Study in crony capitalism: ObamaCare and Big Pharma

posted at 11:21 am on June 12, 2012 by Ed Morrissey

On one hand, the links between the White House and the pharmaceutical industry looked like an Odd Couple pairing on Barack Obama’s attempts to pile massive regulation on the health-care industry.  With the new powers that ObamaCare granted, the administration can — and did — demand massive givebacks from pharmaceutical companies in order to make the PPACA appear fiscally sound.  On the other hand, it allowed drug companies an unprecedented level of access to draft regulations on itself that would guarantee big profits with the imprimatur of government mandates and enforcement.  The Wall Street Journal spent the last few days parsing the latest Friday-night document dump from the Obama administration in the House Energy and Commerce investigation into collusion and corruption related to ObamaCare’s passage, and advises that those who are already angry over crony capitalism in Washington aren’t nearly angry enough:

On Friday House Republicans released more documents that expose the collusion between the health-care industry and the White House that produced ObamaCare, and what a story of crony capitalism it is. If the trove of emails proves anything, it’s that the Tea Party isn’t angry enough.

Over the last year, the Energy and Commerce Committee has taken Nancy Pelosi’s advice to see what’s in the Affordable Care Act and how it passed. The White House refused to cooperate beyond printing out old press releases, but a dozen trade groups turned over thousands of emails and other files. A particular focus is the drug lobby, President Obama’s most loyal corporate ally in 2009 and 2010.

The business refrain in those days was that if you’re not at the table, you’re on the menu. But it turns out Big Pharma was also serving as head chef, maître d’hotel and dishwasher. Though some parts of the story have been reported before, the emails make clear that ObamaCare might never have passed without the drug companies. Thank you, Pfizer.

According to the trove of e-mails that the WSJ published today, there appears to be a direct quid pro quo payoff to the drug companies for some badly-needed PR efforts on behalf of the administration, in exchange for limiting the amount that Congress would seize from drug companies:

Energy and Commerce Chairman Henry Waxman then announced that he was pocketing PhRMA’s concessions and demanding more, including re-importation. We wrote about the double-cross in a July 16, 2009 editorial called “Big Pharma Gets Played,” noting that Mr. Tauzin’s “corporate clients and their shareholders may soon pay for his attempt to get cozy with ObamaCare.” …

The White House rode to the rescue. In September Mr. Hall informed Mr. Kindler that deputy White House chief of staff Jim Messina “is working on some very explicit language on importation to kill it in health care reform. This has to stay quiet.”

PhRMA more than repaid the favor, with a $150 million advertising campaign coordinated with the White House political shop. As one of Mr. Hall’s deputies put it earlier in the minutes of a meeting when the deal was being negotiated, “The WH-designated folks . . . would like us to start to define what ‘consensus health care reform’ means, and what it might include. . . . They definitely want us in the game and on the same side.”

In particular, the drug lobby would spend $70 million on two 501(c)(4) front groups called Healthy Economy Now and Americans for Stable Quality Care. In July, Mr. Hall wrote that “Rahm asked for Harry and Louise ads thru third party. We’ve already contacted the agent.”

In other words, the drug companies paid $70 million in political advertising, which directly benefited the Obama administration and its legislative effort, to keep Waxman from seizing another $70 billion in the payback mechanism.  That raises a few questions, not the least of which is whether Waxman was serious at all about his threat, or whether the White House coordinated it to extort big PR bucks from the pharmaceutical industry.  Clearly, though, the White House provided a quid pro quo for that public show of support, resulting in a big expenditure on their behalf.

Read the whole article, and be sure to bring your airsickness bag.  The WSJ is correct: the Tea Party isn’t nearly angry enough over crony capitalism in the Obama administration, and especially in ObamaCare.


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According to the trove of e-mails that the WSJ published today, there appears to be a direct quid pro quo payoff to the drug companies for some badly-needed PR efforts on behalf of the administration,
================

There seems to be a patternization by Team Obama!!

canopfor on June 12, 2012 at 11:28 AM

Why isn’t stuff like this illegal?

The Rogue Tomato on June 12, 2012 at 11:29 AM

Payback? I’m SHOCKED! SHOCKED! I tell you!

Next I suppose that you’ll be saying that AARP went along with the ObamaCare charade because it would kill Medicare Advantage……leaving those folks to move to AARP for additional medical care coverage.

