PhRMA will launch a big advertising push for healthcare reform later this week, with TV spots airing in key states and on cable channels nationally.
The ads stress the importance of ensuring that patients aren't denied coverage because of pre-existing conditions, cutting red tape, placing a cap on out-of-pocket expenses and ensuring that nobody comes between patients and physicians when it comes to healthcare decision-making. The ads will air in 12 states, including Arkansas, Colorado, Indiana, Louisiana, Maine, Montana and Nevada – all of which are represented by centrist senators – and will run through the first week of September, when, with Congress back in session, PhRMA will reassess its ad strategy.
News outlets including The New York Times and the Associated Press put spending on the ads in the range of $150 million – a figure that PhRMA SVP Ken Johnson called “speculative.” Johnson declined to say whether the group was working with an agency on the campaign. Print ads will follow later on.
The campaign comes at a time that all parties agree is make-or-break for healthcare reform, with Congress in recess and the shape of the legislation still very much in play. The ads also break amid an acrimonious back-and-forth between the White House and a congressional “Soak PhRMA” faction over the group's pledge to find $80 billion in cost-savings — and what it's getting in exchange.
PhRMA opposes efforts to grant government the power to haggle with companies over drug prices for Medicare patients, as legislation passed by the House Committee on Energy and Commerce would do, and has called such price controls a deal breaker.
“We were assured: ‘We need somebody to come in first," PhRMA chief Billy Tauzin (pictured) told the Times. "If you come in first, you will have a rock-solid deal."
The White House has reaffirmed its support for that position, in light of PhRMA's pledge to patch the “doughnut hole” coverage gap in the Medicare prescription drug benefit. Legislators including House Speaker Nancy Pelosi (D-CA), Energy and Commerce Chair Henry Waxman (D-CA) and Sen. Sherrod Brown (D-OH), have blasted the agreement.
“PhRMA would like to see if they can get a bargain,” Waxman was quoted as saying in the Times last week. “I think that PhRMA should contribute more than PhRMA wants to contribute.”
The White House, in response, has reaffirmed its support for the deal while adding to the confusion over what, precisely, that might entail. PhRMA's Johnson said the group's $80 billion pledge, worked out with Senate Finance Committee chair Max Baucus and hailed by the White House, did not come with any strings attached.
“There was no secret deal with the White House,” said Johnson. “We negotiated a policy agreement with the Senate Finance Committee which the White House blessed. There were no specific assurances, but early on, when we were asked to be partners in the healthcare reform, we made it very clear that a line in the sand for us was price controls, and that if you want us to be a partner in this, we can't have price controls.”
Instead of specific protections, the agreement consisted of a number and a direction amenable to PhRMA, said Johnson.
“There are a lot of different ways to get to $80 billion,” said Johnson. “We ought to do it the way that results in the fewest job losses possible. You could do it simply through price controls, but that would wreak havoc on the industry. So instead we opted for a series of rebates and fees on the industry, but at the end of the day, it comes to $80 billion that can be used toward reducing healthcare costs.”
John Kamp, executive director of the Coalition for Healthcare Communication, said Congressional Budget Office scoring showing a negligible return on price controls absent a European-style formulary makes it a moot point.
“The price control issue may be more of a political reality issue than a real dollar issue,” said Kamp, adding: “I don't think Billy or Barack can do without each other. Barack needs Billy to get the savings and the political support, and after all the griping about a PhRMA deal, the liberals still have to vote in favor of whatever bill ensues.