We know that part of Obama's 2009 health care strategy was to avoid the Clinton mistakes (the private sector wasn't sufficiently included and greased, so it spent big bucks on ads to dissuade the public and pressure Congress against Hillarycare). So instead, the "transparent administration" made secret deals with various groups to preempt dissent and get them on board for health care reform. Hospitals, doctors, and the AARP won enough concessions and guarantees, so they signed on. The pharma industry (and its PhRMA lobbying group) was a key piece of the puzzle and needed to be assuaged. PhRMA is one of the biggest lobby groups in DC and responsible for the famous "Harry and Louise" ads during the Clinton years, so Obama wanted to avoid a repeat.
The deal leaked (we'll get into the reasons for this soon), and we soon discovered what a scam it was for consumers:
http://worldaffairs-
So in order to appease PhRMA and appear to be a victory for the people, Obama touted $80B in cost savings over 10 years. But in actuality, the other concessions in favor of pharma would total much more (Sunlight estimates $220B). Some have described it as a "windfall", since the millions of new customers required to purchase individual insurance (subsidized by the government or not) under Obamacare would invariably purchase more drugs. In addition, PhRMA got guarantees that Washington wouldn't tighten Medicare drug reimbursements (and would in fact expand them by closing a loophole), or permit re-importation of the exact same damn drugs from other developed, trustworthy nations at lower cost (e.g. the same pill in Canada may cost 30% less than in the US because their government actually cares about its citizens, so why can't Canada sell it back to Americans? Isn't that just market economics?). I find this shocking because as a Senator, Obama voted twice to amend Medicare drug laws to permit the very price negotiation and foreign drug re-importation components that he agreed to exclude from Obamacare! Maybe his Senate votes were just out of principle (since he knew Bush would veto any changes anyway), and as president he primarily wants to get some sort of bill passed that will cover the uninsured, not necessarily fix our expensive, broken system. But it's not good leadership to cover the uninsured at ludicrous cost to the rest of us through excessive industry concessions.
http://worldaffairs-
One condition that Obama's people insisted on was that PhRMA spend $100-150M on pro-health-care advertising. So not only would that powerful body refrain from attacking Obamacare, they would actually help sell it. Ironically, they brought back the same Harry and Louise actors to do a pro-reform commercial, I guess now that they are older and poorer from lost 401(k) value and soaring health costs vs. 1994 (http://www.youtube.com/watch?
So what happened to the deal and how do we even know about it? Obama and PhRMA agreed that health care negotiations would go through Max Baucus and his Senate committee, since Baucus was a pharma guy who could maintain control. But Henry Waxman (who has a much chillier relationship with pharma) was working on a rival bill to Baucus', without all the lucrative pharma concessions. PhRMA got concerned that Washington would pull a fast one, so PhRMA's head Billy Tauzin, a cancer survivor and former Louisiana Congressman (who flipped from the Dem to GOP side), snitched to the LA Times (maybe to get back at the White House), and later Obama's people had to admit that the deal existed. PhRMA and the CEOs of major drug companies still want health reform to pass (because it will be great for them in present form), so it's ironic that Tauzin's paranoia possibly compromised the entire reform effort.
Tauzin's background: he helped Bush's Medicare Modernization Act narrowly pass in 2003, which was the biggest change to Medicare in the program's history and more expensive than our Middle East wars (the GOP really cares about deficits and the size of government). It was a huge boon to pharma because it permitted drugs to be partially covered by Medicare (under "part D", as in DUMB), and prohibited government negotiation of cheaper drug prices with companies (which is what the government is supposed to do, and actually does for vets through the VA health system!). Don't get me wrong, I do think truly needy seniors deserve assistance with their prescriptions (if the drugs are really necessary for reasonable quality of life), but it should be through price negotiations and not corrupt subsidies that hurt taxpayers. Otherwise the bargaining power of Medicare is wasted. And for his effort, Tauzin became the new CEO of PhRMA with a $2.5M salary. Anyway, now that the health bill looks doomed and PhRMA wasted $100M plus on ads, Tauzin looks like a goat and recently decided to step down. Hollywood couldn't make this stuff up.
Other details: PhRMA spent $28M on lobbying in 2009 (and spent $390 over 3 years), and the whole industry spent $100M. PhRMA pays 165 lobbyists and outside consultants, of which 137 of them used to work in government.
No comments:
Post a Comment