Oh…wait…it’s been put off for one year. Too close to the coming elections.

GarandFan on June 12, 2012 at 11:29 AM

I’m sure if and when the information becomes public, this will pale in comparison to what the health insurance industry contributed and received in return.

Slightly OT-didn’t this used to be illegal? Having non-government organizations write legislation? Wasn’t this the ethics charge against Newt that the ehtics committee ruled he violated, but didn’t punish him for because he stopped doing it?

talkingpoints on June 12, 2012 at 11:29 AM

This is what Snobama meant by the private sector doing fine.

Ufdaubet on June 12, 2012 at 11:29 AM

After reading this I need an aspirin,make that 2.

docflash on June 12, 2012 at 11:31 AM

I’m sure this is going to be the lead story on the nightly news, right?

bflat879 on June 12, 2012 at 11:33 AM

http://www.washingtonpost.com/wp-srv/politics/govt/leadership/stories/101198.htm

My mistake. Newt had been using a political consultant to develop the Republican agenda. It was considered a violation of Rule 45. I wonder if this might fall in the same area.

talkingpoints on June 12, 2012 at 11:38 AM

I’m sure this is going to be the lead story on the nightly news, right?

bflat879 on June 12, 2012 at 11:33 AM

They had to bump this story because they’re covering a Romney quid-pro-quo, where he once paid a kid $50 in return for mowing his lawn.

The Rogue Tomato on June 12, 2012 at 11:39 AM

Obama latest: “The economy was eaten by a dingo”

faraway on June 12, 2012 at 11:39 AM

softcore fascism.

rbj on June 12, 2012 at 11:41 AM

After reading this I need an aspirin,make that 2.

docflash on June 12, 2012 at 11:31 AM

Really, is it worth the expense to give you an aspirin? Are you over 35? If so, you need to register with the Department of Carrousel immediately. The Department of Carrousel will drastically reduce the burden you are on society and improve healthcare for all of us as a result. Do your duty and apply for Carrousel today.

NotCoach on June 12, 2012 at 11:43 AM

Hmm, it looks like I need to show this to my wife’s grandparents. They voted for Obama and already know that Obamacare is a sham as their medication costs have already skyrocketed over the last year.

MobileVideoEngineer on June 12, 2012 at 11:45 AM

…I can see Jay Carney answering questions on this…it’s either “Lobbyist…what’s a lobbyist?” …or…”I know 3 lobbyists…the lobby at the Hilton…the lobby at…”
.
.
…no wonder Nancy Pelosi never had a chance to read it!

KOOLAID2 on June 12, 2012 at 11:50 AM

Perhaps it’s a matter of degree as to how much industry can contribute. Apparently there were two instances where Newt had industry people playing a significant role which were felt to be in violation of Rule 45, a Gaylord and a Jones. But they seem to have had very substantial roles within Newt’s office and maybe this isn’t as extensive, so that’s why no ethics charges have been filed?
http://www.congressproject.org/ethics/jones3.html

talkingpoints on June 12, 2012 at 11:51 AM

You know, we get this kind of info over and over again and become outraged and pi$$ed off and what does it get us? Does anyone ever do anything about this behavior and…well, what can you do with a bunch of corrupt beaurocrats that were elected by the mostly stupid electorate. They get away with this because Obama is “cool” oh, scratch that, racist and all, I meant because Obama is such an awesome leader and only has our best interests at heart and blah blah blah until the next outrageous story comes out that we can’t do anything about.

Vicious circles. Frustrating me no end.

NJ Red on June 12, 2012 at 11:53 AM

Next we will be treated to taxpayer-funded promos on the wonders of ObamaCare…oh wait…Damned straight, we are NOT angry enough…YET! We are getting there, though.

indyvet on June 12, 2012 at 11:53 AM

What you call “crony capitalism” is the very definition of FASCISM.

lilium479 on June 12, 2012 at 11:54 AM

Why do I suspect that Oromney would have done the same?

Don L on June 12, 2012 at 11:55 AM

Oh boy. The best thing that could happen now for B. Hussein Obama is if the Supreme Court throws the whole thing out. I sure hope they just dump the mandate, so he has spend campaign capital and cash trying to defend the rest of it — that’ll be hilarious. Then we can repeal that piece of trash law once Romney is elected.

starboardhelm on June 12, 2012 at 11:56 AM

Obama latest: “The economy was eaten by a dingo”

faraway on June 12, 2012 at 11:39 AM

And the dingo was then eaten by…you guessed it….yum yum!

