President Barack Obama, in his Wednesday night news conference, declared that “even the pharmaceutical industry” supports Democrats’ health care legislation. That’s a bit like stating that “even Wall Street” supported the bailouts.
Drugmakers, the most prolific lobbyists in Washington, D.C., and among Obama’s top donors, stand to benefit from many proposals in Democrats’ health care “reform” bills. But Obama still alternates between tough anti-business rhetoric and “hope-change” talk about bringing together an unlikely coalition.
The homepage of WhiteHouse.gov warned Tuesday, “For those who fight reform in order to profit financially or politically from the status quo, the president sends a simple message: ‘Not this time.’”
But what about those who lobby in favor of “reform” in order to profit financially from new subsidies, mandates and regulations? Seemingly, the president says, “You’re in luck!”
The pharmaceutical industry, which gave $3.58 to Obama for every $1 to Sen. John McCain in last year’s presidential race, according to the Center for Responsive Politics, has spent more on lobbying in the Obama era — $78 million so far this year — than any other industry.
Pharmaceutical Research and Manufacturers of America (PhRMA) spent $13.1 million in this year’s first two quarters, more than any other industry group. PhRMA has also set up front groups and lobbying coalitions with reformlike names such as “We Work for Health” and “Partnership to Fight Chronic Disease.”
Has this gained them access to the Obama White House? Yes. What have they done with that access? It’s hard to tell, because on this score Obama is continuing former Vice President Dick Cheney’s policies on transparency.
Pharmaceutical lobbyists and executives, including PhRMA’s CEO and former Louisiana Republican Rep. Billy Tauzin, have enjoyed sit-down strategy sessions in Obama’s White House.
A couple of weeks back, Democrat-run ethics watchdog Citizens for Responsibility and Ethics in Washington filed a Freedom of Information Act request for records of those meetings. The administration said it would not release the records, only a summary of some visitor-log information.
So we don’t know who met with whom and what they asked for, but we can see some clear benefits for PhRMA in “reform” proposals.
All of the bills subsidize health insurance and expand Medicaid — in effect funneling money from taxpayers to drugmakers. As Tauzin put it in March, encouraging CNBC viewers to invest in his industry, “That means to patients who can’t take our medicines because they can’t afford it — $650 billion spent to better insure Americans for the products we make. That ought to be a very optimistic and positive message for everyone who is interested in our sector of the economy.”
Also, the Senate bill creates 12 years of government-protected exclusivity for certain complex drugs called “biologic drugs.” So generic drugmakers basically can’t compete in this corner of the industry — hardly a cost-saving measure. The White House has called for a briefer exclusivity period, but is the president willing to knock the “stars” out of “alignment” by challenging these big-time donors and lobbyists?
The supposed sacrifice the drugmakers have made — offering a discount on brand-name meds sold to seniors lacking drug coverage because they’re in the “doughnut hole,” between the ceiling on standard drug coverage and the floor for catastrophic coverage — might really be a profit-making move.
Basically, the government is endorsing price-discrimination whereby drugmakers charge more to people who get drug subsidies and less to people who don’t. Because making addition pills costs almost nothing, drugmakers still profit big on each pill, and they will sell many more pills.
Obama took $1.1 million in pharmaceutical cash in the 2008 election compared to McCain’s $309,000. Industry giant Pfizer supplied $121,000 of Obama’s cash and only $28,000 of McCain’s. That’s more than a 4-to-1 advantage.
Pfizer’s CEO, Jeff Kindler, after supporting Hillary Clinton in the primary, gave Obama the maximum allowable contribution in the general election. Amgen CEO Kevin Sharer also maxed out to Obama in the general.
Just because “reform” will profit drugmakers, of course, doesn’t make it’s bad. But these drug profits will carry a cost for the rest of us.
We’ll all pay higher taxes to subsidize new Medicaid clients. And the taxes aren’t just on “the rich” — the House bill would tax any individual who doesn’t have insurance that meets federal standards.
So, when Obama charges opponents of “reform” with seeking profits, he’s got something right: We don’t like government reducing our take-home pay and giving it to Big PhRMA.
Timothy P. Carney is The Washington Examiner’s lobbying editor.
