Friday, September 18, 2009

Failing the Smell Test

Matt Taibbi recaps:

PhRMA, the lobbying arm of the pharmaceutical industry, earlier this year announced that it would be setting aside $150 million to pay for an ad campaign supporting the President’s health care bill. The deal was apparently struck in July, after former Louisiana congressman and current PhRMA chief Billy Tauzin (Rod Blagojevich’s underdog opponent in the upcoming semifinal match of the Corrupt Scumbag of the Century So Far tournament) met with Rahm and other Obama aides in the Roosevelt Room of the White House. Also in attendance were representatives of the usual panoply of awful medical corporations, including Abbott laboratories, Merck, and Pfizer. It was in this meeting that the White House agreed to sell out health care reform in exchange for a few bucks to fund the next couple of election cycles.

Tauzin, who has never been one for subtlety or finesse (he took his $2 million-a-year PhRMA job about ten seconds after he finished pushing through the Prescription Drug Benefit bill), stupidly later revealed some of the contents of that shady meeting, saying that the White House had “blessed” a plan involving the $150 million. He disclosed to reporters that he had extracted a promise from the White House to drop two important reforms: one, to allow the government to negotiate bulk rates for drugs in Medicare, and the other to permit the importation of cheap drugs from Canada (which was once an Obama campaign saw).

The only problem with this plan, from the White House’s side, was that not all of the president’s fellow Democrats played along. Specifically, Energy and Commerce chair Henry Waxman put a provision in his health care bill that allowed the government to negotiate lower rates. If Waxman’s language were to be allowed to survive, it would queer the White House’s deal.

According to Ryan Grim's excellent reporting, it looks like the Administration found a Democrat willing to play along:

The bill unveiled by Senate Finance Committee Chairman Max Baucus has been blasted as a major giveaway to insurance companies. But the even bigger winners are the drug makers.

That's because the Baucus bill matches up, nearly to the letter, with the secret deal that he, the White House and Big Pharma struck over the summer -- a deal the various parties roundly denied had been struck when it went public.

1) The memo said that PhRMA would "[a]gree to increase of Medicaid rebate from 15.1 - 23.1%".

The finance bill, on page 56, increases the Medicaid rebates for patented drugs from 15.1 to 23.1 percent.

Check.

2) The memo said that the parties had agreed "to get FOBs done." FOBs refer to follow-on biologic drugs - vaccines and other drugs made from living cells that are the fastest growing field of pharmaceutical research.

PhRMA wants extended patent protections from generic biologic drug makers. A finance committee aide said that the Baucus bill doesn't address biologics, leaving that to the Senate health committee's bill. The health committee bill gives drug makers 12 years of market exclusivity -- five more than the White House proposed -- and allows a 12-year extension with a minor tweak to the drug. The protection is worth billions to drug makers and is entirely unnecessary to encourage research, according to the Federal Trade Commission, which recommended zero years of market exclusivity.

"Already biologics take up at least 30% of Medicare part B spending and this proposal has been rolled into the overall health care reform bill, which is meant create cost savings, which it will not do," Jane Andrews, a medical student at the Johns Hopkins University and a member of Universities Allied for Essential Medicines, wrote in an e-mail to HuffPost. "It's simply a giveaway to BIO/PhRMA from Congress supported by the American Association of Universities."

Check (more or less.)

3) PhRMA agreed to "Sell drugs to patients in the donut hole at 50% discount." This one's not in dispute: All parties had previously announced that this was part of the deal. There it is on page 124.

Check.

4) "Companies will be assessed a tax or fee that will score at $12 billion. There was no agreement as to how or on what this tax/fee will be based."

Here the memo is off.

The $12 billion, stretched over 10 years, would have amounted to a tax of $1.2 billion per year. Instead, the Baucus bill hits Big Pharma with nearly double that -- a $2.3 billion annual fee, according to page 216 of the bill -- but they still did much better than industry counterparts who didn't reach a deal with the White House. Health insurers got hit with $6 billion in annual fees in the bill, and medical device makers got dinged for $4 billion a year.