Don L on June 12, 2012 at 11:58 AM

The WSJ is correct: the Tea Party isn’t nearly angry enough over crony capitalism in the Obama administration, and especially in ObamaCare.

What about the Silence of the GOP, it’s like they’re in on it…

the_nile on June 12, 2012 at 12:02 PM

Why do I suspect that Oromney would have done the same?

Don L on June 12, 2012 at 11:55 AM

.
I dunno. Why?
.
Is there some overwhelming evidence that makes you think he might collude with Big Pharma to establish a Big Payday for government control of One Sixth of the US economy?
.
How about we stick to facts and not speculation. Does that suit you?

ExpressoBold on June 12, 2012 at 12:02 PM

Why isn’t stuff like this illegal?

The Rogue Tomato on June 12, 2012 at 11:29 AM

Probably because it’s bipartisan , like inside trading.

the_nile on June 12, 2012 at 12:02 PM

I dunno. Why?
.
Is there some overwhelming evidence that makes you think he might collude with Big Pharma to establish a Big Payday for government control of One Sixth of the US economy?
.
How about we stick to facts and not speculation. Does that suit you?

ExpressoBold on June 12, 2012 at 12:02 PM

It’s almost the same people behind obamacare as romneycare , lobbyist and rent seekers.

the_nile on June 12, 2012 at 12:04 PM

It’s almost the same people behind obamacare as romneycare , lobbyist and rent seekers.

the_nile on June 12, 2012 at 12:04 PM

.
Names? Why are you agreeing to smear the nominee without any facts being in evidence? We know Ø is deeply corrupt, the evidence is all around even if there has been no “trial.” What evidence is there that Romney has been this corrupt and craven?

ExpressoBold on June 12, 2012 at 12:10 PM

In other words, the drug companies paid $70 million in political advertising

While the cost of my Plavix increased from $200.00 to $225.00 per prescription?

Bunch of &%#$@& jackwagons.

Flora Duh on June 12, 2012 at 12:11 PM

Really, is it worth the expense to give you an aspirin? Are you over 35? If so, you need to register with the Department of Carrousel immediately. The Department of Carrousel will drastically reduce the burden you are on society and improve healthcare for all of us as a result. Do your duty and apply for Carrousel today.

NotCoach on June 12, 2012 at 11:43 AM

This would be funny if it weren’t so close to being real.
Logan’s Run, Soylent Green, et al.

Zooid on June 12, 2012 at 12:17 PM

mittens would have done the exact same thing . . ..

NOMITTNOBAMA 2012!

Pragmatic on June 12, 2012 at 12:20 PM

Why isn’t stuff like this illegal?

The Rogue Tomato on June 12, 2012 at 11:29 AM

Look who is writing the laws.

LoganSix on June 12, 2012 at 12:20 PM

the Department of Carrousel will drastically reduce the burden you are on society and improve healthcare for all of us as a result. Do your duty and apply for Carrousel today.

NotCoach on June 12, 2012 at 11:43 AM

This would be funny if it weren’t so close to being real.
Logan’s Run, Soylent Green, et al.

Zooid on June 12, 2012 at 12:17 PM

Hey!! I take offense!! This is nothing like that!

Okay. Maybe a little!

All right. Yes, it is turning out just the same.

*sigh*

LoganSix on June 12, 2012 at 12:22 PM

Like Ron Paul said, right Ed?

air_up_there on June 12, 2012 at 12:26 PM

Why do I suspect that Oromney would have done the same?
Don L on June 12, 2012 at 11:55 AM

Because you’re a dufus.

Akzed on June 12, 2012 at 12:49 PM

After reading this I need an aspirin,make that 2.

docflash on June 12, 2012 at 11:31 AM

Make sure it’s not Pfizer :)…

jimver on June 12, 2012 at 12:53 PM

rod blegoivich hardest hit

t8stlikchkn on June 12, 2012 at 12:58 PM

Tell me again, what is Mittness’ presumed COS’ profit vector in ObamneyCare?

AH_C on June 12, 2012 at 1:05 PM

While the cost of my Plavix increased from $200.00 to $225.00 per prescription?

Bunch of &%#$@& jackwagons.

