Drug companies get lots of scorn from Sen. Tina Smith, D-Minn. Drug companies also get lots of investment capital from Tina Smith.
Smith, appointed earlier this year to replace Al Franken, has cast herself as an anti-corporate David fighting a pharmaceutical Goliath. She slammed drug companies during her maiden floor speech, tried closing profit loopholes with her first piece of legislation, and even tried bullying the industry into using their tax cuts to reduce drug prices. It has become her brand and it lends itself to a catchy campaign catchphrase.
“I’m Tina Smith,” she says in a her 30-second TV spots, “drug companies work for profits–I work for you.”
Smith also works for herself and her future retirement. Before the Minnesota freshman started lecturing the pharmaceutical industry, she was drawing dividends from her investments in them.
See, giant drug companies are gaming the system by paying money to keep affordable generic drugs off the market. It makes it harder for you and your loved ones to afford life-saving drugs.
— Tina Smith (@TinaSmithMN) March 1, 2018
According to Senate financial disclosures, the senator and her husband, Archie Smith, own between $250,000 and $500,000 in Abbott Laboratories. At the beginning of 2018, the two reported between $5,000 and $15,000 in income from their shares.
Those numbers didn’t make it into Smith commercials or even into a statement from the campaign. Asked how the senator could simultaneously condemn and invest in an industry, spokeswoman Jen Gates responded in boilerplate:
Pharmaceutical companies often bristle at the prospect of increased transparency. Perhaps none more so than Abbott Laboratories. The company made a bucket of cash marketing the powerful opioid OxyContin. Purdue Pharmaceutical manufactured the drug and Abbott pushed the pills. A deep dive by Stat magazine in 2016 revealed that it was Abbott who was behind “the bold ‘crusade’ to make OxyContin a blockbuster.” By all accounts, they succeeded.
Abbott unleashed an army of more than 300 sales representatives into a network of hospitals, surgical centers, and doctor’s offices. When Perdue first partnered with Abbott in 1996, sales of the drug stood at $49 million. Six years later in 2002 sales had exploded to $1.6 billion. As Stat reported, Perdue paid Abbott nearly a half-a-billion dollars to market the painkiller.
The rest is an unfortunate history of drug abuse, overdose, and states ravaged by opioids. Perdue has had to pay a fair share for their role in the crisis. Abbott, however, avoided the lawsuits and the bad publicity that would follow because, per their contract, Perdue agreed to indemnify their partner from all legal costs related to the drug.
Whenever the two companies would get sued over alleged illegal marketing of OxyContin, Perdue would assume the costs and spare Abbott. As Stat reports, a year after their contract ended in 2003, Abbott disclosed in their annual report that it faced no less than 300 lawsuits over the drug. The company got off the hook each time though, as their own report noted, because “Purdue is required to indemnify Abbott in each lawsuit.”
Abbott Laboratories stopped marketing OxyContin in 2003 and the company began turning pharmaceuticals sales over to its owned subsidiaries in 2013. Still, it is never a good look when a senator like Smith condemns the pharmaceutical industry while investing in a company that got rich off of the early days of the opioid crisis.
Now Smith must decide which master she loves and which master she despises either the pharmaceutical industry or patients. Voters head to the polls in Minnesota for the Democratic Senate primary Aug. 14th.