The memo also listed four things the committee and the White House agreed to keep out of the bill.

1) Drug makers wanted Baucus and the White House to block Democratic efforts to allow cheaper drugs to be shipped in from Canada. There's nothing in the finance bill that allows that.

Check.

2) Some Democrats wanted PhRMA to give the federal government rebates for what it considered past excess charges; the memo says the White House agreed to oppose those rebates, and the bill doesn't include any.

Check.

3) As agreed, the bill does not overturn a GOP law -- pushed originally by chief pharmaceutical lobbyist Billy Tauzin, when he was in Congress -- that bans the government from negotiating for cheaper prescription drug prices.

Check.

4) Democrats wanted to shift some drugs from Medicare Part B to Part D, a move PhRMA opposed because it would reduce reimbursement rates. The administration agreed not to include that provision, according to the memo, and it's not in the Baucus bill.

Check.


2) The memo said that the parties had agreed "to get FOBs done." FOBs refer to follow-on biologic drugs - vaccines and other drugs made from living cells that are the fastest growing field of pharmaceutical research.

PhRMA wants extended patent protections from generic biologic drug makers. A finance committee aide said that the Baucus bill doesn't address biologics, leaving that to the Senate health committee's bill. The health committee bill gives drug makers 12 years of market exclusivity -- five more than the White House proposed -- and allows a 12-year extension with a minor tweak to the drug. The protection is worth billions to drug makers and is entirely unnecessary to encourage research, according to the Federal Trade Commission, which recommended zero years of market exclusivity.

"Already biologics take up at least 30% of Medicare part B spending and this proposal has been rolled into the overall health care reform bill, which is meant create cost savings, which it will not do," Jane Andrews, a medical student at the Johns Hopkins University and a member of Universities Allied for Essential Medicines, wrote in an e-mail to HuffPost. "It's simply a giveaway to BIO/PhRMA from Congress supported by the American Association of Universities."

Check (more or less.)

3) PhRMA agreed to "Sell drugs to patients in the donut hole at 50% discount." This one's not in dispute: All parties had previously announced that this was part of the deal. There it is on page 124.

Check.

4) "Companies will be assessed a tax or fee that will score at $12 billion. There was no agreement as to how or on what this tax/fee will be based."

Here the memo is off.

The $12 billion, stretched over 10 years, would have amounted to a tax of $1.2 billion per year. Instead, the Baucus bill hits Big Pharma with nearly double that -- a $2.3 billion annual fee, according to page 216 of the bill -- but they still did much better than industry counterparts who didn't reach a deal with the White House. Health insurers got hit with $6 billion in annual fees in the bill, and medical device makers got dinged for $4 billion a year.

The memo also listed four things the committee and the White House agreed to keep out of the bill.

1) Drug makers wanted Baucus and the White House to block Democratic efforts to allow cheaper drugs to be shipped in from Canada. There's nothing in the finance bill that allows that.

Check.

2) Some Democrats wanted PhRMA to give the federal government rebates for what it considered past excess charges; the memo says the White House agreed to oppose those rebates, and the bill doesn't include any.

Check.

3) As agreed, the bill does not overturn a GOP law -- pushed originally by chief pharmaceutical lobbyist Billy Tauzin, when he was in Congress -- that bans the government from negotiating for cheaper prescription drug prices.

Check.

4) Democrats wanted to shift some drugs from Medicare Part B to Part D, a move PhRMA opposed because it would reduce reimbursement rates. The administration agreed not to include that provision, according to the memo, and it's not in the Baucus bill.

Check.

Read more at: http://www.huffingtonpost.com/2009/09/18/baucus-bill-sticks-to-pha_n_290639.html
Obviously neither party has admitted to anything, but this sure doesn't look good.

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