Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

August 9, 2009


ABC News - In June, the Senate Finance Committee and the White House jubilantly announced that they'd come to a deal with the pharmaceutical industry. But as details of that deal have come out, the White House has issued mixed and conflicting messages as to what they knew and what they'd signed off on.

At the time, Sen. Max Baucus, D-Mont., chair of the Senate Finance Committee, announced that pharmaceutical companies had agreed to a deal as part of an overall health care reform package, where the companies will provide, as Baucus put it, "affordable prices on prescription drugs when Medicare benefits don't cover the cost of prescriptions," as well as kicking in some money for health care reform efforts.

President Obama said in a paper statement that "the agreement reached today to lower prescription drug costs for seniors will be an important part of the legislation I expect to sign into law in December. This is a tangible example of the type of reform that will lower costs while assuring quality health care for every American."

But on Thursday the New York Times' David Kirkpatrick reported that under pressure from pharmaceutical industry lobbyists, the White House "assured drug makers that the administration stood by a behind-the-scenes deal to block any Congressional effort to extract cost savings from them beyond an agreed-upon $80 billion."

On the campaign trail, then-Sen. Obama had supported measures to allow the government to re-negotiate drug costs, but apparently this deal would preclude such a move.

Former House Energy and Commerce chairman Bill Tauzin, R-La., now the head of Pharmaceutical Research and Manufacturers of America, or PhRMA, told the Times, "We were assured: 'We need somebody to come in first. If you come in first, you will have a rock-solid deal.' 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.”

"They wanted a big player to come in and set the bar for everybody else," Tauzin told the Times, asserting that in terms of contributions from the pharmaceutical industry, "$80 billion is the max, no more or less. Adding other stuff changes the deal."

Tauzin said that after the deal was reached with Baucus, he confirmed the terms of the deal with White House Chief if Staff Rahm Emanuel, deputy Chief of Staff Jim Messina, and health care reform czar Nancy-Ann DeParle.

"They blessed the deal," Tauzin told the Times. "As far we are concerned, that is a done deal. It's up to the White House and Senator Baucus to follow through.". . .

After the Times story appeared, some Democrats on the Hill expressed disappointment that the White House and Senate Finance Committee had made this deal with the lobbying group without consulting them, eliminating a way to help pay for the health care reform legislation.


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