profits.
But it wasn't always this way. Big Pharma, voting with its wallet, used to be more of an enthusiastic supporter for the Grand Old Party.
In the 2004 presidential election, drugmakers donated $516,000 to the Bush campaign, a huge increase over the $280,000 provided to Sen. John Kerry, the Democratic candidate from Massachusetts, according to the center.
There are two reasons for the recent shift in funding. The Bush administration may still control the White House, but Republicans no longer control Congress. Democrats hold the majority in the House, and the parties are evenly split in the Senate. Drugmakers could be trying to secure access to the ruling party by courting their traditional enemies.
"Since the Democrats took control of Congress in 2006, money has shifted away from Republicans, to the Democrats who hold the keys to the kingdom," said Massie Ritsch, a spokesman for The Center for Responsive Politics. "The pharmaceutical industry is one that would lean Republican if it didn't have to make friends with the party that's in power right now."
Merck spokesman Ron Rogers said his company has never announced support for a specific candidate and "has always sought to work with both Republicans and Democrats on the issues that affect pharmaceutical innovations whether one party or the other has controlled the Congress of White House."
Schering-Plough spokesman Steve Galpin said his company has not donated to any presidential candidates. Other drugmakers contacted on this issue - Pfizer and Eli Lilly & Co. - did not comment by press time.
Secondly, the distinctions have blurred between the two parties' relationship with big business. Democrats have traditionally been seen as enemies to the pharmaceutical industry, while Republicans are supposed to be their allies.
"I think what you can say about the philosophical divide is that the Republicans as a party believe in free markets and the Democrats want to socialize our healthcare system," said Barbara Ryan, pharma analyst for Deutsche Bank North America.
But with McCain as the conservative contender for the White House, the issues are no longer black and white. Ryan noted that the current campaign lacks hard and fast party differences in healthcare. In fact, the policies from of Clinton, Obama and McCain are uniformly unfriendly toward Big Pharma.
Much of their political ire is focused on drug prices. All the candidates co-sponsored a bill early last year to allow the re-importation of U.S.-made drugs back from Canada, where they're cheaper. But the bill failed to pass the Senate.
McCain, who has described himself as "the biggest enemy of the pharmaceutical industry in Washington," has been particularly vocal on re-importation.
"Why shouldn't we be able to re-import drugs from Canada?" he asked during the New Hampshire republican debates in January. "It's because of the power of the pharmaceutical companies."
"Don't turn the pharmaceutical companies into the big bad guys," countered Mitt Romney, the former presidential candidate who has since dropped out of the race.
"Well, they are," said McCain.
Campaign crosshairs are also focused on the Bush administration's ban on drug-price negotiations between the government and drug companies. This ban was included in the 2003 Medicare Modernization Act. Removing it could result in lower drug prices, which would put the squeeze on pharma sales.
Obama and Clinton have clearly stated that they oppose the ban on price negotiations.
"[Clinton] has been very much against the non-negotiation ban, said Gene Sperling, her economic advisor, as well as former director of the National Economic Council for former President Bill Clinton. "She feels that that puts the government in a worse position than a big company."
Obama, on his campaign Web site, has vowed to repeal the ban that prevents the government from negotiating with drug companies, estimating it could result in savings of up to $30 billion for patients.
McCain's stance on this issue isn't clear. When Democrats failed to pass a bill last year that would have eliminated the ban, he wasn't present for the vote. McCain's office did not return calls and emails asking about his position on this issue.
But even with all the political rhetoric, Wall Street doesn't seem to be paying attention.
Paul Alan Davis, manager of Charles Schwab's $800 million healthcare portfolio, which includes holdings in Pfizer (PFE, Fortune 500), Merck (MRK, Fortune 500), Johnson & Johnson (JNJ, Fortune 500), Schering-Plough (SGP, Fortune 500) and other major pharma companies, said he wasn't sure which of the candidates posed the biggest shake-up for the industry - if at all. He also said that the campaign is not a factor in his investment decisions.