In an August 14, 2009 article in the LA Times, Tom Hamburger provides yet another installment in the ongoing disclosures about a secret White House deal with PhRMA on pharmaceutical pricing.
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.
The LA Times story follows an August 13 report in the Huffington Post by Ryan Grim, which disclosed a July 7 memo circulated among PhRMA company members, setting out the terms of the deal.
July 7 -- PhRMA Deal Commitment of up to $80 billion, but not more than $80 billion. 1. Agree to increase of Medicaid rebate from 15.1 - 23.1% ($34 billion) 2. Agree to get FOBs done (but no agreement on details -- express disagreement on data exclusivity which both sides say does not affect the score of the legislation.) ($9 billion) 3. Sell drugs to patients in the donut hole at 50% discount ($25 billion) This totals $68 billion 4. Companies will be assessed a tax or fee that will score at $12 billion. There was no agreement as to how or on what this tax/fee will be based. Total: $80 billion In exchange for these items, the White House agreed to: 1. Oppose importation 2. Oppose rebates in Medicare Part D 3. Oppose repeal of non-interference 4. Oppose opening Medicare Part B
On August 14, Dan Froomkin discussed the credibility of White House statements on the deal:
. . . the Obama White House was a model of transparency — for two, maybe three days. It was a brief Golden Age, reaching its pinnacle on that glorious Day Two, when the president dramatically proclaimed that “the way to make government accountable is make it transparent so that the American people can know exactly what decisions are being made, how they’re being made, and whether their interests are being well served.”
Once the White House press corps had endured a few briefings with consistently cagey Press Secretary Robert Gibbs, however, it quickly became clear that the relative guilelessness some of us had hoped for was nowhere to be found. Indeed, the internal workings of this White House have turned out to be almost as opaque as the last one.
And now comes the Obama White House’s first really major credibility crisis. If you believe that the White House made major concessions to Big Pharma in a secret deal last month — and the evidence for that is considerable — then there’s a name for the series of conflicting denials that Gibbs and others have issued in the last week. It’s called lying.
Some of the feedback
Miles Mogulescu, Is Obama a Back-Room Blue Dog on Health Care?, Huffpo, August 14, 2009
Robert Reich, , The White House deal with Big Pharma undermines democracy. Obama’s agreement with Big Pharma may help healthcare reform pass, but it may also mean higher drug prices for you, Salon, August 10, 2009.
Karen Tumulty, PhRMA Deal Puts Obama, Congressional Dems at Odds, Time, Aug. 07, 2009,
Billy and the Beanstalk, Big Pharma’s lobbyist has sold his CEOs on a political fantasy, WSJ, August 13, 2009.
Last week Mr. Tauzin ostentatiously blabbed to the media that his industry’s deal to help fund ObamaCare with $80 billion in prescription-drug discounts was really protection money. In particular, he bragged that he had secured promises from the White House that President Obama would fend off Congressional Democrats who want to “negotiate” drug prices, which in practice means price controls.
For days, the White House continued to confirm Mr. Tauzin’s understanding: “We feel like $80 billion is an appropriate amount,” Obama spokesman Robert Gibbs said as late as Friday afternoon. Then that evening, to placate House liberals, the Administration went into full-steam reverse: It claimed that price controls really aren’t part of its pharma deal, after all.
Timothy Noah, Obama’s Biggest Health Reform Blunder: How Big Pharma’s Billy Tauzin conned the White House out of $76 billion.
Slate, Aug. 6, 2009
Jake Tapper, The PhRMA Deal: The Plot Thickens?, ABC, August 12, 2009