What Did The White House Promise PhRMA?
The White House denies it on the record, and PhRMA denies it on the record, but below, via Ryan Grim, is an outline of the deal drug manufacturers supposedly struck with the Obama administration early last month.
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 [follow on biologics] 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 billion4. 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
Much more, here. In essence, the administration agreed to stand with PhRMA in opposing a series of measures that would have eaten into drug manufacturers' profits in exchange for PhRMA agreeing to a separate series of provisions which would have freed up $80 billion in funds for the government to put toward a health care overhaul. PhRMA head Billy Tauzin came forward last week, alleging that the White House had committed to the $80 billion concessions as a ceiling. The revelation that sent tempers flaring among congressional health care leaders, who were closed out of negotiations and, therefore, weren't privy to the details of the agreement. The White House ultimately said PhRMA never received a guarantee, putting administration officials in the uncomfortable position of publicly disavowing Tauzin's claims while hoping to retain his support at the same time.
Earlier today, a PhRMA-led coalition kicked off a $12 million ad campaign, targeting fence-sitting Democrats, in support of health care reform legislation.
Josh
Matt
Eric
Brian
Outrageous. There is no reason to agree to this. Let the criminal pharma industry open their books and show how badly they are raping us consumers and the government. Screw them.
August 13, 2009 3:10 PM | Reply | Permalink
There is a reason. Look at the problems were having just getting some kind of bill past the health insurance lobby. Think if we were taking on Pharma too. Having them divided is a great advantage. Let's get insurance for everyone, and worry about drug prices later. When we do get to drug prices, insurers will want prices cut, and will remember that pharma fought them on insurance, so they'll divide again. Taking on your opponents one at a time instead of all at once is always a good idea.
August 13, 2009 4:08 PM | Reply | Permalink
I think this is called divide and conquer.
Let me just guess at what is taking place here.
Without this Obama Administration was facing down a united front of Health Insurance Industries and Big Pharma. By making a deal with Big Pharma, the opposition has just been reduced. Furthermore, it looks like he's going to sick Big Pharma on the health insurance companies, but I'm not sure about that.
What we want is a single payer, universal health care and bargaining power that the rest of the world enjoys in buying drugs. But the political headwinds against that in the United States is formidable.
So to get to Universal/Single-payer, Obama takes the half step of 'public option'.
But he still can't crack the political opposition.
So he takes another half step toward "Public Option" by eliminating the use of bargaining power for drugs.
Presumably, once we get public option, the power calculus changes, as people over time migrate to public option once they see it is a better deal.
Personally, I think Obama would do himself a favor, bargaining power-wise, by signing what he might call a temporary emergency executive order that allows Medicare to sell health insurance, at cost, to people without health insurance or pre-existing conditions (or even 'pre-existing conditions' insurance to people who have private insurance). I like to call it Medicare-For-Sale.
At that point, he's technically achieved public option without reform legislation, and in the process of pursuing reform legislation, the bargaining power has altered, as the insurance companies will have already lost. Same with the reactionary Republicans.
If the reform legislation doesn't go through, then the emergency executive order stays in place until a new president comes along.
Democrats can then use scare tactics in upcoming elections that the Republicans will strip away people's insurance.
Presumably, once larger majorities are formed after 2010 and 2012, at the very least, legislation allowing companies to pay half the premiums, perhaps with a tad bit of tax incentives, and subsidies for people still too poor to buy Medicare-for-sale. At that point, universal single payer is a microstep away.
Once the insurance front is stabilized, presumably we can address the Big Pharma question. Big Pharma is not going to go away, but Big Insurance probably is fighting an existential battle, long term, and that's why they are pulling out all the stops. In the mean time Big Pharma does provide jobs and exports and so helps the economy on a fundamental level. And they will no longer be providing help to Big Insurance in the battle against the reform package.
Its going to take 15 years for all of this to play out. Frankly speaking, a revolution or some new social democrat or Labor Party coming to power would be much better and much faster.