Flora Duh on June 12, 2012 at 12:11 PM

I’ve been suspicious for years of my doctor’s (and former doctors I’ve had as well) tendency to suggest immediately! right away! a prescription for a cholesterol drug of some kind after my test results have come back and practically trips over his feet to get to his pad to write one out. I told him then that I was going to manage it via diet and exercise because everything I’ve heard about any class of statin drug is that the side effects do more harm than the supposed “benefits” of treatment. Also I’ve read recently some contradictory studies that cholesterol has nothing to do with the incidence of heart attacks and strokes, but inflammation of the blood vessels does.

Even long before Obamacare, it’s been very hard to believe that there isn’t some collusion between some doctors and the drug companies the way they are in such a hurry to prescribe a pill in what seems to me in a one-size-fits-all manner.

PatriotGal2257 on June 12, 2012 at 1:14 PM

Seriously Ed!?! The Tea Party will do NOTHING to call him out for this fascism. Want to know why? It’s that whole beam / mote thing man…

It sucks when we have to go to Think Progress to find the dirt on our team, but I’m sick of the people getting sold out on our side carrying their Gadsden flags thinking their “different”. Until we hold BOTH side accountable, you’re going to get this. It doesn’t matter whether it’s Pharma or Banking, fascism is finding home in both parties.

SkinnerVic on June 12, 2012 at 1:24 PM

They had to bump this story because they’re covering a Romney quid-pro-quo, where he once paid a kid $50 in return for mowing his lawn.

The Rogue Tomato on June 12, 2012 at 11:39 AM

I read about that. It was in 1973 and the kid said Romney was mean, threatened to give him a hair cut, and kicked his own dog (Seemus). Jeb Bush is really upset about it./;)

magicbeans on June 12, 2012 at 1:32 PM

Sadly, this isn’t a Democrat or Republican thing. It’s a how-Washington-works thing by both parties. And it doesn’t change because both parties benefit from it, and they are the ones writing the laws that govern it. Convenient, huh?

The real question is, how do we get Washington to write the laws to hold themselves accountable for this sort of corruption? If that ever gets fixed, SO many of our other problems in government will being to right themselves.

gravityman on June 12, 2012 at 1:43 PM

being = begin. screw auto-correct.

gravityman on June 12, 2012 at 1:44 PM

Why do I suspect that Oromney would have done the same?
Don L on June 12, 2012 at 11:55 AM

Because you’re a dufus.

Akzed on June 12, 2012 at 12:49 PM

You are right, of course. I stand in awe of the shear weight of your many rational and thoughtful points. Mr. Etch-a sketch is far too rigidly principled to ever do something like Obamacare.

Don L on June 12, 2012 at 1:47 PM

Crony capitalism in Obammycare?

No Sheite?

Next House Repunks will discover there’s “Death Panels” in there!

Oh the outrage, I bet Boehner will be so furious he will bawl!

ConcealedKerry on June 12, 2012 at 2:04 PM

Not only does the WSJ have an excellent editorial on the drug lobby’s collusion with OBOZO, but it also prints many of the damning e-mails that show the effort to massively profit from obozocare. Crony capitalism at its worst.

TeaPartyNation on June 12, 2012 at 2:09 PM

zero chance this gets reported on the MSM

burserker on June 12, 2012 at 3:22 PM

This is all perfectly fine with the MSM because it was done at the expense of the vile(and mostly white)bitter clingers in order to benefit the down trodden, illegals and people of color.

bluesdoc70 on June 12, 2012 at 3:44 PM

the Tea Party isn’t nearly angry enough over crony capitalism in the Obama administration

Doesn’t make any difference, the Tea Party wouldn’t be able to do anything about it. Obama has learned as a “Constitutional Scholar”, the Constitution isn’t worth the paper it’s written on and he’s certainly not going to live by it. Obama is going to do what he wants to do and there’s nothing we can do about it except vote him out of office in November. That’s the only card the Tea Party can play too.

TulsAmerican on June 12, 2012 at 3:54 PM

Here in St Louis, there are ads running during the local news telling everyone to use the benefits available to them due to Obamacare. I didn’t catch who sponsered the ads but I wouldn’t doubt they are being run here to help McCaskill.

Vince on June 12, 2012 at 3:58 PM

Mr. Tauzin’s “corporate clients and their shareholders may soon pay for his attempt to get cozy with ObamaCare.” …


Remember who Mr. Tauzin is?
Slime ball par excellence.

