The Food and Drug Administration (FDA) is undoubtedly the single most important government agency interacting with pharmaceutical companies in the United States. The FDA not only must approve all Investigational New Drug Applications and the applications for marketing, but also all supplemental applications for changes in New Drug Applications. The FDA also monitors prescription drug advertisements and promotions, and has the authority to seek to remove drugs from the market. It also has authority over foods and food additives, cosmetics, medical devices, radiological health products, and veterinary products. Section 7 on Regulatory Affairs Activities and Issues covers this area in greater detail. The FDA is headed by a single Commissioner and each category of products (e.g., drugs, foods, biologics, veterinary drugs and devices) is overseen in its own center, whose director reports to the Commissioner. Much of the drug approval activities of the FDA are financed by fees paid by the applicants.

The Patent and Trademark Office reviews and approves three types of patents. They are (in decreasing order of their ability to protect the drug and its commercial value) (a) compound patent (i.e., overall composition of matter patent), (b) use of a compound for a specific purpose (i.e., “use” patent), and (c) procedural methods used in manufacture (i.e., process patent).

The Department of Agriculture (DOA) must approve the importation of biological products into the United States. Products from countries with certain diseases (e.g., hoof and mouth disease) may be quarantined for a period of time.

The Federal Trade Commission (FTC) monitors and reviews advertisements for over-the-counter drugs and devices and other consumer products. (The FDA has jurisdiction over the promotion of prescription products.)

The Environmental Protection Agency (EPA) monitors materials and the environment involved in manufacturing processes and the waste products produced. These must meet certain rigid standards to protect the health and welfare of employees and the public. Both radioactive and nonradioactive wastes are monitored. Radioactive material issues are also dealt with by nuclear regulatory agencies.

The Occupational Safety and Health Administration (OSHA) monitors workplace practices for their effects on the safety and health of employees. There is some overlap with the authority of the EPA.

The National Institutes of Health (NIH) frequently interacts with research and development-based companies to collaborate in joint development of drugs [e.g., epilepsy drugs in conjunction with the National Institute of Neurological Diseases and Stroke (White 1985), anticancer drugs in conjunction with the National Cancer Institute (Schepartz, 1985)]. The institutes in NIH are primarily concerned in their collaborations with pharmaceutical companies with conducting large (or small) clinical trials. They are not generally concerned with the development of new drugs. When a chemical seems to have potential for commercial development it is generally licensed to a commercial company.

The Drug Enforcement Agency (DEA) monitors the use of drugs with abuse potential. This includes the production and research of such drugs. DEA puts such drugs into one of five “schedules” based on their abuse potential. Scheduled drugs include drugs of potential or actual abuse. DEA tracks all scheduled substances that come into the company (e.g., as raw products or drugs to be made into combination products) and also all scheduled drugs that leave the company as finished goods. The DEA occasionally audits the company’s records of scheduled drugs and inspects their facilities.

The United States Post Office (USPO) interacts with pharmaceutical companies when products or promotional materials are shipped in interstate commerce. The USPO monitors and reviews fraudulent practices that use the mail system and can seek to bring enforcement action.

The Office of Inspector General (OIG) in the Department of Health and Human Services investigates cases of fraud against healthcare programs, such as when a company overcharges the government for a product or when a company promotes a product
off-label, thereby causing the government to reimburse for off-label uses. OIG investigations have led drug companies to be fined billions of dollars and to sign corporate integrity agreements that are intended to preclude fraudulent practices.

All legal actions taken by the government, regardless of the agencies whose laws are violated are brought by the Department of Justice, which has its main office in Washington, DC, but which also oversees the offices of US attorneys across the entire United States. The Department of Justice is the government’s lawyer.

Other agencies that interact with pharmaceutical companies include: United States Customs, Department of Treasury, Nuclear Regulatory Commission, Consumer Products Safety Commission, and the Equal Employment Opportunity in the Department of Labor. Nongovernmental organizations whose findings and recommendations are accepted by the government include the US Adopted Names Council (see Chapter 95) and the US Pharmacopeial Convention, which is discussed in several chapters.

There has been an increasing involvement between individual pharmaceutical companies, as well as the Pharmaceutical Research and Manufacturers of America (PhRMA), with state governments during the past decade. Many people attribute this to greater decentralization of government, promoted by the Executive Branch of government. In addition, there has been frustration by many state legislatures over the failure of the federal government to control healthcare costs, which often must be paid by the state governments. There has been a great deal of cooperation between individual companies in seeking to monitor and influence state activities.

The main activity of lobbyists is to influence legislation and legislators by presenting the industry’s position and reasoning on an issue or that of the specific company that the lobbyist represents. Most of the federal lobbying is conducted in Washington, DC, where almost all large and some mid-sized companies have offices. Lobbying is also conducted in each of the state legislatures where legislation has been or will be introduced that could affect the industry. Most large companies have one or more regional offices to coordinate these activities. The amount of effort expended in these efforts is significant and the financial well being of companies is dependent on the outcomes of these efforts. The large trade associations also have their own federal and state lobbyists and Policy departments that help craft the messages and documents needed by the lobbyists. Lobbyists deal in series of “talking points” and usually two or three key messages that they seek to deliver to staff and legislators. In some cases, they help craft the legislation under direction of the legislator.

It is also common for the Chief Executive Officer (CEO) of a company, even the largest multinational companies, to personally lobby important legislators in Washington, DC. Sometimes, the trade association will organize a group meeting at which several Chief Executive Officers attend. These meetings may involve senior members of the Executive branch when necessary, and it is common for the FDA Commissioner to attend information sharing sessions either at PhRMA (or other trade associations) or at the FDA.

Testifying at Congressional sessions is another type of lobbying, when the witness from industry presents information on behalf of the company or industry.

Staying on message is the main mantra of lobbyists and they use standard techniques to do this (e.g., broken record, having constituents from the legislator’s district become involved whenever possible). While most pharmaceutical companies are in general agreement on many issues there are some issues on which their interests greatly diverge. For example, there are disagreements over policies for selling generic drugs and “generic biologics.”

PhRMA often will form a task force in response to a major issue or problem at the state level. Such task forces can be rapidly mobilized to take an organized approach when proposals are initiated by state legislative committees. These task forces will include members of PhRMA‘s research-based companies and uses PhRMA as an umbrella organization. The task force usually plans their approach to include both direct and indirect lobbying efforts.

In terms of direct lobbying, PhRMA assigns its members to visit different key legislators and their aides. In some situations, the legislative aides are more important to lobby than are the legislators because aides are often directly responsible for developing policy. Direct lobbying is also conducted at social events. This allows the lobbyist and legislator to meet in a more informal setting than in the state capitol or their offices and also provides an occasion to develop a better understanding of each other’s position and character. The relationship that develops usually improves the quality of subsequent interactions when the lobbyist meets the legislator at the capitol building in a more formal environment. Spouses and aides of the legislators may also be invited to this type of social event. This aspect of lobbying is conducted to a different degree by various companies, depending on their budgets for this type of activity and their interest in direct lobbying activities.