Drug Makers and White House Make Up: PhRMA Readies Ads Favoring Health Reform

August 9, 2009

(ChattahBox)—It’s been a wild roller coaster ride for the White House this week, as it sought to clamp down on a mini-revolt by some lawmakers enraged at the reported terms of a deal reached with the drug industry in return for its support of President Obama’s health care reform.

At the same time, PhRMA, the pharmaceutical industry’s lobbying group, sought to publicly pressure the White House to clarify the terms of the agreement in its favor, making a classic pincer move.

According to the New York Times, despite a shaky few days, PhRMA and the White House have made up and the drug industry is now set to launch a $150 million television advertising blitz supporting Obama’s health care reform, due to begin in August. This is a huge expenditure, when compared to the $126 million John McCain spent on his presidential campaign, as noted by the Times.

The new multimillion ad campaign comes on top of millions of dollars already spent for advertising supporting health care reform through other groups, such as Healthy Economies Now and Families USA and about $1 million spent on ads under its own name.

The differing statements from the White House regarding the terms of the deal struck with PhRMA reveal what was at stake, considering the major advertising campaign about to be unleashed by the drug group supporting Obama’s health reform.

Billy Tauzin, the wheeling and dealing president of PhRMA and former Republican Louisiana Congressman, turned up the heat on the White House to quell any attempts by lawmakers to impose price rebates and government price negotiations in the health reform bill.

The White House and PhRMA reached an agreement in June for the drug industry to contribute $80 billion over 10 years to the cost of health care reform, with a cap at that level. Tauzin claimed that price rebates and government price negotiations in the House bill violated the White House agreement to cap the drug industry’s contribution to $80 billion. The terms of the deal have not been made public and both sides differed over whether the deal precluded price negotiations.

Finally, amid pressure from Tauzin, deputy White House chief of staff Jim Messina issued an email confirming in writing that the White House deal, precluded drug price negotiations from the health reform bill, according to the Times.

Lawmakers, like Sen. Sherrod Brown (D-Ohio), Sen. Chris Dodd (D-Conn.) and even House Speaker Nancy Pelosi (D-Calif.), announced they were not bound by the deal and that reducing drug costs was a top priority of health care reform. The White House walked back from Messina’s email saying, that Messina had not intended to confirm that the deal ruled out price negotiations.

On Thursday, A senior White House aide met with Democratic lawmakers informing them that no deal had been reached with PhRMA, banning price negotiations to lower drug prices.

By Friday, PhRMA was backing off as well, with Ken Johnson a senior PhRMA official saying, “All of the questions about what was in the agreement distract from our shared goal of making sure everyone has access to health care coverage.” The Times reports that the White House may have placated the drug industry by ruling out price rebates from the House Bill, but not price negotiations.

Whatever the case, all parties are now mollified at the moment and PhRMA is still in place as one of health care reform’s biggest allies. Granted, the drug industry would gain millions of new customers and additional profits should health insurance be expanded to cover all Americans.

The back story to the rocky alliance between PhRMA and the White House is the controversial role PhRMA president, Billy Tauzin played as a Congressman to hand over a huge windfall to the pharmaceutical industry right before he left Congress to head PhRMA, at a reported salary of $2.5 million per year.

Tauzin, as chair of the powerful House Energy and Commerce Committee ushered the drug industry friendly Medicare Prescription Drug Bill through Congress, which specifically prohibited Medicare from directly negotiating for lower drug prices with the drug industry. The only reason to craft the bill prohibiting price negotiations, was to benefit the drug industry, ensuring drug prices would remain high.

Just a few months after the Medicare Prescription Drug Bill was signed into law, Tauzin began negotiating with PhRMA for his lucrative position. Along with Tauzin, 14 congressional aides involved with the drug industry friendly Medicare Bill left their positions to work for the pharmaceutical industry.

The cozy relationship between the drug industry and Tauzin was explored in a 60 minutes report, entitled “Under the Influence” by Steve Kroft and was highlighted in Michael Moore’s expose of the health industry, “Sicko.”

Sen. Brown is familiar with Tauzin’s background and he is not concerned that the White House and Tauzin’s versions of the terms of the deal with PhRMA seem to differ. Brown told Huffington Post “He [Obama] says there’s no deal [price negotiations]. I take him at his word,” adding “…Billy Tauzin has not always been all that straight with the truth.”


Comments

4 Responses to “Drug Makers and White House Make Up: PhRMA Readies Ads Favoring Health Reform”

  1. Posts about Huffington Post as of August 9, 2009 » The Daily Parr on August 9th, 2009 1:36 pm

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    […] a few months after the Medicare Prescription Drug Bill was signed into law, Tauzin began negotiating with PhRMA for his lucrative position. Along with Tauzin, 14 congressional aides involved with the drug […]

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