Waxman about to double-cross pharmaceuticals on ObamaCare?

posted at 3:55 pm on August 26, 2009 by Ed Morrissey

Barack Obama picked up considerable political support for his overhaul of the American health-care system by promising a limit on price concessions to the pharmaceutical manufacturers.  They signed onto ObamaCare after getting assurances that their givebacks would amount to no more than $80 billion over 10 years and that the federal government would not try to bargain for lower pricing using its advantage through Medicare.  Henry Waxman plans to renege on just about every aspect of that agreement:

As the health care debate focuses on whether cost cuts are looming in Medicare coverage, Representative Henry A. Waxman is on a crusade to save Medicare billions of dollars — in a way that he says would end up helping the elderly.

That is because the money would come from the drug industry, which is why Mr. Waxman may have a fight on his hands.

Drug makers contend they have already worked out a 10-year, $80 billion cost-savings deal with the White House and crucial Senate gatekeepers on the trillion-dollar health care overhaul. The industry says that trying to add Mr. Waxman’s provision could scuttle that agreement.

“You not only break the deal, but you break the bank for us,” said Billy Tauzin, chief executive of the drug industry’s trade group, the Pharmaceutical Research and Manufacturers of America, known as PhRMA.

Waxman says that the pharmas got a big windfall when Congress and the Bush administration enacted Medicare Part D, which ended Medicare’s ability to negotiate prices on drugs.  As a result, prices went up 30%, according to Waxman, and manufacturers got a bigger share of the market at the same time.  Now he wants to punish the industry for its big win by forcing bigger concessions than Obama got.

However, the numbers don’t really add up.  Waxman accuses pharmas of getting a $3.7 billion windfall in the program’s first two years.  Projected against a ten-year window, that would amount to less than $20 billion, or about a quarter of the concessions Obama already got from the drug makers.  If correcting an injustice is Waxman’s real concern, then he should be more than satisfied with Obama’s deal.  Waxman’s crusade shows that he has something else entirely in mind for his version of ObamaCare.

Waxman may force the pharmas to switch sides, and this may be a particularly bad time to do that.  Liberal activists might rejoice that they can attack one of their betes noirs, but it’s likely to further estrange moderates from health-care reform.  With ObamaCare already sinking in popularity to Edsel proportions, alienating even more people is a recipe for electoral disaster, especially when done in the service of a government takeover of an industry.

As for the pharmas, maybe they’ll wake up and smell the statist coffee now.  I have no sympathy at all for them in their sudden shock, shock! that Democrats in Congress have no intention of being their allies on health-care reform.  For that, they get the Louis Renault Award:

Update: Henry Waxman as Darth Vader?

“I am altering the deal. Pray I don’t alter it any further.”


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Comment pages: 1 2

Good for Waxman.

There shouldn’t be any such deals. If government is going to take over health care, then the last thing they need to do is to be hemmed in by some back room deal with big Pharma.

(Of course I don’t want gov. to take over healthcare, but if it does, then I will not cry if it screws over those who made deals with the devil like this.)

Kasper Hauser on August 26, 2009 at 4:49 PM

I, for one, would be very happy to see Big Pharma get a good kick in he rear. Big government for the benefit of big business under Bush was bad enough. I occasionally get in arguments with my conservative friends about this, because the conservative distrust of big government is absolutely no excuse for not having at least a similar amount of distrust for big business.

NorthernCross on August 26, 2009 at 4:55 PM

While I think it’s stupid that “big pharma” (as libs say) made a deal with Obama, at least the deal would have allowed the drug companies to keep their money for research. That’s one of the major issues with socialized medicine, is that it kills research and development.

The U.S. produces and create 95% of the drugs that are on the market right now throughout the world. Yet we only have 3% of the world population.

MobileVideoEngineer on August 26, 2009 at 5:07 PM

The greed and incompetence of the Rats may be enough to save us from the scourge of Communism…maybe.

el Vaquero on August 26, 2009 at 4:10 PM

They are on the fast track.

Johan Klaus on August 26, 2009 at 5:09 PM

I’m going to be driving past Claude Rains’ grave tomorrow. Any messages?

Del Dolemonte on August 26, 2009 at 5:13 PM

Not to worry. They’ll make up whatever shortfall there is when Obama frog marches us all into the local clinic for our mandatory swine flu shots this fall.

NoLeftTurn on August 26, 2009 at 5:13 PM

Wow, they’d never pay me to be their consultant, but I could have told those lumpschitz that they’d get the shank from the most ethical congress ever. That’s what democrats do. Just ask, say, maybe the South Vietnamese. Never trust a li(e)beral.

mr.blacksheep on August 26, 2009 at 5:18 PM

Is that the same Billy Tauzin, who for 25 yrs was in the House of Reps for Louisiana’s 3rd? And is now a high-paid lobbyist for big pharma? Getting the shaft from his former HR buds? Bummer.

Mr. Pickles

Yeah, really — he shoulda knowed better than to trust a Democrat!