That's how I see the events now taking place.
August 13, 2009 5:20 PM | Reply | Permalink
I actually like that executive order idea. Medicare for sale at cost. That would crush the insurance industry and create a single payer system virtually over night.
August 14, 2009 9:50 AM | Reply | Permalink
..."supposedly struck a deal?" - before you jump off the cliff you might want to wait around to see what happens next. Since when is "supposedly" a story?
August 13, 2009 3:26 PM | Reply | Permalink
It's right up there with some GOP operative speculating about Reid making a deal with Dean Heller. Must be a slow news day.
August 13, 2009 3:32 PM | Reply | Permalink
"Earlier today, a PhRMA-led coalition kicked off a $12 million ad campaign, targeting fence-sitting Democrats, in support of health care reform legislation."
Sausage. Being. Made.
August 13, 2009 3:40 PM | Reply | Permalink
I find it perplexing that you didn't think this part of the HuffPo story was even minimially relevant:
Where did it come from?
A "knowledgable health care lobbyist?" That's his source?
Hearsay with an authentication problem wrapped within hearsay from an unidentified witness with an inherent credibility problem, and you're treating it as gospel truth here.
Maybe this is true. Maybe it isn't. Dunno.
I do know this: if there's one lesson we should learn from the shreiking ninnies in the town halls, it's the imperative need to view information that slots oh-so-neatly into the little niche in our minds labelled "Our Worst Fears" skeptically rather than credulously.
August 13, 2009 3:43 PM | Reply | Permalink
...can I still burn Rahm in effigy?
August 13, 2009 3:49 PM | Reply | Permalink
I agree with NCSteve mostly, but yay on Rahm!
August 13, 2009 4:26 PM | Reply | Permalink
Burning him in effigy won't get the job done.
August 13, 2009 5:31 PM | Reply | Permalink
I tend to believe it because Pharma is rolling out support for the bill - why would they support it if they weren't getting something on the back end?
August 13, 2009 3:46 PM | Reply | Permalink
How to you get from "they must be getting something" to "they must be getting this specific set of somethings." Of course they're getting something. Who says that what they're getting is what's in this memo that's denied by both parties? Who says, indeed. That's the relevant question.
A " health care lobbyist" who says it was prepared by someone involved in the negotiations.
We have no evidence the document is authentic. Just this lobbyist's word.
We don't know who prepared it. But this lobbyist--who clearly was not involved in the negotiations says the document was prepared by someone who was, although both of the parties involved adamently deny it.
It's really hard for me to avoid the suspicion that this came from a lobbyist for the health insurance industry and that it was "released" for the specific purpose of getting the left as angry about healthcare reform as they've gotten the right. And if that's true, it immediately casts an additional cloud on the authenticity of the thing.
Seriously, who else had a motive to leak, or pretend to leak, this document? If it was not a health insurance lobbyist, and/or if he or she had an honest motive, why no mention of that in the story to bolster the facially dubious source's credibility?
Unauthenticated. Hearsay. Heasay within hearsay. From an unidentified source vouching that it's from another even more unidentified source. Explicit denials of its accuracy from the principles involved. Pathetic. If a lawyer tried to introduce a document with these problems at trial, it wouldn't be a quesiton of whether the document's admissible. It would be one of whether the judge and opposing counsel would be able to keep from laughing at the lawayer in front of the jury.
August 13, 2009 4:38 PM | Reply | Permalink
There wouldn't be a need to speculate had there been the transparency Obama promised, the negotiations on C-SPAN, the White House not making back room deals with lobbyists. Both PhRMA & the White House have been playing there is a deal, there is no deal game for too long. Unless there is something to hide, just be upfront and tell the American people what the terms of the agreement are.
http://www.huffingtonpost.com/2009/08/09/flashback-obama-promises_n_254833.html
August 13, 2009 5:42 PM | Reply | Permalink
http://tpmdc.talkingpointsmemo.com/2009/08/what-did-the-white-house-promise-phrma.php#comment-3560738
August 13, 2009 5:49 PM | Reply | Permalink
First of all, the memo that is on Huffingtonpost is just an outline. Also, who is this lobbyist that gave Huffingtonpost a memo? Is he a lobbyist from the Health Insurance industry?
