The Obama Sell-Out?

It appears that, in an effort to get health care - any health care - to pass that Obama has had to renege on a campaign promise ("Obama will repeal the ban on direct negotiation with drug companies and use the resulting savings … to further invest in improving health care coverage and quality"). It appears that the White House has cut a deal with PhRMA, the lobbying group for the phramaceutical companies, that promises to cap drug cost cuts at $80 billion.

In exchange the drug industry has authorized its lobbyists to spend as much as $150 million on television commercials supporting President Obama’s health care overhaul.

A corrupt bargain or a necessary evil to get health care passed? It depends on whom you ask.
Slate points out that it appears that PhRMA's chief lobbyist, former Rep. Billy Tauzin, has swindled the administration:

In striking the bargain with PhRMA, Obama broke a not-insignificant campaign promise ("Obama will repeal the ban on direct negotiation with drug companies and use the resulting savings … to further invest in improving health care coverage and quality"). Candidate Obama, citing a paper by Roger Hickey, Jeff Cruz, and Dean Baker of the Institute for America's Future, put the savings at $30 billion a year, which over a decade would be roughly twice the $156 billion savings envisioned by the energy and commerce committee. (Hickey, Cruz, and Baker proposed matching not Medicaid drug prices but those negotiated by the more straightforwardly socialist Veterans Administration.) By this reckoning, Tauzin swindled not $76 billion from President Obama but $220 billion. That's nearly half what the House health reform bill expects to raise with its proposed surtax on incomes above $350,000!

Tommy Christopher points out that the discounts are only in the "donut hole" gap, with 100% cost on everything else:

Baucus’ announcement said drug companies would pay half of the cost of brand-name drugs for seniors in the so-called doughnut hole — a gap in coverage that is a feature of many of the plans providing prescription coverage under Medicare.

So, they’re not actually ponying up anything but a pile of BOGO coupons, and even then, it’s only for the “donut hole.” Everything before and after that $3454.00 gap is paid for at full price by the patient and the American taxpayer.

Big Pharma is essentially giving up a 10% discount, in the donut hole only, in order to reap their 100% windfall when the taxpayer is on the hook.
Oh, and that $8 billion a year in “discounts?” Weigh that against the more than $4 billion they spend each year on those direct-to-consumer ads telling you to “ask your doctor” about things your doctor would already have told you about if you needed them.

Former Labor Secretary Robert Reich takes issue with the general idea of legislative deals:

I don't want to be puritanical about all this. Politics is a rough game in which means and ends often get mixed and melded. Perhaps the White House deal with Big Pharma is a necessary step to get anything resembling universal health insurance. But if that's the case, our democracy is in terrible shape. How soon until big industries and their Washington lobbyists have become so politically powerful that secret White House-industry deals like this are prerequisites to any important legislation? When will it become standard practice that such deals come with hundreds of millions of dollars of industry-sponsored TV advertising designed to persuade the public that the legislation is in the public's interest? (Any Democrats and progressives who might be reading this should ask themselves how they'll feel when a Republican White House cuts such deals to advance its own legislative priorities.)

And candidate Obama promised something very different, complete with video clips:

But here's the thing. We're going to do all these negotiations on C-SPAN.
The American people will be able to watch these negotiations so if they start seeing a member of Congress who is carrying the water for the drug companies instead of for their constituents and says, 'Oh, you no. we can't negotiate for the cheapest available price on drugs because the drug companies need these profits to invest in research and development', I'll say, 'OK, let me bring my health care expert in here'. And on TV, we'll ask my health care expert, 'What do you think about what the drug companies are saying?'

Transparency. You will hold me accountable, you will hold Congress accountable.

Me? I don't like it. I hate it in fact. But if anyone thought that concessions wouldn't be made to get this past, then they were naive or stupid.

This deal only says that drug prices won't be negotiated by legislative mandate in THIS bill. It doesn't say Congress can't come back to it later. Now, I realize that it's pollyanna-ish to think that the bought-and-paid-for members of both parties will ever do this in my lifetime. To them, they can go go back to their corporate masters and say 'see, we delivered'.

What I'd like to see rammed down their throats in conjunction with this is Rep. Jerrold Nadler's (D-NY) Just Say No To Drug Ads bill. It would "amend the Internal Revenue Code of 1986 to deny any deduction for direct-to-consumer advertisements of prescription drugs". Meaning that drug companies could no longer deduct the $4 BILLION they spend annually on "ask your doctor" ads as a business expense.

You should not be going to a doctor saying, ‘I have restless leg syndrome’ — whatever the hell that is — or going to a doctor saying, ‘I have the mumps,’ ... You should not be diagnosed by some pitchman on TV who doesn’t know you whatsoever.

– Jerrold Nadler

But. Health care has to happen. It must.