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US ELECTION SPECIAL : The world waits and watches....

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By Stephen Foley in New York
November 5 2006

Drug company chiefs dig deep to get a result they like in the Senate

Executives at the UK's three biggest pharmaceuticals companies have been funnelling thousands of dollars from their personal fortunes to help the re-election campaigns of industry-friendly politicians in the US.

David Brennan, the chief executive of AstraZeneca, has emerged as one of the most generous donors to candidates in the midterm elections, in which drug prices have emerged as a big political issue. He and his wife have contributed a total of $31,000 (£16,000) to individual politicians and to Republican party schemes such as the Majority Initiative to Keep Electing Republicans.

Mr Brennan said he "supports candidates who recognise and value the importance of innovative medicines and innovative companies in enhancing people's health".

A Democrat takeover of the House of Representatives - which still seems odds-on, according to weekend polls - could trigger an assault on the pharmaceuticals industry and would likely unseat several of its staunchest defenders.

Political candidates are required to publish details of all donations, which are capped at $10,000 from any single source. Donations may include straightforward cheques or payments for attendance at breakfasts and dinners used as industry networking events.

The chairman of Shire Pharmaceuticals, James Cavanaugh, has together with his wife, contributed $36,500 to the Republican Party and to candidates in Pennsylvania, where the company recently located its North American headquarters thanks to tax and training grants negotiated with local politicians.

And all of GlaxoSmithKline's US-based senior executives, including the company's chief executive, Jean-Pierre Garnier, have contributed four-figure sums to political campaigns. According to an analysis of data compiled by the Centre for Responsive Politics, Mr Garnier had donated a total of $5,000 to the campaigns of three sitting Senators, including one Democrat, since the start of the current electoral cycle two years ago.

David Stout, GSK's head of pharmaceuticals; Christopher Viehbacher, president of the company's US pharmaceuticals business; and David Pulman, who runs GSK's manufacturing arm, were also significant donors. Daniel Phelan, GSK's head of human resources, contributed $2,000 to back the Republican Senator for Pennsylvania, Rick Santorum.

Pharmaceutical industry donations have become a central issue in Mr Santorum's campaign for re-election. His opponent, Bob Casey, has accused him of putting his drug-sector patrons ahead of senior citizens. Mr Santorum was a leading player in the creation of a new federal subsidy for senior citizens' drug bills, but helped shape the system in a way that benefited pharmaceutical companies.

The industry successfully lobbied for the Medicare drug benefit plan to be administered locally by the private sector. The Democrats are promising to legislate to allow central purchasing of drugs by the federal government, which at a stroke will turn the government into the nation's biggest single purchaser of medicines, with the power to demand big cost reductions from the industry.

Mr Santorum is behind in the polls and his race has become the second most expensive in the country. The pharmaceuticals industry has funded his television ads and helped get-out-the-vote efforts.

Mr Santorum's campaign has been the recipient of cash from all three FTSE 100 drug company chief executives in this electoral cycle. Mr Garnier gave $2,000; Mr Brennan contributed $4,100; and Shire's Matthew Emmens wrote a cheque for $500.

About three-quarters of the contributions from the drug industry go to Republican candidates. As well as executives' donations, GSK and AstraZeneca have given hundreds of thousands of dollars through their political action committees, which solicit contributions from staff, suppliers and other stakeholders. GSK's action committee has contributed $2.1m in two years, while AstraZeneca's has chipped in with $806,000.

Matt Cabrey, who will chair the new political action committee being set up by Shire, said: "It is important to have a vehicle where you can educate and communicate with legislators on issues that are important to you. If you call on your legislator for support, frankly you can expect that they may come back to you and ask for your support."

Executives at the UK's three biggest pharmaceuticals companies have been funnelling thousands of dollars from their personal fortunes to help the re-election campaigns of industry-friendly politicians in the US.

David Brennan, the chief executive of AstraZeneca, has emerged as one of the most generous donors to candidates in the midterm elections, in which drug prices have emerged as a big political issue. He and his wife have contributed a total of $31,000 (£16,000) to individual politicians and to Republican party schemes such as the Majority Initiative to Keep Electing Republicans.

Mr Brennan said he "supports candidates who recognise and value the importance of innovative medicines and innovative companies in enhancing people's health".

A Democrat takeover of the House of Representatives - which still seems odds-on, according to weekend polls - could trigger an assault on the pharmaceuticals industry and would likely unseat several of its staunchest defenders.

Political candidates are required to publish details of all donations, which are capped at $10,000 from any single source. Donations may include straightforward cheques or payments for attendance at breakfasts and dinners used as industry networking events.

The chairman of Shire Pharmaceuticals, James Cavanaugh, has together with his wife, contributed $36,500 to the Republican Party and to candidates in Pennsylvania, where the company recently located its North American headquarters thanks to tax and training grants negotiated with local politicians.

And all of GlaxoSmithKline's US-based senior executives, including the company's chief executive, Jean-Pierre Garnier, have contributed four-figure sums to political campaigns. According to an analysis of data compiled by the Centre for Responsive Politics, Mr Garnier had donated a total of $5,000 to the campaigns of three sitting Senators, including one Democrat, since the start of the current electoral cycle two years ago.

David Stout, GSK's head of pharmaceuticals; Christopher Viehbacher, president of the company's US pharmaceuticals business; and David Pulman, who runs GSK's manufacturing arm, were also significant donors. Daniel Phelan, GSK's head of human resources, contributed $2,000 to back the Republican Senator for Pennsylvania, Rick Santorum.

Pharmaceutical industry donations have become a central issue in Mr Santorum's campaign for re-election. His opponent, Bob Casey, has accused him of putting his drug-sector patrons ahead of senior citizens. Mr Santorum was a leading player in the creation of a new federal subsidy for senior citizens' drug bills, but helped shape the system in a way that benefited pharmaceutical companies.

The industry successfully lobbied for the Medicare drug benefit plan to be administered locally by the private sector. The Democrats are promising to legislate to allow central purchasing of drugs by the federal government, which at a stroke will turn the government into the nation's biggest single purchaser of medicines, with the power to demand big cost reductions from the industry.

Mr Santorum is behind in the polls and his race has become the second most expensive in the country. The pharmaceuticals industry has funded his television ads and helped get-out-the-vote efforts.

Mr Santorum's campaign has been the recipient of cash from all three FTSE 100 drug company chief executives in this electoral cycle. Mr Garnier gave $2,000; Mr Brennan contributed $4,100; and Shire's Matthew Emmens wrote a cheque for $500.

About three-quarters of the contributions from the drug industry go to Republican candidates. As well as executives' donations, GSK and AstraZeneca have given hundreds of thousands of dollars through their political action committees, which solicit contributions from staff, suppliers and other stakeholders. GSK's action committee has contributed $2.1m in two years, while AstraZeneca's has chipped in with $806,000.

Matt Cabrey, who will chair the new political action committee being set up by Shire, said: "It is important to have a vehicle where you can educate and communicate with legislators on issues that are important to you. If you call on your legislator for support, frankly you can expect that they may come back to you and ask for your support."



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