I think that memo is suspect.
In terms of a PhRMA deal, I am sure that there was one struck but I don't think it is that big of a deal. It would have been nice if there was transparancy whereby the House and the Senate sat down with the PhRMA and the White House and struck a deal that everybody would have been on board with instead of just Baucus, the White House, and PhRMA.
Any ways, we all know that Big PhRMA has the money to KILL THIS WHOLE THING so I rather that they are on board with us than not.
I like the new ad.
August 13, 2009 3:58 PM | Reply | Permalink
I was ready to give TPM the benefit of the doubt for not blaring a tenuous story about this. "TPM would wait until there is more information before running the story," I told myself. I was wrong.
As you mentioned, the White House and PhRMA have both denied the deal. That's nothing to sneeze at. When BOTH parties say that the information is wrong, the information tends to be wrong.
Additionally, we've already seen people jump the gun on what was promised to PhRMA. Initially, it was reported that PhRMA and the White House had a "come to a secret deal" to avoid price negotiations. But it was quickly reported shortly after those initial reports that Ken Johnson, the senior vice president for PhRMA was saying, "It [limiting price negotiations] was never brought up at the meeting." The White House also denied the NYT's characterization of what was discussed. In other words, NYT was wrong.
Certainly, there are questions about what was actually discussed. But, based on the information made available, price negotiations were not part of any deal, as they were not even discussed.
It would be helpful for the news orgs to had more light than heat to this. As such, it would be best to quit posting stories with weak sourcing. [The Huffington Post story is based on the belief of a "knowledgeable lobbyist" that the memo was prepared by someone "directly involved" in negotiations; neither the details of this person's involvement, nor why said lobbyist is "knowledgeable" about the matter is not disclosed. The memo hasn't been made public either.]
Based on what's known, it appears that PhRMA and the Senate Finance Committee hammered out a deal that the White House agreed to honor. But, the deal seems be more limited in scope than is being reported, and the White House does not seem to see it as being as binding (i.e., restrictive on price negotiation or seeking additional savings) as is being reported.
Orgs should seek more information on the deal, and refrain from knee-jerk postings until clearer and more compelling information is available.
August 13, 2009 4:06 PM | Reply | Permalink
Well said.
I personally have no problem if a deal was struck as long as everybody is up front about it.
That is my only problem with it is there wasn't transparency.
Again, I rather that PhRMA is on board than not.
August 13, 2009 4:20 PM | Reply | Permalink
I'm naive about these kinds of deals, but aren't backroom agreements supposed to stay there? By airing them out, aren't you essentially prohibiting them from existing? I really am not sure about the legitimacy of this memo, but if the details are true, I understand why the administration would rally for big PhRMA's support. I don't agree with it, I think it's like inviting a wolf to babysit the hen house, but I get how politics in Washington work and this deal seems consistent with that.
August 13, 2009 4:14 PM | Reply | Permalink
So the worst of both worlds is that Obama made this god-awful agreement and we're still getting hammered by the MSM for being "too liberal."
August 13, 2009 4:16 PM | Reply | Permalink
That's funny!
Any ways, I really like the new ad. I wish that they would show it EVERY where but they are just showing it in Blue Dog districts and states.
August 13, 2009 4:22 PM | Reply | Permalink
HuffPo says the memo was given to them by a health industry lobbyist. Come on!
August 13, 2009 4:23 PM | Reply | Permalink
Exactly! Why is Huffingtonpost believing a health care lobbbyist?
Also, if there was an actual internal memo than we should have SEEN the memo and on the Huffingtonpost there is no actual memo to see.
So all of this is suspect.
