[Oe List ...] OE Digest, Vol 65, Issue 47

[Don Elliott]

Ed,


IV. You have not said anything about the flood of money going to Congress
nd corruption that happens with wink and a nod rather than outright buying
f votes.  Is there any Conservative outrage about this kind sneaky
orruption?


You challenged Susan to say something about money going to our legislators in exchange for favorable treatment.  You seem to imply that that is a problem of conservatism.  I am reproducing here an article by a liberal columnist who is outraged by the deal made between PhRMA and the WH which prevents government from negotiating for lower drug prices on the basis or volume buying.  Medicare Canada has negotiated for and received huge volume discounts.  You can order American made drugs from Canada for a fraction of their cost from US pharmacies, so-called reimportation.  The Medicare drug bill passed by a democratic congress under GWB was roundly criticised for not allowing negotiated lower drug prices.  Text in red are my comments.

 

Robert Reich's Blog 

Robert Reich was the nation's 22nd Secretary of Labor and is a professor at the University of California at Berkeley. His latest book is "Supercapitalism." 

This is his personal journal.


About Me


 


View my complete profile





Sunday, August 09, 2009




How the White House's Deal With Big Pharma Undermines Democracy 




I'm a strong supporter of universal health insurance, and a fan of the Obama administration. But I'm appalled by the deal the White Hous
e has made with the pharmaceutical industry's lobbying arm to buy their support.

Last week, after being reported in the Los Angeles Times, the White House, after initial denials, confirmed it has promised Big Pharma that any healthcare legislation will bar the government from using its huge purchasing power to negotiate lower drug prices. That's basically the same deal, roundly criticized by the Democratic Congress, that George W. Bush struck in getting the Medicare drug benefit, and it's proven a bonanza for the drug industry. A continuation will be an even larger bonanza, given all the Boomers who will be enrolling in Medicare over the next decade. And it will be a gold mine if the deal extends to Medicaid, which will be expanded under most versions of the healthcare bills now emerging from Congress, and to any public option that might be included. (We don't know how far the deal extends beyond Medicare because its details haven't been made public.)  So much for "change" and "the most open and transparent administration in history".


Let me remind you: Any bonanza for the drug industry means higher health-care costs for the rest of us, which is one reason why critics of the emerging healthcare plans, including the Congressional Budget Office, are so worried about their failure to adequately stem future healthcare costs. To be sure, as part of its deal with the White House, Big Pharma apparently has promised to cut future drug costs by $80 billion. But neither the industry nor the White House nor a
ny congressional committee has announced exactly where the $80 billion in savings will show up nor how this portion of the deal will be enforced. In any event, you can bet your ass that the bonanza Big Pharma will reap far exceeds $80 billion. Otherwise, why would it have agreed?

In return, Big Pharma isn't just supporting universal health care. It's also spending a lots of money on TV and radio advertising in support.  It is also supporting Democratic political campaigns 2:1 vs Republican campaigns, a reversal of its previous pattern.  Sunday's New York Times reports that Big Pharma has budgeted $150 million for TV ads promoting universal health insurance, starting this August (that's more money than John McCain spent on TV advertising in last year's presidential campaign), after having already spent a bundle through advocacy groups like Healthy Economies Now and Families USA.

I want universal health insurance. And having had a front-row seat in 1994 when Big Pharma and the rest of the health-industry complex went to battle against it, I can tell you first hand how big and effective the onslaught can be. So I appreciate Big Pharma's support this time around, and I like it that the industry is doing the reverse of what it did last time, and airing ads to persuade the public of the rightness of the White House's effort.

But I also care about democracy, and the deal between Big Pharma and the White House frankly worries me. It's bad enough when industry lobbyists extract concessions from memb
ers of Congress, (like those damned "blue-dog Democrats), which happens all the time. But when an industry buys secret concessions out of the White House in return for a promise to lend the industry's support to a key piece of legislation, we're in big trouble. That's called extortion: An industry is using its capacity to threaten or prevent legislation as a means of altering that legislation for its own benefit. And it's doing so at the highest reaches of our government, in the office of the President.  (I would like to know how the President can promise that these provisions, favorable to PhRMA, will be in the legislation that Congress finally passes.  Will he refuse to sign legislation that provides for negotiating drug prices, like Canadian Medicare does and allow  reimportation?)


When the industry support comes with an industry-sponsored ad campaign in favor of that legislation, and contributions to the campaigns of legislators that will vote on the legislation, the threat to democracy is even greater. Citizens end up paying for advertisements designed to persuade them that the legislation is in their interest. In this case, those payments come in the form of drug prices that will be higher than otherwise, stretching years (and hundreds of billions of dollars) into the future.

I don't want to be puritanical about all this. Politics is a rough game in which means and ends often get mixed and melded. Perhaps the White House deal with Big Pharma is a necessary step to get anything rese
mbling universal health insurance. But i f that's the case, our democracy is in terrible shape. How soon until big industries and their Washington lobbyists have become so politically powerful that secret White House-industry deals like this are prerequisites to any important legislation? When will it become standard practice that such deals come with hundreds of millions of dollars of industry-sponsored TV advertising designed to persuade the public that the legislation is in the public's interest? (Any Democrats and progressives who might be reading this should ask themselves how they'll feel when a Republican White House cuts such deals to advance its own legislative priorities.)

We're on a precarious road -- and wherever it leads, it's not toward democracy. 





posted by Robert Reich | 12:16 PM 

The Deal, (from the Huffington Post)

 The deal, as outlined in the memo:

Commitment of up to $80 billion, but not more than $80 billion.

1. Agree to increase 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 exc
hange 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

 

Where is your outrage over this?  Is this an example of  "everybody's doing it", "secondary integrity", or "the end justifies the means"?


 





Don Elliott

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://wedgeblade.net/pipermail/oe_wedgeblade.net/attachments/20090904/866a1be3/attachment.html>