by Tom Hamburger
An $80-billion deal with the drug industry that the White House thought would add momentum to its campaign for national healthcare reform has instead provoked a political tempest, frustrating and bewildering some of the president's most important allies.
As complaints rolled in, the administration offered varying, sometimes contradictory explanations of the deal.
"I've heard a lot of confusion about what was agreed to," said Rep. Henry A. Waxman (D-Beverly Hills), chairman of the House Energy and Commerce Committee, who wrote healthcare legislation that would impose more cost on the industry than that contained in the White House agreement.
Under the deal, the Pharmaceutical Research and Manufacturers of America, or PhRMA, agreed to provide $80 billion in cost savings over 10 years. It also promised to promote healthcare reform in a multimillion-dollar ad campaign. In return, the White House agreed to consider the $80 billion as a cap on PhRMA's costs in the overhaul legislation. In addition, the White House agreed not to require rebates on sales of commonly prescribed drugs to patients enrolled jointly in Medicaid and Medicare.
Separately, the White House told PhRMA executives that legislation the industry has long opposed to permit importation of cheaper drugs from Canada and Europe would probably not be necessary if a healthcare overhaul bill passed.
The drug industry's chief lobbyist, PhRMA President W.J. "Billy" Tauzin, said the unwritten agreement was reached with Democratic Sen. Max Baucus of Montana, chairman of the Senate Finance Committee, and was closely monitored and "blessed" by the White House.
Since the agreement was announced June 20 -- with President Obama saying, "We are at a turning point in America's journey toward healthcare reform" -- critics from the left and right have criticized the accord. Business and conservative interests are angry that one of their most important traditional allies -- PhRMA -- is now working with Democrats to build support for the president's plan. Liberals say Obama gave away too much to the industry.
See the full story on the White House's deal with PhRMA and the ensuing confusion and discontent in Tribune newspapers and here in the Swamp:
House Speaker Nancy Pelosi (D-San Francisco) said wryly that she thought if PhRMA agreed to $80 billion in savings, it was likely that real savings could probably be twice that amount. She suggested that the House might not honor the White House-PhRMA-Senate deal. Sen. Bernie Sanders (I-Vt.) said that when he read news accounts suggesting that the White House had told PhRMA it would not pursue Canadian drug importation, he sought and received assurances from White House Chief of Staff Rahm Emanuel that there was no such deal.
After that conversation, however, White House healthcare spokeswoman Linda Douglass confirmed to reporters that the White House had discussed the importation provision with worried drug company executives, telling them that "health insurance reform that lowers costs, including pharmaceutical costs, would probably make such legislation unnecessary." Sanders views that as a dubious assumption and says he intends to continue to pursue the provision.
Waxman became concerned about other reports of what was in the agreement, in part because he feared it might undermine aspects of his healthcare bill. In an interview this week, he expressed alarm about Tauzin's claim -- since revised -- that the deal included a promise not to have Medicare seek further drug price discounts.
"It's ridiculous to have a program in which Medicare spends millions of dollars with drug companies as a customer and does not get a better deal on pharmaceutical prices," Waxman said.
After first declining to comment, the White House now says the topic did not explicitly come up in discussions with the industry.
"I think a lot of people in the room walked away with a different understanding of what was agreed to," Waxman said.
Tauzin, a former congressman from Louisiana, believed that he had an understanding that there would not be negotiations over Medicare drug prices in the future. Currently, government negotiations for lower prices are banned in the Medicare Part D program under a "noninterference" clause that the industry lobbied for several years ago.
This week, Tauzin's top aide at PhRMA, Ken Johnson, reiterated that view but said it was time to stop public discussions about whether it came up in the closed-door White House meetings.
From the time the industry was first asked to participate in crafting healthcare overhaul legislation, Johnson said that Tauzin told everyone: "We'll do everything we can to help. But we will not support price controls, because they will hurt patients by drying up research and development needed to find new cures, and they will kill jobs in a very fragile economy."
Tauzin thought the White House and others understood that meant there would be no change in the government prohibition on price negotiations for drugs. "We thought there was an underlying assumption on that key point," Johnson said.
At this stage, he added, "it's counterproductive to keep talking about it."
Comments
Since the Swamp won't report this new poll, I will:
"With improvements in the economy and only a fraction of the stimulus money having been spent so far, most Americans -- 72 percent -- say returning the unused portion of the $787 billion dollar stimulus to taxpayers would do more to boost the economy than having the government spend it. Majorities of Democrats (59 percent), Republicans (87 percent) and independents (70 percent) think the money should be returned to taxpayers.
Despite Obama's campaign pledge that 95 percent of Americans would "not see their taxes increase by a single dime," some administration officials have recently refused to rule out tax increases. More Americans -- by a 43-point margin -- think Obama is not going to be able to keep this campaign promise on taxes (69 percent to 26 percent).
In fact, the consensus is taxes will go up. Most Americans -- 75 percent -- think their taxes will increase under the Obama administration. That's up from 60 percent who thought so at the beginning of the year (13-14 January 2009).