August 13, 2009 4:45 PM | Reply | Permalink
A health industry lobbyist who's either a braggart or suffers from a guilty conscience.
August 13, 2009 4:26 PM | Reply | Permalink
Or simply wants to sow some discord
August 13, 2009 4:38 PM | Reply | Permalink
But how would it help the lobbyist by sowing discord?
August 13, 2009 4:45 PM | Reply | Permalink
It's not a pharma lobbyist, it's a health care lobbyist shopping the thing. Health care, as in the people who are funding all the scary dark commercials with the ominous music and voice overs and the scary words flashed on the screen. Use the left's hatred of Pharma and unquenchable suspicion that Obama's going to sell them out to undermine support for the bill? You don't see why they'd want to do that?
August 13, 2009 5:00 PM | Reply | Permalink
That makes sense. Very Machiavellian.
August 13, 2009 5:15 PM | Reply | Permalink
As Machiavellian as telling people that Obama and the Democrats in Congress want to kill old people and Downs babies, take away their privately financed Medicare and impose a health care system on America that was copied from what the Soviets were doing in the late 70s, except with more bureaucracy?
August 13, 2009 5:55 PM | Reply | Permalink
Like I mentioned on Huffpost when they first posted this.
If we get coverage for almost everyone, no more pre-existing condition refusals and lower costs over the long run who gives a crap how we get there.
August 13, 2009 4:31 PM | Reply | Permalink
Having had some experience with insurance companies' jargon, I can tell you that "getting coverage" for something is not the same as "getting it paid for."
Pre-existing conditions could be subject to large co-pays or deductibles; who knows? I agree with all of the above who say that this is more of a rumor than a story, but don't feel like we are so lucky to get anything. Insurance companies do one thing extremely well:
Watch out for themselves and their profit margin. They are geniuses at wording things so that you think they will pay for it, but then they only pay a small amount. Stay tuned and stay vigilant.
Don't trust them -- they are the enemy!
August 13, 2009 4:52 PM | Reply | Permalink
I don't understand why these proposed bills don't get rid of the "doughnut hole" entirely. Or at a minimum allow seniors to buy insurance to cover it. Sine I'm a foreigner, the logic of the doghnut hole escaped me in the first place. I thought it was created by the Republicans to win brownie points with ... uh, erm, ... well, with someone who spent a lot of money in K Street. Anyhow, why not get rid of it?
August 13, 2009 4:36 PM | Reply | Permalink
You do realize HP never showed the MEMO.
These so-called details came from a rumor passed around K-Street.
August 13, 2009 4:38 PM | Reply | Permalink
Obama has been very shabbily advised.
It is useless to sit down at the table with any of these blood merchants. The ONLY option that will control costs is a single payer. To do that, you need to go to war with the health "care" corps and big pharm.
Get behind HR676, and offer those that play ball 10 years to be phased out. Those that resist get annihilated with the full power of HR676 immediately.
This is not reform, it is smoke and mirrors allowing Obama to get re-elected, while still giving the blood merchants their tax-payer funded profits.
It will not work, and the nation will fall. That is what is at stake.
Hope everyone has their visa ready for Canada.
August 13, 2009 4:42 PM | Reply | Permalink
Jesus H. Christ. When we've got crazy people toting guns and screaming their fool heads off under the mistaken belief that they're trying to pass a single payer plan, how in the hell can you still think it's possible to actually do it at this point?
You want single payer? Fine. Get out there and convince the crazy people--or at least the not so crazy ones who are beginning to wonder whether the crazy ones have a point--that it's in their interest, and the country's interest to do it. That's the only way it can happen. That's the only way it ever could happen. And, indeed, it's the only way that it ever should happen.
The continuing progressive belief, in the face of all evidence to the contrary, that it's possible for them to just ram things through Congress without worrying what the public thinks on the theory that eventually the lumpen proletariat will realize their intellectual betters knew what was best for them is, in some ways, just as exasperating and every bit as infuriating, as some angry old deather hollerin' about keepin' the guvmint outta her Medicare.
