by Admin | August 27, 2009 5:52 pm
August 27, 2009 – Just as PhRMA thought it might be done making concessions toward health care reform, the drug industry finds itself on shaky ground with the White House while at the same time fielding live grenades from the Republican leadership.
PhRMA President and Chief Executive Billy Tauzin complained in early August that the White House appeared to be backing away from its agreement with drug makers to limit industry losses under reform to $80 billion over 10 years (see Monitor Aug. 2009).
Tauzin was concerned that the Obama administration was embracing amendments to the Energy and Commerce Committee version of the reform legislation that would permit direct government negotiation of drug prices under Medicare Part D. Today, the Part D program prohibits government interference in negotiations between drug manufacturers, Part D plans, and pharmacies.
Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) had also added language to the health reform measure that would require manufacturers to pay rebates on drugs dispensed to Part D enrollees who are also eligible for Medicaid, so-called “dual eligibles.” In addition, drug makers would have to pay rebates on drugs dispensed under Medicaid managed care.
Manufacturers have not had to pay rebates on drugs dispensed to Medicaid enrollees since the beginning of the Part D program in January 2006. Rebates have never been collected for drugs dispensed under Medicaid managed care.
Collecting rebates on dual eligibles would save the government an estimated $63 billion over 10 years. The expansion of rebates to managed care would yield an additional $11 billion in savings over the same period.
The industry agreed to the $80 billion in health care reform concessions in June after holding discussions with the White House and Senate Finance Committee Chair Max Baucus (D-Mont.). But seeking additional contributions from the drug industry, lawmakers and the administration would undermine drug makers’ support for the Obama health care reform initiative, Tauzin warned.
White House Messages Unclear
The White House quickly and publicly assured Tauzin that it would not support legislation boosting PhRMA’s obligation beyond the $80-billion mark. Waxman, meanwhile, contented that the House of Representatives was never part of the industry discussions with the White House and therefore not locked into anything produced during those talks.
White House Deputy Chief of Staff Jim Messina told reporters in an Aug. 5 e-mail that the Obama Administration would stick to the original deal with PhRMA. However, by Aug. 7, after protests from Congressional Democrats, the White House appeared to be reversing field. White House officials then told media that Mr. Messina had not intended to say that the PhRMA deal ruled out government negotiations over Part D pricing.
Republicans Weigh In
The fracas continued when House Minority Leader John Boehner (R-Ohio) launched a salvo Aug. 17 from the other political party, publicly releasing a letter accusing Tauzin of seeking to appease a “bully.”
“At your behest, PhRMA has chosen to accommodate a Washington takeover of health care at the expense of the American people in hopes of securing favorable treatment and future profits,” Boehner fretted.
He also took Tauzin to task for spending $150 million on an advertising campaign in support of what Boehner called “ObamaCare,” a campaign Boehner claimed had been launched “with the assistance of well-funded political organizations on the Left.”
But PhRMA Vice President Ken Johnson said that his group would continue to create advertising support for health reform, with a new wave of ads in 12 states, along with several cable television commercials.
Turns out, Republicans were not finished with PhRMA. On Aug. 18, the Republican Party Web site GOP.gov reported that the PhRMA-financed advertising campaign would be spearheaded by the public relations firm founded by Obama key advisor David Axelrod. The GOP web site wondered how the firm had secured the $150 million advertising contract, an insinuation the administration brushed off by noting that the firm was no longer owned by Axelrod.
It remained unclear as August and the Congressional recess drew to a close whether PhRMA would see gains from its alliance with the White House. Nor was it clear whether those gains could affect 340B reform provisions contained in the national health care reform legislation.
Source URL: https://340binformed.org/2009/08/phrma-caught-between-barack-and-a-hard-place/
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