A 57 percent majority of Democrats thinks their taxes will increase, up from 42 percent who thought so at the beginning of the year. Large majorities of Republicans (95 percent) and independents (75 percent) also think their taxes will go up during Obama's presidency." (Opionion Dynamics/Fox News Poll)
What a "radical" notion: letting people keep the money they earn.
Posted by: Bruce | August 14, 2009 7:55 AM
Hey, everyone, we are still without any legislation that allows for healthcare reform. It is still in the works and President Obama's representatives are working with whomever, to get to that legislation. The objective is affordable, sufficient healthcare, not some whittled-down policy that is too costly and that neglects the medical needs of the " client " !! If deals must be made to get to that objective, I know that President Obama will be pitching for all of Americans, who need such programs. So, hang on to your hats and your intelligence, because there will be a lot of nonsense floating around, masquerading as supposedly, President Obama's positions. Fortunately, we know his position, healthcare for those who need it, period !! The lies, distortions and misrepresentations will be floated by the Republican/Libertarian Party, but we have come to expect that !! It wouldn't be a debate, if they didn't dirty the waters !!!
SUPPORT OUR TROOPS, BRING THEM HOME, ALIVE AND WHOLE. NOW.
Posted by: Don Fitzgerald, IL | August 14, 2009 8:21 AM
So Uber-lobbyist Billy Tauzin is a key player in this new "Health" deal?
Lobbyist???? Anyone remember Obama's pledge to exclude lobbyists?
So much for hope. And Change.
Posted by: Bruce | August 14, 2009 8:53 AM
Let's meet the Grand Dame of the Liars:
http://www.nydailynews.com/news/2009/08/13/2009-08-13_former_lt_gov_mccaughey_leads_death_panel_charge_writing_up_talking_points_on_he.html
Oh, those Corporations are so sneaky and sleazy, they just ooze our money, to whom ever will lie the most for the Greedy Corporate Bank !!
SUPPORT OUR TROOPS, BRING THEM HOME, ALIVE AND WHOLE. NOW.
Posted by: Don Fitzgerald, IL | August 14, 2009 11:25 AM
barry shaking down big pharma for cash. More pay to play - except at the national level. Who would ever have thought people would actually want chicago style politics in Washington, and then call it CHANGE.
("anyone but Obama" 2012")
Posted by: moreofthesameonlyworse | August 14, 2009 11:33 AM
The problem with trying to implement healthcare reform legislation is that the congress and the president have spent all our money and their veracity on bailouts that haven’t produced any results for our economy. We are a debtor nation brought about by congress and the president promising to restore prosperity. They now want to have government control over 20% of our GDP with legislation many lawmakers did not bother to read or cannot explain to their constituents. Cutting congress by 50% would be a better option for the good of our nation.
Although Mr. Fitzgerald buys in to the socialization of healthcare by a government who will exempt themselves from the plan they want to impose on the rest of us, their efforts will fail because most Americans reject this phony power grab by a cadre of self serving political dolts.
Posted by: Mike C | August 14, 2009 1:26 PM
Now, if you could have made some sense with that collection of words, " Mike C ", that you posted, we would had something to discuss. Unfortunately, you must have been in that bunker with the Bush&Cheney fringe, for the last 8 years. It was due, to the Dynamic Duo's absence from the helm of our ship of state, that America has the huge debt, with which we are now grappling. I don't expect you to accept that idea, since in doing so, you would have to repudiate their incompetence and malfeasance. The assault and occupation of Iraq, which includes that exhaustive search for WMDs, has contributed greatly to the national debt. Compound that with the rampant greed, and the deregulation of Wall Street, and you have the perfect storm for mind-numbing debt, which was hosted by the Republican/Libertarian Party. It has taken a Democratic President and a Democratic Congress to begin to turn our economy around. Notice the word, begin. It is far from a recovery, but at least the bleeding has been staunched.
As for the nonsense about socialism, that you bandy about, when will we learn that all forms of government are not pure. We live in a capitalistic democracy, with many elements of socialism in play. Like it or not, they are there and maybe you will familiarize yourself with some of the more obvious ones, such as Social Security, Medicare, public education, mass transportation. Just to name one or to of them. So, you see the " charges " of socialism are some what outdated and meaningless, but I don't expect you to give up the term anytime, soon. It is so darn convenient to just throw loaded words around, instead of putting a reasonable post together.
SUPPORT OUR TROOPS, BRING THEM HOME, ALIVE AND WHOLE. NOW.
Posted by: Don Fitzgerald, IL | August 14, 2009 6:38 PM
BHO needs to get his groove back.
Dealing with Tauzin, then trying to say he wants to help common Americans?
Get real Mr. President.
Note to BHO:
$80BILLION OVER TEN YEARS IS ALMOST NOTHING TO THOSE BIG PHARMA ROBBER BARONS!
Note to BHO supporters;
NOW is the time to notify your congressmen and BHO that you do not like what you see emerging; Namely, no robust public option, no power for Medicare to negotiate costs.
We are losing it all right now, and Steele was right; This will be BHO's 'Waterloo' and the Dems too, if they don't produce something worthy of the name 'reform'.
Posted by: C.Morris✧ | August 17, 2009 7:33 PM