A major row has broken out over drugmakers’ claims that they received assurances from the White House that any Congressional attempts to obtain cost savings from them beyond the $80 billion package agreed in June would be blocked.
“Under pressure” from industry lobbyists, the White House assured the manufacturers that the Obama administration “stood by a behind-the-scenes deal” to halt any legislative moves to increase the industry’s contribution to health care cost savings, the New York Times (NYT) reported last week.
However, in his election campaign, President Barack Obama had been supportive of moves to increase drug cost savings such as empowering the federal government to negotiate prices for the Medicare Part D prescription drug programme, and legislation to enable the government to do so is included in the House Tri-Committee health reform bill, which was approved at the end of July.
On June 20, the Pharmaceutical Research and Manufacturers of America (PhRMA) and Democratic Senator Max Baucus, chairman of the Senate Finance Committee, announced that they had agreed that drugmakers would spend $80 billion over 10 years to cover as much as 50% of the cost of brand-name medicines for elderly and disabled Americans once they reach the “doughnut hole” gap in Part D coverage.
The agreement was welcomed by Pres Obama as a “turning point in America’s journey towards health care reform” which “will be an important part of the legislation I expect to sign into law in October.”
And last week, PhRMA chief executive Billy Tauzin told the NYT that the industry group had been told: “If you come in first, you will have a rock-solid deal.” He added: “$80 billion is the max, no more or less. Adding other stuff changes the deal.”
Mr Tauzin also said that he had been assured by the White House that any attempts to introduce not only government drug price negotiating powers for the Medicare programme but also allowing consumers to re-import US-approved prescription drugs from Canada and elsewhere would be blocked, and that the agreement had been “blessed” by White House Chief of Staff Rahm Emanuel, Deputy Chief of Staff Jim Messina and Nancy-Ann DeParle, director of the White House Office of Health Reform.
Congressional Democrats who are working on legislation to increase drug cost savings with just such initiatives responded with fury to the reports of such a deal, saying that it would make their position “untenable.” Long-time industry critic Representative Henry Waxman, who chairs the House Energy and Commerce Committee, has already pointed out that the deal struck between the industry and the Senate Committee has nothing to do with the House.
The row comes ahead of meetings this week in which PhRMA is due to finalise its plans to support the health reform programme with television advertisements costing around $150 million – an Associated Press report has suggested that the figure could be as much as $200 million – amounts which have astounded observers.
