Caught between a pivotal industry ally and the protests of Congressional Democrats, the Obama administration on Friday backed away from what drug industry lobbyists had said this week was a firm White House promise to exclude from a proposed health care overhaul the possibility of allowing the government to negotiate lower drug prices under Medicare.
This is the lede in a NYT article about Obama's backing away from what the industry clearly thought was a deal to keep the government from negotiating drug prices–you know shades of the Bush Medicare Prescription Bill. And despite the article headline and lede, it's not at all clear that Obama is backing away:
The drug industry lobbyists appeared to make peace with the White House over the terms the deal as well. The industry had reached an agreement with the White House in June to contribute $80 billion over 10 years to the cost of the health care overhaul but cap its share of the costs at that level. And since striking the deal, the drug industry lobbyists had become a vital and thus powerful White House ally, even helping to bankroll a million-dollar advertising campaign in support of the health care overhaul.
But the industry reacted with alarm when, despite its deal the White House, a House version of the health care measure included both new price rebates and government price negotiations. House leaders talked of trying to extract far more.
As recently as Wednesday, Billy Tauzin, president of the PhRMA, the Pharmaceutical Research and Manufacturers of America, had all but threatened to reverse the group’s support for the health care overhaul if the White House did not affirm its commitment to cap the industry’s costs at the agreed-upon $80 billion. He insisted that adding government price negotiations or additional drug price rebates would both violate the agreement, saying each idea had been discussed and discarded in negotiations with the Senate Finance Committee that the White House later approved.
On Friday night, however, the drug industry lobby appeared to line up once again with the White House, perhaps satisfied that the White House had at least ruled out the price rebates in the House bill.
At the very least, this story illustrates the murky character of Obamacare and the murky, amateurish way in which the Obama people are managing this. We really don't know what it entails, so how can we defend it?
And, I'm sure, this betrays my naivete, but will someone enlighten me as to why the Obama administration needs the Pharmaceutical industry as "pivotal industry ally"? Is it just about the $80 billion? How does that compare to the savings we would derive from price negotiations over the long haul? It's good to have allies, but not at the cost of gutting essential provisions of substantive reform. And if controling costs–a big component of which is the ridiculous margins on pharmaceutical prices to consumers–isn't an essential provision, what is?
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Sunday Morning Update: Frank Rich in his column today makes the same points:
In this maze of powerful moneyed interests, it’s not clear who any American in either party should or could root for. The bipartisan nature of the beast can be encapsulated by the remarkable progress of Billy Tauzin, the former Louisiana congressman. Tauzin was a founding member of the Blue Dog Democrats in 1994. A year later, he bolted to the Republicans. Now he is chief of PhRMA, the biggest pharmaceutical trade group. In the 2008 campaign, Obama ran a television ad pillorying Tauzin for his role in preventing Medicare from negotiating for lower drug prices. Last week The Los Angeles Times reported — and The New York Times confirmed — that Tauzin, an active player in White House health care negotiations, had secured a behind-closed-doors flip-flop, enlisting the administration to push for continued protection of drug prices. Now we know why the president has ducked his campaign pledge to broadcast such negotiations on C-Span.
The making of legislative sausage is never pretty. The White House has to give to get. But the cynicism being whipped up among voters is justified. Unlike Hillary Clinton, whose chief presidential campaign strategist unapologetically did double duty as a high-powered corporate flack, Obama promised change we could actually believe in. . . .
It’s a measure of how out of touch G.O.P. leaders like Mitch McConnell and John Boehner are that they keep trying to scare voters by calling Obama a socialist. They have it backward. The larger fear is that Obama might be just another corporatist, punking voters much as the Republicans do when they claim to be all for the common guy. If anything, the most unexpected — and challenging — event that could rock the White House this August would be if the opposition actually woke up.
The question I've been asking all along in this blog once again rears its ugly head: Have things too far gone for anyone to fix it? When the behind-the-scenes machinations are this blatant and obvious and yet they still get away with it, the next thing we'll find is that the corporations won't even be trying to spin or justify it. Why should they bother? It's not like anybody can do anything about it.
Having destroyed what was once a proud, whiggish, progressive tradition on which the Republican Party was founded, like a hoard of locusts corporate interests now swarm over to the Dems to destroy what's left of its populist traditions. In the end we'll just have an un-apologetically crony-capitalist corporate state with ceremonial elections like Mexico's in the heyday of the PRI. Hey, life goes on.The average guy won't notice a thing, but the American idea will have died.
It could be that Obama is doing everything he can to fulfill his campaign promises and rhetoric, and has discovered that it's simply not possible to deliver. If so, then it would appear that we have passed the point of no return. Obama's candidacy was for me the last hope that something could be done
to revive the American idea and get things moving back toward sanity and health, and while certainly he
deserves more time to prove otherwise, he looks so far to be just
another example of an impotent do-as-you're-told pol.
But there is still a flickering flame of hope that Obama will adjust, and that he will fight. This healtcare battle will be the litmus test. I'd rather see him fight and lose than just get swept along in the corporate flow. I think he's capable of a defining moment, of doing something unpredictable, of flipping the applecart and proving wrong all those who scoffed at the idea that Obama was a transformative political figure. Prove to us, BO, that you're not just another hack.
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