The White House Deal with Big Pharma

The front page of today's New York Times has an article by David Kirkpatrick, confirming more details of the White House deal with big pharma. (Be sure to read the original, and support the NYT)

For anyone who didn't notice earlier, this description by PhRMA CEO Billy Tauzin spells out the dynamics:

Pressed by industry lobbyists, White House officials on Wednesday assured drug makers that the administration stood by a behind-the-scenes deal to block any Congressional effort to extract cost savings from them beyond an agreed-upon $80 billion. . .

"We were assured: 'We need somebody to come in first. If you come in first, you will have a rock-solid deal,' " Billy Tauzin, the former Republican House member from Louisiana who now leads the pharmaceutical trade group, said Wednesday. "Who is ever going to go into a deal with the White House again if they don't keep their word? You are just going to duke it out instead."

. . .

Mr. Tauzin said the administration had approached him to negotiate. "They wanted a big player to come in and set the bar for everybody else," he said. He said the White House had directed him to negotiate with Senator Max Baucus, the business-friendly Montana Democrat who leads the Senate Finance Committee.

Mr. Tauzin said the White House had tracked the negotiations throughout, assenting to decisions to move away from ideas like the government negotiation of prices or the importation of cheaper drugs from Canada. The $80 billion in savings would be over a 10-year period. "80 billion is the max, no more or less," he said. "Adding other stuff changes the deal."

Some elements of the deal have been reported earlier in the NY Times and other newspapers, as well as in this report in the LA Times by Tom Hamburger, but experts following pharmaceutical issues doubt that the full extent of the dealings between big pharma, the White House and Senator Baucus are known.

The crushing defeat of the proposals by Senator Brown and Representative Waxman to speed entry of generic biologic medicines (known as biosimilars), was partly due to the hands-off approach taken by the White House, which was been widely read as a green light for Democrats to side with big pharma on a hugely important issue that will be extremely difficult to fix later. (More on this issue here).

The so-called cost savings from big pharma of $8 billion per year for 10 years are a joke for an industry that generates more than $300 billion in US sales from products that mostly replicate but do not significantly improve therapeutic benefits over existing medicines. Moreover, the "savings" will likely take the form of lower consumer co-payments for medicines or small discounts of reimbursements for expanded government backed insurance programs. PhRMA and its members are also getting mandatory insurance coverage, and increased legal obligations to buy their expensive drugs. The White House has abandoned any real effort to control costs in the pharma sector.

Unreported by the press are the favors that the White House and Baucus are doing in the international arena. The White House has slapped and pressured Thailand for issuing compulsory licenses on medicine patents, killed an industry-opposed medical R&D treaty at the WHO (here and here), opposed a PAHO resolution on transparency of pharmaceutical economics, and collaborated on a disastrous manipulation of a WHO Expert Working Group on R&D Financing that is embracing industry norms for intellectual property protection. The Administration has refused to answer questions from the TransAtlantic Consumer Dialogue (TACD) on intellectual property aspects of pandemics. The White House won't release the negotiating text of the so-called "Anti-counterfeiting Trade Agreement," or even the names of the documents they are withholding, claiming they are state secrets. (More details here)

Senator Baucus is also working on proposals to mandate high drug prices in all but the poorest developing countries. Senator Baucus asked that Pfizer CEO Jeff Kindler (a frequent White House guest these days) work out the details with the late Professor John Barton, in secret negotiations attended mostly by pharma industry lobbyists, and Microsoft officials.

Tauzin asks who can trust a White House that does not keep it's promises. Good question. One might start by asking what to make of this October 4, 2008 stump speech by President Obama.

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Comments

[Imperceptus]

James Love spreads the rumor of a secret deal Big Pharma even though the White House today denied any such deal has been made. Reported for spreading disinformation.
http://www.whitehouse.gov/blog/Facts-Are-Stubborn-Things/

[plaidsportcoat]

I can't find the articel that was on HP August 6 that said the wh denied tauzin's comments.

Must have been deleted because it wasn't true.

[Mason]

Obama's secret backdoor deal with Big PhRMA less than 6 months after his speech on October 4, 2008, is as damning an indictment of a liar as I've ever seen and the smoothness with which he delivers his lies is appalling. We cannot trust him to tell the truth about anything, and to protect ourselves, we must assume that every thing he says from now on is a lie. Unfortunately, trust once broken cannot be repaired.