Paul_in_NJ on August 26, 2009 at 5:19 PM

BWAAAAHAAA!! Reap it Tauzin you maroon!

ginaswo on August 26, 2009 at 5:25 PM

of all the playas in this line of business that could be ‘squeezed’ as Pelosi likes to say, PHARMA was the one with the biggest profit margins and deepest pockets

Interesting to note in all the Kennedy chatter today that it was Teddy who cut the deal with big pharma on Medicare D also, it was he who gave up negotiating for Medicare on the drug costs, so guess his little brother followed in his footsteps…

ginaswo on August 26, 2009 at 5:28 PM

Place your trust a rat-faced “public servant” weasel and you get what you deserve.

bannedbyhuffpo on August 26, 2009 at 5:38 PM

While I think it’s stupid that “big pharma” (as libs say) made a deal with Obama, at least the deal would have allowed the drug companies to keep their money for research. That’s one of the major issues with socialized medicine, is that it kills research and development.

The U.S. produces and create 95% of the drugs that are on the market right now throughout the world. Yet we only have 3% of the world population.

MobileVideoEngineer on August 26, 2009 at 5:07 PM

Well, if they’re so effective at research, then they can do it WITHOUT our help. No more GOP/Dem-style bailout for big business!

NorthernCross on August 26, 2009 at 5:48 PM

Kinda brings to mind: “First they came for the communists, but I wasn’t a communist. Then they came for the ……”

Looks like Waxman is going to take out big PHARMA first. Wonder who else made a ‘sweetheart deal’, but doesn’t know: “you’re next”.

GarandFan on August 26, 2009 at 5:51 PM

NorthernCross on August 26, 2009 at 5:48 PM

Bailouts for financial industry: check
Bailouts for Auto industry: check
Bailouts for Pharma: What bailout might you be talking about.

chemman on August 26, 2009 at 6:20 PM

Mr. Pig-Face cried wee-weed all they way home.

Vote this Statist out!

SalHansen on August 26, 2009 at 6:29 PM

Waxman may be a “usefull idiot” working FOR us for a change. If he wants to unwind the deal 0bama made with Pharma good for him b/c anything that sews discord on that end brings the bill closer to defeat.

Lou Budvis on August 26, 2009 at 6:59 PM

Waxman backstabbing?Say it ain’t so.

DDT on August 26, 2009 at 7:19 PM

On this one i agree with you totally
What were they thinking??

Did they really believe they could make a deal with obama and the liberals and expect the DEAL to STAND?

What are you kidding me?
Thats like putting a drug addict in charge of the drug dealers secret stash then acting surprised when he comes back to find it all gone…

MORONS..
you cant make deals with the devil..
or darth waxmax err .. vader.
http://www.veteranoutrage.com

veteranoutrage on August 26, 2009 at 8:21 PM

Throughout my whole lifetime, even during the Carter administration, a congressman who publicly undercut a deal made by the president did so at the very real risk of taking a long walk on a short plank. Yet here we have Waxman doing so, apparently with not even a whiff of concern about possible retaliation from Obama. This, to me, is the most convincing proof yet that Obama is completely green and unrespected by Democrats and Republicans alike. The Obama administration is a clueless slow-motion train wreck in progress.

jwolf on August 26, 2009 at 4:10 PM

Tin foil hat says: Waxman just gave the Won plausible deniability on stabbing big Pharma in the back, which he was always planning to do.

Promises have expiration dates.

cobrakai99 on August 26, 2009 at 9:07 PM

Don’t think for a moment that Earwax wasn’t following Oboingo’s script.

mr.blacksheep on August 26, 2009 at 9:28 PM

Life will be difficult for Obama, Durbin and Bean if Waxman or Obama screw Pharma’s secret(now exposed) deal. Dance with that hot potato…

http://www.thelabrat.com/jobs/companies/BiotechIllinois.shtml

journeyintothewhirlwind on August 26, 2009 at 10:23 PM

And that list is just the tip of the iceberg:

684 Pharma listed for Illinois:

http://www.manta.com/mb_43_D2_14/pharmaceuticals/illinois

journeyintothewhirlwind on August 26, 2009 at 10:29 PM

no non-evil person has ever voted for Waxman. a lot of evil people in his district.

proconstitution on August 26, 2009 at 10:31 PM

I hope Waxman double-crosses the Pharma companies. It’s bad enough when these ethically challenged politico’s trample on the American people, but I like it when they try to stick it to corporations. The corporate lobby arm is longer than that of the long arm of the law….Ok maybe not arm but they do have deeper pockets and financial resources to fight back.

AASLT on August 27, 2009 at 9:30 AM

Waxman looks like eyore to me. We all know he’s a jackass.

TrickyDick on August 27, 2009 at 1:44 PM

Any chance that Pharma knew all along this was coming and has a counter-strategy?

tanarg on August 27, 2009 at 10:00 PM

Comment pages: 1 2