Barack Obama declared a big victory in his attempt to nationalize the health-care industry when he got the backing of the pharmaceutical industry, along with their pledge to reduce $80 billion in costs over the first decade of the plan. Now, however, the question of what the industry received in return has arisen now that the House version includes price negotiation on Medicare-funded prescription medications. The New York Times reported yesterday that the industry’s lobbyists have begun to cry foul as the administration apparently reneged on an agreement the White House wanted kept quiet:
Drug industry lobbyists reacted with alarm this week to a House health care overhaul measure that would allow the government to negotiate drug prices and demand additional rebates from drug manufacturers.
In response, the industry successfully demanded that the White House explicitly acknowledge for the first time that it had committed to protect drug makers from bearing further costs in the overhaul. The Obama administration had never spelled out the details of the agreement.
“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.”
A deputy White House chief of staff, Jim Messina, confirmed Mr. Tauzin’s account of the deal in an e-mail message on Wednesday night.
The Times gives an understated analysis, saying that the exposure of this agreement “could prove embarrassing” to Obama and his administration. Given the number of times his allies in Congress have gone out of their way to demonize the pharmaceutical industry, “embarrassment” is a safe bet — and the least of their worries. The agreement will likely touch off anger among the liberal wing of the Democratic Party in the House, already agitating over the attempts by Henry Waxman to appease the Blue Dogs before the recess.
Another embarrassing part of this story is the dishonesty at the White House over the agreement. As Tommy Christopher reports for Mediaite, Robert Gibbs has disavowed any knowledge of such an agreement with Tauzin and the pharmaceuticals. Tommy asked Gibbs about it directly at a June press briefing:
Q Thank you, Robert. I have two quick ones on health care. The first one, in the speeches about the $80 billion deal with the pharmaceutical companies, I haven’t heard anything a bout negotiating price — Medicare negotiating price with the pharmaceutical industry. I wanted to know if that was one of the tradeoffs for getting this $80 billion was that we’re not going to pursue that now.
MR. GIBBS: Well, look, again, the structure of part of that agreement was to use a portion of that $80 billion to pay up to — for the pharmaceutical industry to pay up to 50 percent of the cost for a name brand drug for a senior that falls between the point at which Medicare Part D stops providing help, and when catastrophic coverage — I think it is $6,500, a little bit more than $6,500 — level kicks in. So filling in that — what’s commonly known as — ironically, in health care — the doughnut hole, about — that up to 50 percent of the name brand — the price for that name brand drug would be paid for, and I think that provides a hefty discount that will bear appreciable benefits for seniors all over the country.
Q Has there been an agreement not to pursue a Medicare –
MR. GIBBS: I don’t know the answer.
Q I’m talking about S. 330.
MR. GIBBS: What was that?
Q Senate bill 330?
MR. GIBBS: You’re 330 bills ahead of me on that. (Laughter.) I will check on it.
Tommy says that only two options can be true. Either Gibbs knew about the agreement and lied to reporters, or the White House lied to Gibbs about it. Either way, Gibbs should resign.
But hey — who actually needs to read the bills, right?
Update: The briefing was from June, not yesterday; I misread Tommy’s post, but the point still stands.
Update II: Jake Tapper tries following up on it, but Gibbs denies knowing anything about a deal to hold off on Medicare pricing.