Sunday, August 9, 2009

The Obvious Question

News today in the NY Times that the drug companies' industry group PhRMA is going to be running $150 million in pro-health care reform ads should be setting off huge alarms for everyone.

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.

With House Democrats moving to extract more than that just as the drug makers finalized their advertising plans, the industry lobbyists pressed the Obama administration for public reassurances that it had agreed to cap the industry’s additional costs at $80 billion. The White House, meanwhile, has struggled to mollify its most pivotal health industry ally without alienating Congressional Democrats who want to demand far more of the drug makers. White House officials could not immediately be reached for comment.

Many Democratic lawmakers have railed for years against what they consider the industry’s excessive profits and pointedly insisted in recent days that they do not feel bound by the White House’s commitments.

Sources briefed on the drug industry’s plans, speaking on condition of anonymity because the details remain confidential, say top officials of the industry’s trade group, the Pharmaceutical Research and Manufacturers of America, or PhRMA, are scheduled to meet next week to finalize its fall plans. The final budget could be less or more than what was authorized, the sources said.

By comparison, President Obama’s presidential campaign spent about $236 million on television commercials while the campaign of the Republican candidate, Senator John McCain of Arizona, spent about $126 million. Few expect the opponents of the health care overhaul to muster as much advertising muscle as its backers, including sympathetic business groups, labor unions and ideological allies. The drug makers stand to gain millions of new customers from the expansion of health care coverage.
It takes David Fitzpatrick's article a while to get to the catch, but there it is. Millions, if not tens of millions of new customers for drugs and the government subsidies to pay for them for decades. Of course the drug companies will be falling all over themselves for this. It's trillions in guaranteed new revenue streams for them, in addition to the millions of boomers reaching Medicare age over the next decade or so. Positioning themselves now, locking in laws to be the supplier, is a no-brainer.

Necessary evils abound. The drug companies stand to get theirs. Who's going to pay for it? Either way, it'll be the American taxpayer.

1 comment:

The Grand Panjandrum said...

This is why big Pharma has been silent on the issue until now. They will get richer. If this bill is set up the same way as the prescription drug benefit bill was, we are in for a good shagging. The government is specifically proscribed from bargaining for better pricing in that legislation thanks to Billy Tauzin.

I'm waiting to see if the healthcare bill has the same proscription. If it does then you will know the fix was in and it never was about containing costs.

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