The Right Prescription

Crony Contraception

Why the HHS is fighting so hard to enforce the anti-conscience mandate.

By 2.1.13

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The central issue of the public debate over the Obama administration’s contraception mandate, which of course requires all manner of religious and secular entities to fund sterilizations, contraceptives, and abortifacients, has been its brazen disregard of basic liberties guaranteed by the First Amendment. That the focus has been on this aspect of the mandate is hardly surprising. The cavalier manner with which HHS imposed it on Catholic hospitals, universities, and private businesses whose owners object on religious grounds is unprecedented.

And, if the string of legal setbacks suffered by the administration in the lawsuits filed by various plaintiffs pursuant to the HHS edict is any indication, the courts are also uneasy with the mandate: “In the cases involving business owners, judges have granted temporary injunctions to businesses in nine of 14 cases they've heard.” In December alone, 5 out of 6 rulings went against HHS in cases involving both non-profit and for-profit entities. Its only “win” was a predictable ruling by an Obama appointee to the Supreme Court.

Nonetheless, despite Justice Sotomayor’s refusal to enjoin enforcement of the mandate against Hobby Lobby, it is virtually certain that at least one of the many legal challenges to the HHS rule will reach the Supreme Court. And this suggests a question: Why would the Obama administration, having won the legislative struggle to get Obamacare passed and fought a brutal legal battle to prevent it from being overturned by the Supreme Court, risk another visit to that fickle tribunal by insisting on this egregious mandate?

An answer is suggested by the President’s recent nomination of William B. Schultz to head the legal team at Health & Human Services. Never heard of Mr. Schultz? He is an attorney and long-time lobbyist for the pharmaceutical industry. He has been acting general counsel for HHS since last year. What has this to do with the contraception mandate? Well, as Tim Carney of the Washington Examiner has pointed out, Schultz's biggest client was “Barr Laboratories, maker of the morning-after contraception pill known as Plan B.”

Contraception is big business, and the HHS mandate promises to turn it into a cash cow for companies like Barr Laboratories. How? Avik Roy explains: “Under the current system, drug companies have an incentive to compete on price.… Under the new mandate, this price incentive disappears.” Insurance policies that covered contraception prior to the mandate encouraged patients to forego pricey products by charging higher co-pays than for generic equivalents. The HHS mandate forbids such co-pays, so there is no incentive to choose “Brand X.”

Roy goes on as follows: “Drug companies will be able to market ‘branded’ contraceptives at premium prices, knowing that women are free to choose the most expensive, designer product because it will cost them the same as the cheapest generic.” In other words, the contraception mandate is a license to steal for Big Pharma. Does that explain why President Obama and his Commissar of HHS, Kathleen Sebelius, are willing to endure another round of legal battles? Yep. The fix was obviously in at least as far back as 2009.

This is why the Pharmaceutical Research and Manufacturers of America (PhRMA) backed “health reform” by bankrolling a Democrat-designed propaganda campaign. The Wall Street Journal reported last summer that PhRMA and other industry lobbying groups coordinated with the White House to produce a multi-million dollar advertising blitz to promote Obamacare. “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.”

Moreover, as Peter Schweizer has reported, “[A]mong President Obama’s biggest financial backers are precisely the Big Pharma companies who benefit from the mandate.” And they go well beyond William Schultz and Barr Laboratories. Schweizer elaborates as follows: “Sally Sussman, head of government affairs for Pfizer, is one of [Obama’s] biggest campaign bundlers … Pfizer sells numerous contraceptives that now must be covered by health-care plans. Obama’s financial ties to the pharmaceutical industry run deep.”

All of which suggests that the HHS contraception mandate is just another Chicago-style payback scheme designed to reward one of the President’s most reliable financial backers. And, unlike the feckless AMA, Big Pharma isn’t about to be fobbed off with empty promises. That’s why William B. Schultz has been nominated by Obama to be General Counsel at HHS. This promises to be a pivotal year in the legal war over the egregious anti-conscience mandate and Big Pharma has no intention of sitting on the sidelines as a spectator.

So, while the most important issues at stake here involve religious liberty, only one side of the public debate and legal battle really cares about that. For Obama, Sebelius, Schultz, and their myriad cronies, this is all about the Benjamins. They’re looking for a payday and will cheerfully trash the First Amendment to get it. Thus far they aren’t doing so well in court, but we’ve been here before. When the anti-conscience mandate finally arrives at the Supreme Court, we’ll find out which matters more, the Constitution or cash.

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About the Author

David Catron is a health care revenue cycle expert who has spent more than twenty years working for and consulting with hospitals and medical practices. He has an MBA from the University of Georgia and blogs at Health Care BS.