When the Clinton administration advanced its version of health care “reform,” the pharmaceutical industry was firmly in the crossfire. The hostility didn’t end with the Clinton administration. Even though drugmakers produced life-saving products, in 2000 Al Gore campaigned against them, lumping them with the tobacco industry.
This year the drug producers have attempted to buy the Obama administration’s friendship by supporting “reform.” Indeed, the industry is spending lavishly to back the administration’s nationalization program. Reports the New York Times:
The drug industry has authorized its lobbyists to spend as much as $150 million on television commercials supporting President Obama‘s health care overhaul, beginning over the August Congressional recess, people briefed on the plans said Saturday.
The unusually large scale of the industry’s commitment to the cause helps explain some of a contentious back-and-forth playing out in recent days between the odd-couple allies over a deal that the White House struck with the industry in June to secure its support. The terms of the deal were not fully disclosed. Both sides had announced that the drug industry would contribute $80 billion over 10 years to the cost of the health care overhaul without spelling out the details.
Unfortunately for the drugmakers, it appears that loyalty runs only one way. The industry’s new friends already are welshing on the deal, and the legislation has barely moved in Congress. Just a few days ago the president pledged his eternal fidelity to the arrangement with the pharmaceutical producers. The New York Times explains:
Pressed by industry lobbyists, White House officials on Wednesday 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.
Drug industry lobbyists reacted with alarm this week to a House health care overhaul measure that would allow the government to negotiate drug prices and demand additional rebates from drug manufacturers.
In response, the industry successfully demanded that the White House explicitly acknowledge for the first time that it had committed to protect drug makers from bearing further costs in the overhaul. The Obama administration had never spelled out the details of the agreement.
“We were assured: ‘We need somebody to come in first. If you come in first, you will have a rock-solid deal,’ ” Billy Tauzin, the former Republican House member from Louisiana who now leads the pharmaceutical trade group, said Wednesday. “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.”
But that was then. This is now. Congressional Democrats see the issue differently: drugmakers are just another interest group to be plucked. And the administration certainly doesn’ intend to stand against Nancy Pelosi and company. As the New York Times tell us:
Caught between a pivotal industry ally and the protests of Congressional Democrats, the Obama administration on Friday backed away from what drug industry lobbyists had said this week was a firm White House promise to exclude from a proposed health care overhaul the possibility of allowing the government to negotiate lower drug prices under Medicare.
That didn’t take long. The president didn’t even respect a “decent interval” before selling out the industry.
Given how the pharmaceutical industry has been demonized in the past, its new strategy may come as no surprise. But the drugmakers should have known–and certainly are learning today if they didn’t know–that you can’t sup with the Devil. They will be used and then tossed under the bus whenever it’s convenient for the administration. The industry then will find that it is stuck with a price control regime purchased partially by its own advertising dollars. And the rest of us will be stuck with poorer medical care with fewer options.