September 12, 2009 and After: Obama, Senate Democrat Work with Pharmaceutical Organization to Remove Key Medicare Provision from Health Care Reform

The Pharmaceutical Research and Manufacturers of America (PhRMA) acknowledges it has funded a series of television advertisements in support of legislation primarily written by Max Baucus (D-MT), chairman of the Senate Finance Committee, to reform US health care. The television ads are part of an agreement between the Obama administration, Baucus, and PhRMA in June, where the organization agreed to various givebacks and discounts designed to reduce America’s pharmaceutical spending by $80 billion over 10 years. PhRMA then set aside $150 million for advertising to support health care legislation. More progressive House Democrats such as Henry Waxman (D-CA) are pushing for stiffer drug industry givebacks than covered in the deal. PhRMA is led by Billy Tauzin, a former Republican congressman. Until recently, the organization spent some $12 million on ads by an offshoot coalition called Americans for Stable Quality Care, and aired television ads such as “Eight Ways Reform Matters to You.” PhRMA’s new ads will specifically support the Baucus bill. Many are critical of the deal, with James Love of the progressive research group Knowledge Ecology charging, “Essentially what the US got was not $80 billion, but $150 million in Obama campaign contributions.” [New York Times, 9/12/2009] Investigative reporter Matt Taibbi agrees with Love, accusing the White House of colluding with Baucus and Tauzin’s PhRMA to orchestrate a “big bribe” in exchange for the Democrats’ dropping of drug-pricing reform in the Baucus bill. Taibbi writes that in June, White House chief of staff Rahm Emanuel met with representatives from PhRMA and drug companies such as Abbott Laboratories, Merck, and Pfizer to cut their deal. Tauzer later told reporters that the White House had “blessed” a plan involving the $150 million in return for the White House’s agreement to no longer back government negotiations for bulk-rate pharmaceuticals for Medicare, and to no longer support the importation of inexpensive drugs from Canada. Taibbi writes that the White House worked with Baucus and PhRMA to undercut Waxman’s attempts to give the government the ability to negotiate lower rates for Medicare drugs. PhRMA’s ads are being aired primarily in the districts of freshmen Democrats who are expected to face tough re-election campaigns, and in the districts of conservative “Blue Dog” Democrats, who have sided with Baucus, Obama, and PhRMA to oppose the Waxman provision in favor of PhRMA’s own provision, which would ban the government from negotiating lower rates for Medicare recipients. [True/Slant, 9/14/2009]