This is a terrible tragedy because we so desperately need a leader we can trust to lead us out of the wilderness into which Bush and Cheney plunged us. Obama so clearly is not the right man for the job, and based on what he's done so far, we are worse off than we were before he took office.

If we had a parliamentary form of government, we could get rid of him now with a vote of no confidence. Instead, we're stuck with him until the 2012 election and that is profoundly depressing.

[Hiphopcrates]

Anyone else feeling screwed?

[hsr0601]

Immune System & Levee System :

All of the excellent health systems seem to have one thing in common, a well-organized preventative program.

I think a prevention system works as a 'levee' built against flood by the government, similarly, it also needs non-profit investments from the government 'on a large scale'.

This might offer us the clue of why all of the free states have public insurance policy in place.

It won't be easy to draw some specific numbers on the economic effect of the 'levee' , but the flood measure lacking a stable 'levee' would be a house on the sand, as the too high level of 'preventable' chronic diseases in America shows.

Presently, about 75 percent of each health dollar goes to treating chronic conditions.
If current health care system could shift a small percentage of total spending into programs that help prevent people from getting sick in the first place, it would dramatically reduce the overall cost of care.

"An ounce of prevention is worth a pound of cure.", said Benjamin Franklin

Thank You !

[nash2]

In a few years, without real reform, the whole healthcare system is going to collapse because of a complete lack of cost controls.

[altarboy]

Supporters of the health care initiative are currently being asked to join in the local work of contacting others to add to that support while the White House is making deals to subvert the very issue we have been asked to help with. Isn't that hypocrisy? Isn't now the time for talking a firm stand in favor of reform? I'm in favor of single-payer but am at least open to a well formed "public option" if it actually reverses the trend of increasing health care insurance and drug costs.

[DaveVentura]

The WH is guaranteeing PhRMA et al a price increase in exchange for blocking legislation PhRMA doesn't like. What happens if PhRMA members just completely ignore the deal and raise prices even more? Like what mechanism is there in the secret deal that would provide penalties to Pfizer et al? This just seems like a huge amount of pork to PhRMA with absolutely no way to prevent them from raising prices even more than they agreed to. Assuming that the WH really had people's best interests in mind rather than corporations when they did this, what are they going to do a if a year from now PhRMA members raise drug prices by 12% - will the WH say they want to reform their own reform because PhRMA didn't do their part? The WH owes full transparency on this and they should have been fully transparent from the beginning. The WH needs to be transparent on what other backroom deals have been made and the terms of those deals. Not that I'm a fan of single payer, but it smells to high heaven how the White House is an open door for healthcare corporate lobbyists, but single payer advocates are shut out and who knows what other non-corporate types have been barred by the White House from playing a role.

[DaveVentura]

The agreement with PHRMA is a guaraneed price increase. In exchange for letting them RAISE THEIR PRICES they block Canadian import of drugs as well as price negotiation. No wonder the White House has been doing these secret backroom deals and actively trying to prevent transparency. Just look at Obama on OpenSecrets.org and you can see that this is his version of the Cheney Energy Task Force, but this isn't the only backroom deal that he cut. Obama said these negotiations would be televised - so where is the Tauzin/Obama video with him agreeing to let Tauzin raise drug prices in exchange for there not being price negotiations or drug imports? Remember if you don't like these sweetheart backroom deals, it is YOU who will be called an ASTROTURFER!

[SicPlurisPoenaPrestantia]

Honestly, the best result for everyone, I believe, is to split off Pharmaceutical and medical device patent law from the rest and re-negotiate with Big Pharma. You want generics moved to market quicker? Give the pharma companies longer residual licensing rights in exchange for a quicker move to generics. You want cheaper, safer drugs? Beef up the clinical research process with real patient protections and data transparency while AT THE SAME TIME reducing the potential pharma liability for properly-studied meds that turn out to have regular serious adverse events. While you're at it, make it possible for the Department of Health and Human Services to buy out a particular drug patent and make it freely manufacturable in exchange for 150% of the actual cost of drug development and testing. Or something. We treat the development of life saving drugs with the same set of laws that we use to patent a toaster. Patient safety and informed consent and all the other issues that add to drug costs need to be reformed to better meet the need. A mutually beneficial and profitable way can be found, but as long as we leave patent law unreformed, Big Pharma is going to game the system.

Most Big Pharma folks actually want health care reform. But they also want to remain profitable. And they're a lot more willing to play ball than, say, the health insurance companies.

[plaidsportcoat]

What exactly is profitable - and show me all the proof when you answer.