Thursday, September 17, 2009

PhRMA’s Big Bribe Comes In by Matt Taibbi

The drug industry’s trade group plans to roll out a series of television advertisements in coming weeks specifically to support Senator Max Baucus’s health care overhaul proposal, according to an industry official involved in the planning.
via Drug Makers to Back Baucus Plan With Ad Dollars – Prescriptions Blog –

I’ve been completely out of the loop with the health care story these last week and half or so, out of touch actually with the entire earth (I’ve been on a deadline on another story), but upon returning to work today I began getting calls about some alarming maneuverings in congress. We’re apparently finally seeing delivery of the Big Bribe that President Obama and Rahm Emanuel extracted from that pharmaceutical industry in exchange for dropping drug-pricing reform in the health care bill.

To recap: PhRMA, the lobbying arm of the pharmaceutical industry, earlier this year announced that it would be setting aside $150 million to pay for an ad campaign supporting the President’s health care bill. The deal was apparently struck in July, after former Louisiana congressman and current PhRMA chief Billy Tauzin (Rod Blagojevich’s underdog opponent in the upcoming semifinal match of the Corrupt Scumbag of the Century So Far tournament) met with Rahm and other Obama aides in the Roosevelt Room of the White House. Also in attendance were representatives of the usual panoply of awful medical corporations, including Abbott laboratories, Merck, and Pfizer. It was in this meeting that the White House agreed to sell out health care reform in exchange for a few bucks to fund the next couple of election cycles.

Tauzin, who has never been one for subtlety or finesse (he took his $2 million-a-year PhRMA job about ten seconds after he finished pushing through the Prescription Drug Benefit bill), stupidly later revealed some of the contents of that shady meeting, saying that the White House had “blessed” a plan involving the $150 million. He disclosed to reporters that he had extracted a promise from the White House to drop two important reforms: one, to allow the government to negotiate bulk rates for drugs in Medicare, and the other to permit the importation of cheap drugs from Canada (which was once an Obama campaign saw).

The only problem with this plan, from the White House’s side, was that not all of the president’s fellow Democrats played along. Specifically, Energy and Commerce chair Henry Waxman put a provision in his health care bill that allowed the government to negotiate lower rates. If Waxman’s language were to be allowed to survive, it would queer the White House’s deal.
So here’s what started happening to kill Waxman’s language. First of all, PhRMA started paying its bribe.

The $150 million it committed to support Obama’s bill is now being rolled out in pro-reform ads, which are being aired mostly in the districts of freshman congressmen. The ads are cheesy, half-hearted tripe blandly supporting the weak-as-fuck remnants of Obama’s health care plan, an example being this “Eight Ways Health Reform Matters To You” ad that salutes the end of coverage denials for those with pre-existing conditions.

Now we’re also seeing pressure from a group of freshmen and Blue Dogs, who have composed a letter to a quartet of House Committee chairs requesting that the Waxman language be removed from the health care bill and replaced with the PhRMA language, which happens to be the language the White House is pushing and which will appear in the Baucus bill in the Senate. The pro-PhRMA language retains the preposterous government subsidy to the pharmaceutical industry in the form of laws banning Medicare from negotiating market rates. It is completely useless and of no possible social benefit to anyone except pharmaceutical companies, but this group still managed to get 60 people to sign this letter.

What does this letter say? Does it argue that the PhRMA language is better for America than the Waxman language? Does it say it will cost taxpayers less and provide cheaper drugs to more people? Hilariously, no. What it says is that this PhRMA language, while worse than the Waxman language, is not quite so bad as you think (it doesn’t save as much as the Waxman language, but it still has a 50 percent price reduction, which isn’t terrible!). Moreover, the letter says, substituting this language will help the bill get passed! Here’s the actual language, addressed primarily to Waxman:
“Your efforts to remove this onerous burden on Medicare beneficiaries… are to be greatly commended. However the commitment by President Obama and the AARP to support legislation that would provide a 50 percent reduction is a dramatic step forward in helping fill the doughnut hole. Equally important, it moves us toward our goal of health care legislation.”
In other words, your attempt to put in a real reform is cool and all, but PhRMA has us by the balls, so help us out.

Interestingly, the congressmen who wrote the bill — former NFL bust Heath Shuler and Illinois Democrat Debbie Halvorson — did not post the letter on their web sites, which is very unusual. One guesses that they are not particularly proud of this particular bit of shameless whoring.
Progressives this week are fighting to accumulate the votes needed to stop any health care bill that doesn’t have a public option. Hopefull they can stop this PhRMA payoff as well. If you’ve got a phone, call your congressman and give him/her hell about this…

This fight on the Hill over health care is extremely interesting and also a very important moment in our history. It was somewhat accidental that the Democrats decided this year to even try this reform; it probably wouldn’t have happened had not a certain segment of their campaign contributors, most notably the major manufacturers like the auto companies, seen their businesses start to crater in part because of health care costs. That’s where the top-down momentum for actually doing something about our absurdly inefficient system probably came from.

So Obama gets elected and swoops into Washington with a big mandate and now the question for him becomes, how do I make all of my various sponsors happy? If you look at the proposals carefully you can see that the whole policy debate is shaped by this dynamic. What is consistently present throughout the policies favored by the White House is an effort to use tax money to subsidize the existing employer-based private system instead of doing the logical thing and taking the bite — for a bite had to be taken out of someone — out of the pharma and insurance industries.

As an added bonus for all of us, the “reform” will include individual mandates designed to significantly increase the insurance and pharma industry’s customer base. So in the end, what we’re looking at is a pair of handouts to corporate donors: tax subsidies to ease the cost of insurance for employers, and mandates to push more business to the health care industry.
On the road to trying to pull this appalling snow job off, however, the Obama administration has stumbled on opposition from both sides. Obviously it will be an enormous victory if progressives can somehow get passed a bill with a real public option and reform of drug prices. But failing that, it would be a very important achievement just to kill the bill entirely. It seldom happens that the public is awake and focused enough to have this kind of OK Corral confrontation with the DC oligarchy, and it has to take advantage.


  1. Matt,

    We are clearly on the opposite sides of this debate; you more progressive and I more conservative. I bet we could not agree on much in terms of issues but oddly enough, from the tone of your article, we do share the same frustration; this is business as usual in DC. The back room, short-term, self-interested deal making does nothing except make matters more complex. I work in Pharma and cannot stand the impotent PhRMA organization and all the bums running it. I concur they have a number of constituencies by the nuts; but let’s not leave out the Pharma industry. We need a more fundamental change in DC than what we are being given. When it is all said and done, this reform will be nothing more than costly band-aids; a complete waste of time. You will not get your public option and I will not get my market-based reforms. But you can bet your ass we will have these Politian’s claiming victory on both sides.

    Where you do have it wrong is your inference that the Pharma industry is evil and bad. I would only ask you take a more objective look into what the industry brings to the table. Not only life saving drugs, of which only 2 of 10 actually generate more revenue than was invested, but also very generous patient assistance that helps people who need access to drugs get the drugs they need. This is reporting that needs to be done and exemplifies the fact that we do not need to rely on the empty suits in DC to reform our healthcare. Is the industry full of altruistic executive angels? Hell no. But what industry is? The power of your pen would be better focused elsewhere.



  2. The only thing left is if the citizens of this country organize and go for an all out assault on what is being forced upon them [us]...a true grassroots uprising/civil joining the "Mad as Hell Doctors" on their tour around the momentum....educate....and never quit!!!

  3. Forgot to sign the above Anonymous said....RCIG