PhRMA last month secured a wishy-washy public confirmation from the White House that they had an agreement, and promptly launched the first installment of a big pro-reform ad campaign, but confusion reigned over the question of exactly what they got for it. Whatever the details —and it appears the deal hashed out between PhRMA’s Billy Tauzin and Senate Finance Committee chair Max Baucus (D-MT) deliberately fudged them—the short answer for both parties is probably “protection.” For PhRMA, protection from importation, price controls and the anti-industry congressional zealots who love them. For the White House, protection from PhRMA’s deep war chest and unrivalled lobbying and advertising prowess as it takes on another feared Washington lobby, that of the health insurers.
The ad, aimed at centrist lawmakers and funded primarily by PhRMA in partnership with other groups, is pretty tame stuff, but the numbers attached to the campaign—reports said PhRMA could spend $150-$200 million on pro-reform efforts—were eye-popping. The ad also hit 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. PhRMA called direct government negotiation of drug prices for Medicare patients, as legislation passed by the House Committee on Energy and Commerce would allow, a deal breaker.
“We were assured: ‘We need somebody to come in first,” Tauzin told the New York Times. “If you come in first, you will have a rock-solid deal.”
The White House obligingly 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), said they sure didn’t have any deal with the drug industry. Waxman said PhRMA was looking for a “bargain.” Pelosi said if the group was offering $80 billion in savings, government could wring $160 billion out of them.
PhRMA’s Johnson said the group’s pledge did not come with any strings attached. Not any specific ones, anyway. “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.”
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,” he said. “We ought to do it the way that results in the fewest job losses possible.”
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.”