Mr. Tauzin was elected to the House in 1980 as a Democrat. But after the 1994 Republican takeover of Congress cost him a committee chairmanship, he complained that President Bill Clinton had failed to live up to a private deal to kill a certain energy tax from a bill Mr. Tauzin had voted for in a House-Senate conference.

Citing that betrayal and Mr. Clinton’s health care proposals, Mr. Tauzin switched parties. And in the process he bargained with Republican leaders to retain his seniority so that he soon became chairman of the new House Energy and Commerce Committee. That gave have him vast power over telecommunications, media, drugs and other industries.

Now, seven years later, Mr. Tauzin’s friends say, it is to his Texas ranch that Mr. Tauzin, 66, will retreat, to contemplate the apparent collapse of the grandest in a career of fearless deals — a pact to trade the drug industry’s political support for favorable terms under President Obama’s proposed health care overhaul.

Mr. Tauzin is leaving his $2 million-a-year job as the top lobbyist for the drug industry amid complaints from drug makers that he bargained away their profits too cheaply, spent too much in his $150 million advertising campaign to sell the overhaul and miscalculated in his assessment that the passage of the legislation was all but inevitable.

fred5678 on June 12, 2012 at 3:58 PM

It’s almost the same people behind obamacare as romneycare , lobbyist and rent seekers.

the_nile on June 12, 2012 at 12:04 PM

.
Names? Why are you agreeing to smear the nominee without any facts being in evidence? We know Ø is deeply corrupt, the evidence is all around even if there has been no “trial.” What evidence is there that Romney has been this corrupt and craven?

ExpressoBold on June 12, 2012 at 12:10 PM

Heh. These are the people who are going to hold Mitt’s feet to the fire if he wins. Fills me with confidence.

ddrintn on June 12, 2012 at 4:07 PM

^ You can start here, by the way: A piece that appeared at the parent site of what’s become MittRomneyCentral II.

“What motivated Romney to enact RomneyCare, as former Romney/Obama adviser Jonathan Gruber explains here,” writes Cato’s healthcare policy expert Michael Cannon, “was the widespread desire (within Massachusetts) to hang on to $385 million of federal Medicaid money that Massachusetts had secured using one of Medicaid’s notorious and fraudulent “provider tax” scams. In other words, the whole purpose of RomneyCare was to enable Massachusetts to hold on to $385 million that it received by defrauding and taxing residents of other states. And of course, Romney/RomneyCare caused the tax burden that Massachusetts effectively imposes on non-Massachusetts residents to grow.”

When Romneycare was crafted there were people sitting around a table talking about healthcare, but they weren’t talking about cancer, or broken bones. They were talking about money. You got it and they want more of it, risk free in the same way they off-loaded risk in the housing sector.

While other parts of the economy are struggling, the healthcare sector is approaching all-time highs as represented by the S&P healthcare Select Sector fund. Romneycare and Obamacare, as seen in the chart below, have created an artificial floor for healthcare investments, protecting investors in a way that investors in the S&P 500, for example, don’t enjoy.

ddrintn on June 12, 2012 at 4:15 PM

Fills me with confidence.

ddrintn on June 12, 2012 at 4:07 PM

.
You should have a little perspective with that confidence. To date, I have not seen much perspective other than denigration of the nominee becuase “your guy” didn’t win. You are picture definition of “sour grapes.” People hate to see you comment because you are so darn negative.

ExpressoBold on June 12, 2012 at 4:32 PM

You should have a little perspective with that confidence. To date, I have not seen much perspective other than denigration of the nominee becuase “your guy” didn’t win.

I’ve been anti-Mitt for 3 years. Nothing’s changed. I’m just not donning the Red Team cheerleading outfit, thus…

You are picture definition of “sour grapes.” People hate to see you comment because you are so darn negative.

ExpressoBold on June 12, 2012 at 4:32 PM

I couldn’t care less whether people “hate to see me comment” or not. If I had a need to be liked by the nouveau ‘bots here I’d just hop on that Mitt bandwagon.

You didn’t address anything in the article, and if Romney wins anything but ANYthing he does in the future will always be excused on the basis of “don’t help the Democrat commies” and “well Obama was always worse”. Hold Romney’s feet to the fire, my ass.

ddrintn on June 12, 2012 at 5:02 PM