Billy Tauzin, president of the Pharmaceutical Research and Manufacturers of America, has cut a secret deal on health reform with the White House. Tauzin told Tom Hamburger of the Los Angeles Times that in exchange for the much-touted $80 billion in savings that PhRMA volunteered in June to help cover the uninsured and reduce drug prices for some senior citizens, the White House had promised to block any congressional effort to allow the government to negotiate Medicare drug prices. Tauzin is from Louisiana, where tall tales grow like weeds, and at first his assertion seemed wildly implausible. But two days after the L.A. Times scoop, the New York Times got White House confirmation. "The president encouraged this approach," White House deputy chief of staff Jim Messina said in an e-mail. "He wanted to bring all parties to the table to discuss health insurance reform."
President Obama's handshake with Tauzin is easily the dumbest mistake he's made in shepherding health reform through Congress.
So who leaked the details of the deal?
The aforementioned: Billy Tauzin.
Why? After the jump...
Because the Blue Dogs did something right. They demanded and got negotiation for drug prices inserted into the House Energy and Commerce bill, which would save $156 billion compared to Obama's weak and sacrificial $80 billion. Obama seems to only be weakening the hand of Congress with deals like this. Even the $156 billion is only half of what we could save if we negotiated and managed prices the way the VA does:
In striking the bargain with PhRMA, Obama broke a not-insignificant campaign promise ("Obama will repeal the ban on direct negotiation with drug companies and use the resulting savings ... to further invest in improving health care coverage and quality"). Candidate Obama, citing a paper by Roger Hickey, Jeff Cruz, and Dean Baker of the Institute for America's Future, put the savings at $30 billion a year, which over a decade would be roughly twice the $156 billion savings envisioned by the energy and commerce committee. (Hickey, Cruz, and Baker proposed matching not Medicaid drug prices but those negotiated by the more straightforwardly socialist Veterans Administration.) By this reckoning, Tauzin swindled not $76 billion from President Obama but $220 billion. That's nearly half what the House health reform bill expects to raise with its proposed surtax on incomes above $350,000!
Go to :55 of this video from Jed Lewison's story to see what bargaining with phArm gets you.
He sells drugs. So sweet.