Study in crony capitalism: ObamaCare and Big Pharma

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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