October 1, 2001

Consumer Federation of America
Families USA
National Consumers League
Public Citizen
United Auto Workers

Letter to Newsweek | Citizens for Better Medicare | PhRMA Letter | Conference Invitation

Richard M. Smith
Chairman and Editor-in-Chief
251 West 57th Street
New York, NY 10019

Dear Mr. Smith:

Newsweek magazine recently breached ethical standards in a virtually unprecedented manner: Sponsorship of its most recent Special Edition, "Health for Life," was conferred exclusively on the pharmaceutical drug lobby that has a public policy axe to grind and that used its unique relationship with Newsweek to promote its public policy agenda. Newsweek also worked with the drug lobby to organize a conference in Washington, D.C. and also appears to have aided the drug industry's direct mail lobbying efforts.

The drug lobby, called the Pharmaceutical Research and Manufacturers of America (or PhRMA), is the sole advertiser in Newsweek's Special Edition that, perhaps not surprisingly in light of the drug lobby's payments, contains numerous articles and advertisements extolling the virtues of recent and prospective drug developments. PhRMA, it should be emphasized, sells no commercial products that it might wish to advertise but, instead, is the lobbying arm for the pharmaceutical industry. It sells a message about the value of prescription drugs and the need to avoid legislation that will interfere with high profits for the industry. Thus, in its work with PhRMA, Newsweek allowed the drug lobby to use a supposedly independent media outlet to further its public policy objectives. We believe that, in doing so, Newsweek violated the ethics of responsible journalism.

In the last several years, there have been extensive public policy and legislative debates about issues relating to prescription drug coverage and pricing. These debates have focused on a myriad of proposals, including: adding a prescription drug benefit to Medicare; exposing and remedying drug companies' abusive practices that prevent cheaper generic drugs from coming to market; moderating high and fast-rising drug prices; monitoring misleading direct-to-consumer advertising designed to stimulate increased drug sales; and allowing the re-importation of lower-cost prescription drugs from other countries.

In all of these policy debates, the drug lobby responds with a stock refrain, repeated like a mantra, stating that these consumer-friendly measures would harm the research and development (R&D) needed to find new cures for existing health conditions. (Never mind that studies have shown that some of our most important prescription drugs were developed with support from federal taxpayer dollars funding the National Institutes of Health. Never mind that virtually all of the major drug companies spend two to three times as much on advertising, marketing, and administration as they spend on R&D.) With its "R&D, R&D" battle cry, the drug lobby continues to ward off legislative proposals designed to make pharmaceuticals affordable.

It is in this context that Newsweek's Special Edition must be seen. Creating an issue that contains many articles highlighting the glories of new medical and pharmaceutical advances, with advertising in support of this theme exclusively from the very lobby that misleadingly uses "R&D" as an excuse to defeat consumer-friendly legislation, stretches the bounds of journalistic ethics and does a great disservice to the public.

At a time when other media outlets and many in the medical community - including all of the major medical journals, the American Medical Association, and many medical schools - are questioning the ethical dangers of financial ties to the drug industry, it is astounding that Newsweek developed an exclusive advertising relationship with the drug lobby that allowed it to promote its policy agenda.

Nowhere in Newsweek's Special Edition is there any discussion about increasingly unaffordable drug prices. Nowhere in this Special Edition is there any indication that generic drugs can save people money, and how the drug companies' documented abuses of federal patent laws prevent such generic drugs from coming to market. Indeed, nowhere in this Special Edition is there any hint of any policy issues that the drug lobby finds troublesome.

To make matters worse, Newsweek decided to follow up this Special Edition with a conference in Washington, D.C. that it co-sponsored with the drug lobby. One of the promotional pieces advertised three speakers for that conference - postponed because it was scheduled for September 11th - two of whom came from the drug industry.

It should be no surprise, therefore, that the drug lobby viewed this new relationship with Newsweek as a propaganda coup. Shortly after Newsweek's Special Edition was released, 12 copies of the issue were sent to each Congressional office with a letter from PhRMA's President, Alan F. Holmer, encouraging Congressional policymakers to "share it with your family, friends and colleagues, and use it when you make health care decisions." (See attached letter.) In addition, Citizens for Better Medicare, a lobbying front group founded and funded by PhRMA, used Newsweek's Special Edition as a direct mail lobbying piece. In its cover letter, Citizens for Better Medicare urged Newsweek readers to, "Make sure your elected officials know you want access to the most innovative and effective medical tools available - most importantly, that you want coverage for the life-enhancing prescription medicines described in this issue." (Also see attached copies of materials from Citizens for Better Medicare mailing.)

It is, thus, a great disappointment that a magazine of Newsweek's stature would allow itself to be used by a political lobbying group. This amounts to a breach of public trust. As a result, we believe that you owe your readers and the public answers to the following questions:

1. What role did PhRMA as well as its agents and associates play in developing the selection of articles for the Special Edition? Did your writers know who sponsored the edition when they wrote their articles?
2. How much money did PhRMA and/or its member organizations pay in advertising for this edition?
3. Was the direct mail letter sent to all or a specific segment of Newsweek subscribers, and did Newsweek supply a list of all or some of its subscribers? Was the Citizens for Better Medicare direct mail letter prepared or mailed in coordination with Newsweek? If so, who was the target audience for this letter?
4. Who originated the idea for PhRMA to be the sole advertiser for the Special Edition? Would Newsweek have created the Special Edition at this time without funding from PhRMA?
5. Who originated the idea of co-sponsorship for the Washington, D.C. conference, and how much money did PhRMA pay to Newsweek and for the costs of the conference? How did PhRMA's expenditures for the conference compare to Newsweek's costs?
6. Who determined the agenda and selected the speakers for the conference?
7. Who at the conference was supposed to represent the viewpoint of consumers about affordability as well as the safety and efficacy of prescription drugs?

We hope that you will provide answers to these questions expeditiously.

Travis B. Plunkett
Legislative Director
Consumer Federation of America

Linda Golodner
President National
Consumers League

Alan Reuther
Legislative Director
United Auto Workers

Ron Pollack
Executive Director
Families USA

Frank Clemente
Public Citizen's Congress Watch