August 13, 2009 4:56 PM | Reply | Permalink
I hear what you are saying, but I must re-iterate:
There is no middle ground. There is NO way to do deals with the health "care" corporations or Big Pharm.
Permit to repeat what I am sure you know, but may be deciding to live with: The people make their profit by exploiting the suffering and, yes, the deaths of the citizens of this country.
They are making huge profits by making you and me go bankrupt at the end of our lives, taking all our life savings and by killing us. That is the people we are talking about.
So Yes, what we really need to do is ram things through Congress without worrying what the public thinks on the theory that eventually the lumpen proletariat will realize their intellectual betters knew what was best for them.
Very well put, and completely correct.
HR 676 or nothing. It is the only way to save the Republic.
August 13, 2009 5:22 PM | Reply | Permalink
That's all well and good. It's a crappy deal.
But we're missing the forest for the trees:
We won't get JACK if we don't actually fight the GOP.
HuffPo spends every goddamn day pushing crap like this, meanwhile GOP is getting away with murder.
This is swiftboating, make no mistake. And where is the response?
I repeat: Unless we fight GOP lies, we won't get ANY reform, whatever the details of this ephemeral "memo" are.
August 13, 2009 5:36 PM | Reply | Permalink
Both parties denied it on the record. Thus the major strokes of this "deal", as detailed in the "memo", can and will never, ever come to pass.
Not a bad move, actually.. sort of "reverse well-poisoning".
August 13, 2009 4:48 PM | Reply | Permalink
Where is the memo? There isn't actually one.
It is just heresay from a health care lobbyist who is nameless.
So much for good reporting.
August 13, 2009 4:59 PM | Reply | Permalink
Now the lefty blogosphere is credulous about anything health care lobbyists push. Because you know, they would never have an agenda or want to sow division, right?
August 13, 2009 5:24 PM | Reply | Permalink
Have to agree with Eric F, provided we pass a public option. Insurance is a larger part of the problem, cost wise. A public option with a tax on non-participating large employers that do not offer insurance (provided the tax is a bit lower than the average percentage of payroll contributions to coverage) will force insurance companies to compete with a public plan. The result in a perfect world would be a cleaning up of the inefficiencies in how private insurance is run (easier to deny and jack rates than abandon wildely inefficient fee-for-service schemes) and force insurance companies to squeeze suppliers for better rates (pharma particularly). It's reform through cutthroat competition rather than pure regulation (although regulatory changes are still required in regards to denying and dropping coverage, portability, etc.). If drug prices for private insurers drop, so will prices for gov't. single payer systems (since the biggest ones pay rates primarily based on average manufacturer price to the private market.) Pharma probably thinks this is a better deal than gov't. price negotiation and also gives the pro-reform side some much needed help on marketing the plan to the public.
August 13, 2009 5:02 PM | Reply | Permalink
What ever the merits, and they are highly debatable, I think liberals are missing the point here.
Spending every goddamn day in August scrutinizing Obama represents a total failure by the left blogosphere.
HuffPo in particular has had a daily drumbeat of sniping at Obama. They have big senationalist headlines and banner photos every other day -- not about "Death panels" and the horrendous lies of the GOP -- but about the Dems. What the hell is going on there?
Meanwhile the GOP and its cohorts in the MSM continue to shred the entire HCR effort.
Listen folks, HCR is being swiftboated while we pick out the drapery.
It feels like we don't even have a team on the field.
August 13, 2009 5:23 PM | Reply | Permalink
The memo is now on Huffingtonpost and it is a FAKE!!!!
The font on the memo looks like from a typewriter and the date on the top of July 7th is a DIFFERENT font from the rest of the memo.
Huffingtonpost got punked!!!!
This memo is a FAKE!
This is Huffingtonpost's "Kenyan birth certificate".
Too funny!
August 13, 2009 6:16 PM | Reply | Permalink