09/06/2009 05:12 am ET | Updated May 25, 2011

Obama Deal With Drugmakers Sparks Debate Over Reform

The White House backtracked slightly on Thursday from reports that it had made a hugely significant and binding backroom deal with the pharmaceutical lobby.

Articles in Wednesday's Los Angeles Times and Thursday's New York Times reported that President Obama had committed himself to blocking any congressional efforts to extract more money from drug makers beyond their pledge to cut $80 billion in costs over 10 years.

But White House spokesman Robert Gibbs said that the administration had "not laid down any sand" or "drawn any line" about what type of pharmaceutical industry-related reforms were on the table.

"The goal of all of those at the table, particularly the president, is to see costs come down and to see progress made on that but I don't want to get ahead of negotiations," Gibbs said. "I think that everybody shares the goal of cutting costs for health care but beyond that, I'm not going to get into the specifics."

The New York Times story said that the White House acknowledged that it had "encouraged" an arrangement with industry officials whereby they would reduce projected costs by $80 billion -- and In exchange, the government would not use its negotiating powers to influence the market and would not seek to extract any other money from the industry to pay for a health care overhaul.

On Thursday, Gibbs said the White House was not weighing in on legislation currently being considered by the House of Representatives that would cut against such an arrangement. He did, however, say that the White House felt "comfortable with the amount of money that has been talked about at this point."

News that the White House may have tied its own hands when it comes to finding measures to pay for reform or generate savings came as an irritant for some in the progressive community.

"The irony about the deal, the thing that is so stunning, was this was the thing that Democrats isolated and criticized about the Bush prescription drug plan. It was the example of selling out to the drug companies," said Bob Borosage, co-director of Campaign For America's Future. "It was a pure lobby effort.... It is just unacceptable. [House Speaker Nancy] Pelosi has fortunately stated that she is not bound by any deals that are cut that were made with the White House. And this will be a test."

More than just facilitating a discussion over prescription drug policy, Thursday's news spurred another round of debate over Obama's entire approach to health care reform; particularly his willingness to involve private industry stakeholders.

The White House is keen on noting that it has kept groups traditionally known for fighting reform at the negotiating table. Increasingly, however, progressives are wondering about the cost of this approach. As a candidate for president, Obama lashed out at drug companies for preventing Medicare from negotiating lower drug prices for its patients. As president, a major partner in his efforts at health care reform has been the subject of those attacks: Billy Tauzin, president of the Pharmaceutical Research and Manufacturers of America (PhRMA).

Indeed, throughout the past six months, Obama and his top aides have routinely consulted with some of the titans of the private health care, insurance and pharmaceutical industries.

Jeff Kindler, the chairman and CEO of the pharmaceutical giant Pfizer, whose employees donated $124,053 to Obama's presidential campaign, has met with the president three times to talk health care. Karen Ignani, the president and CEO of America's Health Insurance Plans whose employees contributed only $2,251 to the Obama campaign, has visited the White House four times. Tauzin, whose association contributed a scant $3,555 to the Obama campaign, has visited the president four times. And Stephen Hemsley, CEO of the UnitedHealth Group, a managed care and insurance company that contributed nearly $30,000 to the Obama campaign and $50,000 to his inauguration committee, has visited the White House twice.

The list of attendees has irritated progressives, many of who worry that the increased access means increased influence.

"The whole health reform issue is extraordinarily complex and one of the worries I have ... is the sources providing input in terms of developing policy," said Dr. David Scheiner, a 70-year-old Chicago-based physician who treated Obama for more than 20 years. "Are there any primary care physicians who have been in the field 50 years providing the expertise? Or are there people from the university centers who aren't worried about people?"

But those who have worked alongside the administration insist that, without these consultations, the White House would have found itself in a bigger pickle than it is now. As one Democratic operative noted, PhRMA has so far kept its powder dry, running ads that vaguely support the need for reform. "We'd rather have their ad money now and deal with the drug industry at some other time," the operative said.

Borosage was more torn. "This is the hard question," he summarized. "It is hard to know whether it was necessary or not to get a bill done, given the balance of forces in DC. What it does make clear is that for progressive it is incumbent upon us to organize separately and draw big red lines around things like the public plan."

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