NPR: More Details on the Obama-PhRMA Back Room Deal

A while back we noted the possible connection between Billy Tauzin's departure as president of PhRMA and the deal the lobbying organization made with the Obama White House over health reform legislation:
http://brodyhooked.blogspot.com/2010/02/departure-of-two-million-dollar-man.html

Anyone wanting more details about this deal should check out the NPR Fresh Air story:
http://www.npr.org/templates/story/story.php?storyId=123889454&ft=1&f=1027

(Note: The NPR link has additional links to source materials)

Paul Blumenthal, a writer for a nonprofit open-government group, documented a series of meetings between Tauzin and major drug company CEOs, on one side, and Obama chief of staff Rahm Emanuel and his deputy Jim Messina on the other. They cut a deal with the following features:

• PhRMA would pay for $150 million in ads favoring health reform (the ads appeared as sponsored by a coalition of organizations and PhRMA funding was not clearly labeled).
• PhRMA would agree to back Obama's efforts overall, and also to forgo $80B in potential profits over the next decade to support reform.
• Obama would eliminate from any final bill the cost-cutting measures PhRMA most feared-- allowing reimportations of cheaper drugs from canada, and using government mass purchasing power to negituiate lower prices.
• The deal would be made around the draft bill being prepared by Max Baucus's Senate Finance Committee; the House committees and other Senate committees working on reform legislation were cut out.

The deal became public knowledge in the late summer when Tauzin started to fear that Obama might be pulling back, and leaked the deal to the press. That led the White House to admit the deal two days later. Blumenthal reconstructed who came to the meetings from the White House visitors log which the Obama administration, for the first time, has made public.

Blumenthal offered as his take on Tauzin's resignation that PhRMA was upset because it spent the $150M on ads and has no bill to show for it. He added that at present, PhRMA stands to make out like bandits if some type of health reform similar to the Senate bill becomes law. Millions more Americans will be insured and able to afford to buy their products, and to pay top dollar for the privilege. As we noted in a previous post, the drug firms have already jacked up their prices of brand-name drugs to the tune of a $100B increase over the next decade, effectively cancelling out the promised $80B price savings.
http://brodyhooked.blogspot.com/2010/02/big-pharmas-sacrifice-for-health-reform.html

Bottom line-- if you're a political cynic and expect health reform to be done according to the age-old Washington formula, you're not surprised to see this particular brand of sausage being made. You can defend your cynicism by noting that at this point, health reform has come closer to passage under Obama's watch than it has in the past century, so he must be doing something right. If you were hoping that Obama would, as promised, change the way Washington does business, you have to be somewhat disappointed.

Departure of the Two Million Dollar Man--A Blow to Reform?

On a speaking trip to LA, I belatedly opened yesterday's edition of the Los Angeles Times to encounter Tom Hamburger's detailed reporting on Billy Tauzin's announced resignation as head of PhRMA (Sorry, my recalcitrant laptop refuses to copy/paste the URL for the story--go to www.latimes.com and search on "Tauzin").

Billy Tauzin, former congressman from Louisiana, is best known to us pharmascolds for his appearance in Michael Moore's Sicko, shamelessly mugging for the camera while holding the outsized cardboard check for $2 million as he celebrated being hired by PhRMA as their CEO, immediately after he had successfully pushed Medicare Part D through Congress with multiple provisions handcrafted to suit the desires of the drug industry. With that background, it seems odd to read Hamburger's account of how Tauzin's departure may present a serious problem for advancement of health reform.

Here's how Hamburger totes the balance sheet on Tauzin's negotations to date with the Obama White House. Tauzin gave up: a promise of a total of $80B in the next decade in drug industry profits, and a promise to launch a series of ads supporting health reform. Tauzin got: promises that the White House would oppose legislation to use government mass purchasing power to negotiate down drug prices, and legislation allowing the reimportation of cheaper drugs from Canada and elsewhere. Add to that the information presented in the most recent previous post, that in the runup to this year, the drug industry actually managed to raise its prices by an amount that promises a $100B increase over the next decade, and you see that the promised $80B savings has already been wiped out. The negotiating score seems to be Tauzin and PhRMA 100, White House 0. (No wonder that Hamburger reports that the PhRMA board was in favor of retaining Tauzin and that his resignation was for purely personal reasons.)

Yet there is no joy in Mudville, apparently. Other business interests, notably the US Chamber of Commerce, want to continue to oppose health reform tooth and nail and were livid when PhRMA broke ranks with a uniform business front. The GOP, which used to count on getting almost all of PhRMA's campaign contributions until PhRMAS responded to recent Democratic gains by splitting their lobbying largesse more or less 50-50, has threatened retaliation if they win big this fall as they hope to.

Lessons for us folks who make less than $2M annually? I offer two. First: If we want health reform we are going to have to really pitch in, work hard, and take off the gloves. The simple matter is that health care is becoming completely unaffordable in the US because of money that flows into the pockets of many corporate interests. They have shown us that they are not going to go quietly--they will fight with everything they have to keep that gravy train. Good sense, rational arguments, and evidence count as nothing against that entrenched lobbying power.

Second: Those corporate interests would like nothing more than to be joined by yet another corporate interest--physicians. Many US physicians are falling into line, refusing to look at any cost saving that would cut into their already bloated incomes, and lobbying hard to make the government leave their pet profit lines alone. This is an abject failure of medical professionalism and medical leadership. The remaining medical specialties must loudly denounce that behavior. The days of doctors always being polite to other doctors in public, and never pointing fingers no matter how egregious the behavior, must end.