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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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February 16, 2010

Pharma and the Health Care Bill: Value For the Money?

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Posted by Derek

I hesitate to open up the whole topic of health care reform again. (For the record, I think that the bills, in their current forms, are dead). But one thing that struck me was how early the pharma industry trade group PhRMA got involved in the negotiations, and the sort of deal that they struck.

I note that Billy Tauzin, head of the organization at the time, seems to have been instrumental in those negotiations, and that he has now left his position. You can read this account of the whole affair, courtesy of the Sunlight Foundation, and decide to what extent those two statements are related. I also note that, if that article is accurate, at least $100 million dollars was spent by the trade group in the process.

I get emails from people at PhRMA once in a while. I'm expecting the next one by this afternoon. . .

Comments (9) + TrackBacks (0) | Category: Current Events | Regulatory Affairs


1. Erica on February 16, 2010 10:29 AM writes...

Hi Derek, Nice post and thanks for the link to the Sunlight Foundation. I'm always interested in how they break these issues down - and this one on Tauzin was a treat. I came to Washington in 2006 - at the end of the Industry's "Non-Interference" push to sustain the high cost and somewhat of a monopoly on Medicare Part D (NI is what they called it).

In general, I was always astonished that more people didn't know about the blatant ways in which special interests (pharmaceutical companies in this case) can work against the public interest. Let's hope this new wave of transparency in communications will really put the public first.

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2. Soon to be Pfired on February 16, 2010 11:46 AM writes...

Pfizer and PhRMA spent a combined 51 million dollars lobbying in Washington last year.

Not sure exactly what we got to show for that.

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3. David on February 16, 2010 11:56 AM writes...

PhRMA has decided to yet again turn its backs on the Democrats, figuring the Republicans are going to take back at least one and maybe both houses of Congress. '

The question no one has asked (and is the one to be answered) is what would happen if the pharmacuetical houses stopped the off-label promotions, hunkered down and did some real innovating about diseases for which there aren't really much effective treatment modalities. At that point, do you think much of the critiques of the pharmaceutical houses would be much toned down? I certainly do.

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4. Pharma Conduct Guy on February 16, 2010 12:04 PM writes...

Hi Derek,

I'm glad to see you bring up the topic of lobby spending.  The amount of data on lobby spending and campaign contributions made available through the Center for Responsive Politics is astounding.  Perhaps if more people would look at lobby spending they would also think more critically about the various issues being presented.

Regarding your statement that PhRMA spent "at least $100 million the process," I'm not sure how you arrived at that figure.  Recently, I wrote about this same issue, where I noted that according to the Center for Responsive Politics, PhRMA was the third largest spender on lobbying Congress in 2009 with $26 million (see A Bad Year for Pharma Scientists - A Good Year for Pharma Lobbyists).  Pfizer was #5 on the list.  However, the US Chamber of Commerce, who was #1, spent an astounding $147 million, which was almost as much as the combined amount ($145 million) spent by #2-7 on the list.

Source: The Legacy of Billy Tauzin: The White House-PhRMA Deal, Sunlight Foundation Blog, Feb 12, 2010.

"Aiding PhRMA in their outreach to Congress would be a squadron of lobbyists to push their health care reform priorities. Over the course of 2009, the drug industry trade group spent over $28 million on in house and hired lobbyists.  Aside from PhRMA’s massive in-house lobbying operation, the trade group hired 48 outside lobbying firms.  The total number of lobbyists working for PhRMA in 2009 reached 165...Of these dozens were former congressional staffers including two former chiefs of staff to Max Baucus."

Note that Billy Tauzin is scheduled to speak at Georgetown University's Medical School tomorrow (Feb 17, 2010 Symposium at Georgetown).  This should be interesting.

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5. Pharma Conduct Guy on February 16, 2010 12:24 PM writes...

3. David on February 16, 2010 11:56 AM writes...What would happen if the pharmacuetical houses stopped the off-label promotions, hunkered down and did some real innovating about diseases for which there aren't really much effective treatment modalities?...

Very well said David!

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6. Curt F. on February 16, 2010 12:46 PM writes...

1. I agree that in many cases special interests dominate negotiations over legislation that will affect them. What I wonder about is why it is always assumed that the special interests are in direct opposition to some universally agreed upon "public interest". I bet I could find some one out there who sincerely believes that drug reimportation is not in the public interest. Why is that guy wrong; why is it always the parochial special interests vs. the greater good?

2. A separate issue is how much it cost PhRMA to do all this lobbying. Why was it so much? $100 million? What did they buy? That figure seems a bit ridiculous.

In short, I'm surprised by the price tag for PhRMA to negotiate, but I'm unsure if all PhRMA wanted as against the public interest. It's lamentable that transparency is nil and that back room deals are the way legislation gets hammered out, but I bet that once in a while the little guy is (perhaps inadvertently) helped by these "special interests".

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7. Anonymous on February 16, 2010 1:05 PM writes...

Hippocrates, Dioscorides and Galen had this all figured out centuries B.C. As per a nearby blog entry, a Haiku can summarize it:

Have Healthcare headaches?
Congress is not the Answer.
Chew on willow bark.

You could even tweet that one. Going through clinical trials and the patent process however...

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8. FarmaFan on February 16, 2010 11:50 PM writes...

Public Interest... what they are really dealing with is IP. Property. Direct government "negotiation," "re-importation," and any other strong arm tactic is nothing more than stealing someone's property. The term for that is theft (not promoting the "public interest"). People and organizations that promote it are thieves, though they sometimes go by other names...politicians, activists, ... Screw with someone's property and they will fight back. It was the Obama team that sought out Pharma.

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9. JourneyHome on February 17, 2010 12:44 PM writes...

The golden rule - the guy with the gold makes the rules - is what governs this Country - everything else and I mean everything is window dressing. Stop wasting time arguing among yourselves and focus on solutions - everyone - everyone agrees health care is crippling the overall economy bleeding the middle class and making business less competitive - here's a solution to HELP those of us not in politics and who could give a hoot over which side scores political points - vote your pocket books!

“Use Senate reconciliation and expand Medicare via the Senate’s buy-in provisions. The CBO has already signed off on this as a means of saving money.

More importantly, if more Americans can do a buy-in with Medicare, it creates more cost control (because there’s a genuine “public option” competitor).

It also helps to solve the problems of pre-existing conditions, because Medicare does not deny coverage on this basis.

Allowing a Medicare buy-in to Americans under 65 would give people a genuine alternative to private insurance and thereby render the pre-existing question moot.

It would also lower Medicare costs by expanding the risk pool of patients (the great bulk of medical expenses are accounted for by a small number of people, mostly the elderly, requiring very expensive treatment).

And it would substantially enhance the global competitiveness of American corporations. After all, in what other country in the world is health care a marginal cost of production for business?” - Roosevelt Institute Marshall Auerback

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