Now for a bit on the pharma industry and the current fight over health care legislation. Does the industry want a new system to come into force, or not?
Depends on what that new system is, of course. But the industry is naturally trying to make sure that it has a hand in whatever passes. And here we come to a meeting of political interests. The administration would also prefer not to have the drug industry actively working against it, since drug companies have a lot of money to use for such purposes. Therefore, as anyone who knows politics could have predicted, a deal has been struck.
Or has it? As everyone has heard by now, Billy Tauzin, head of the industry's largest association (PhRMA), said that an understanding had been reached with Max Baucus of the Senate Finance Committee, with the approval of the White House. The industry would agree to come up with 80 billion dollars of savings, and the administration would then consider them to have done their part. More specifically, there would be no more talk of price negotiations for Medicare-approved drugs, of drug reimportation, or rebates for drugs prescribed to joint Medicare/Medicaid patients. The industry would also agree to support the new health plan by running ads (and, no doubt, by lobbying behind the scenes). Come, let us reason together.
It doesn't surprise me at all that such a quid pro quo would be worked out in advance - that's exactly how politics gets done. But what amazed me was that Tauzin would go around telling people. Predictably, many of the other players are now complaining, and PhRMA is reduced to saying that it's "counterproductive" to keep on talking about it.
Tauzin and PhRMA are also taking flak from their right - the Wall Street Journal blasted the whole idea of a deal the other day, calling it short-sighted. Congress could, after all, change the terms any time they can round up the votes, which would be any time it's convenient to blame the drug companies for something. I find myself more in this camp. I understand that PhRMA can't afford to stay out of this process (in which case the carving knives would come out sooner rather than later), but I think it's a sad business all the same, trading the threat of price controls now for the threat of price controls a little later on. Here's more complaining from National Review.
But that brings us back to Tauzin. I will work under the assumption that he's not an idiot, although I'm willing to listen to evidence for either side on that one. But if he isn't, why did he go around boasting of this wonderful backroom deal? All it seems to have done is endanger whatever agreement was reached. If my not-an-idiot stipulation is justified, though, the only reason I can see for doing this is as a tactic to get something even better. Did PhRMA look at the polls and decide the time was right to help torpedo everything? (And yes, I know the Rasmussen polls lean right, but I think they're picking up something real). Is that the game here?
Well, I get e-mails from people at PhRMA once in a while, and I'll probably get another one after I put this post up. Something tells me that I'm not going to get to hear what's really going on, but that doesn't stop a person from wondering.