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August 4, 2004

CONTACT: Jerry Flanagan (310) 392-0522 ext. 319

Consumer Alert!: Drug Company Front Group -- "CURES" -- Opposes Drug Reimportation Legislation

A pharmaceutical front group, "CURES," bought a full page add in the Sacramento Bee today opposing legislation to reimport cheaper U.S. made prescription drugs from Canada. The group is funded by the pharmaceutical industry and has political ties to both the Schwarzenegger and Bush Administrations, according to the Foundation for Taxpayer and Consumer Rights (FTCR). Coalition members include drug patent owners, pharmacists, Bush Administration appointees, and financial contributors to Governor Schwarzenegger. FTCR asked television and news media to alert consumers of the group's conflicts of interest.

"The pharmaceutical industry has cobbled together another front group to hide their political agenda to keep drug prices high," said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights. "Consumers should know that these groups do not represent the needs of average Californians but the interests of the world's most profitable industry."

CURES received seed money from the California Healthcare Institute, a pharmaceutical trade association, and BIOCOM, a bio-tech trade association.

Currently, the U.S. Department of Veterans Affairs and the Canadian government save 30-60% off the cost of U.S. made drugs as a result of negotiating lower rates for bulk quantities. Later today, the Assembly and Senate Appropriations Committees will vote on legislation to establish a state website with links to Canadian pharmacies (SB 1149 -- Ortiz, Sacramento) and legislation allowing a bulk-purchasing program led by CalPERS (AB 1958 -- Frommer, LA).

The coalition's central argument against reimportation, that research and development of new drugs will be significantly impacted by lower cost drugs from Canada, ignores the fact that drug companies spend two to three times on marketing new drugs than they do on research and development.

Members of the CURES coalition have deep financial and political ties with the pharmaceutical industry and Bush and Schwarzenegger Administrations, according to FTCR:

Stephen Chang, president, CURES

Stephen Chang is CEO of Astral Therapeutics a San Diego company that develops immunotherapeutics and holds over 40 therapeutic drug patents worldwide. Chang was formerly a Chief Financial Officer for the pharmaceutical giant Schering Plough and Director of Research for Chiron.


Art Whitney, Long-Term Care Coalition

Art Whitney is president of the Pacific West Pharmacy and personally gave $5,000 to Schwarzenegger's "Total Recall" fundraising committee. Pacific West Pharmacy contributed $21,200 to the "Californians for Schwarzenegger Committee" and 8 other Pacific West Pharmacy employees gave $1000 each to the "Californians for Schwarzenegger" committee.

Source: California Secretary of State at and

David Breslow, California Pharmacists Association

The California Pharmacists Association has a direct financial interest in slowing the importation of drugs from outside the country because when drugs are shipped directly to consumers, pharmacists cannot collect a per prescription dispensing fee normally charged to consumers when purchasing drugs at pharmacies.

The Bush Administration's Department of Health and Human Services (HHS) and Food and Drug Administration (FDA) recently launched a national campaign with the Association of Boards of Pharmacy (NABP) to discourage the reimportation of drugs from Canada.

The pharmacists and Bush Administration officials say drug importation is unsafe despite the fact that more than 40% of prescription drugs sold in Canada are produced by U.S. companies.

Nekita "Nicki" Hobson, board member, National Association of Cancer Patients (NACP)

Nicki Hobson was a former executive at U.S. Ecology Inc., a nuclear waste disposal company, and a former public affairs director for a fusion research and nuclear energy technology company, GA Technologies.

NACP's co-founder Bill Otterson was a Wilson-appointed member of the Southwestern Low-Level Radioactive Waste Commission, and director of CONNECT, a San Diego consortium of waste disposal, nuclear energy, and pharmaceutical firms.

Breast Cancer Action, a non-profit breast cancer advocacy organization, has been critical of Hobson and NACP for supporting the Ward Valley nuclear waste disposal site near Needles, California 19 miles from the Colorado River, a major source of drinking water for southern California. Breast Cancer Action claims that, "proponents of the project � have created a special interest group called the National Association of Cancer Patients (NACP)�The NACP claims to represent cancer patients. In reality, it represents the proponents of the Ward Valley dumpsite, whose personal, business and financial interests would be furthered by building the dump�"


Abner Mason, executive director, AIDS Responsibility Project

Abner Mason is a senior Bush Administration advisor, was appointed to the Presidential Advisory Council on HIV and Aids by the Bush Administration, and formerly a senior policy and political advisory to Massachusetts Acting Governor Jane Smith.


Each of the coalition's arguments against drug reimportation -- safety, impact on research and development, and availability of cancer and aids drugs fail hold up under scrutiny:

** A 2001 report based on analysis of companies' SEC filings and annual reports, on average, 11 percent of revenues went to research and development (R&D;), and 27 percent went to marketing, advertising, and administration.

The companies themselves aggregated the figures on marketing, advertising, and administration. "Profiting from Pain: Where Prescription Drug Dollars Go," July 2002. Available at

** Federally-funded research has played a major role in private sector research and development, contributing to medicines for conditions including cancer and AIDS.

Source: Michael E. Gluck, Ph.D., "Federal Policies Affecting The Cost and Availability of New Pharmaceuticals," prepared for The Kaiser Family Foundation, July 2002, p. 18. Available at

** The pharmaceutical industry has consistently been the most profitable industry over the past eight years, with profits four to five times higher that of the average Fortune 500 firm

Source: Fortune 500 Rankings, 2003.

The federal government has consistently yielded to the public pressure of the pharmaceutical industry. In fact, the recent Medicare prescription drug law guarantees a financial windfall for pharmaceutical companies by barring Medicare from negotiating bulk discounts.

Pharmaceutical companies contributed $27 million in individual, PAC and soft money contributions to Congress in the 2002 election cycle -- 75% to republicans. In 2004, drug companies have contributed more than $7 million to national officeholders -- 66% to Republicans.

According to analysis by FTCR, Governor Schwarzenegger has received over $325,000 in campaign contributions from pharmaceutical companies.

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The Foundation for Taxpayer and Consumer Rights is a non-profit and non-partisan consumer advocacy organizations. For more information please visit us on the web at: