[Ip-health] Opinion: Obama, the drugmakers, p rofit and ‘reform’

[Sarah Rimmington]

http://www.sfexaminer.com/opinion/columns/Timothy_Carney/Obama-the-drugmake=
rs-profit-and-reform-51536012.html
Opinion
Obama, the drugmakers, profit and ‘reform’
By: Timothy P. Carney
Examiner Columnist
July 24, 2009


President Barack Obama, in his Wednesday night news conference, declared
that “even the pharmaceutical industry” supports Democrats’ health care
legislation. That’s a bit like stating that “even Wall Street” supported
the bailouts.

Drugmakers, the most prolific lobbyists in Washington, D.C., and among
Obama’s top donors, stand to benefit from many proposals in Democrats’
health care “reform” bills. But Obama still alternates between tough
anti-business rhetoric and “hope-change” talk about bringing together an
unlikely coalition.

The homepage of WhiteHouse.gov warned Tuesday, “For those who fight
reform in order to profit financially or politically from the status
quo, the president sends a simple message: ‘Not this time.’”

But what about those who lobby in favor of “reform” in order to profit
financially from new subsidies, mandates and regulations? Seemingly, the
president says, “You’re in luck!”

The pharmaceutical industry, which gave $3.58 to Obama for every $1 to
Sen. John McCain in last year’s presidential race, according to the
Center for Responsive Politics, has spent more on lobbying in the Obama
era — $78 million so far this year — than any other industry.

Pharmaceutical Research and Manufacturers of America (PhRMA) spent $13.1
million in this year’s first two quarters, more than any other industry
group. PhRMA has also set up front groups and lobbying coalitions with
reformlike names such as “We Work for Health” and “Partnership to Fight
Chronic Disease.”

Has this gained them access to the Obama White House? Yes. What have
they done with that access? It’s hard to tell, because on this score
Obama is continuing former Vice President Dick Cheney’s policies on
transparency.

Pharmaceutical lobbyists and executives, including PhRMA’s CEO and
former Louisiana Republican Rep. Billy Tauzin, have enjoyed sit-down
strategy sessions in Obama’s White House.

A couple of weeks back, Democrat-run ethics watchdog Citizens for
Responsibility and Ethics in Washington filed a Freedom of Information
Act request for records of those meetings. The administration said it
would not release the records, only a summary of some visitor-log
information.

So we don’t know who met with whom and what they asked for, but we can
see some clear benefits for PhRMA in “reform” proposals.

All of the bills subsidize health insurance and expand Medicaid — in
effect funneling money from taxpayers to drugmakers. As Tauzin put it in
March, encouraging CNBC viewers to invest in his industry, “That means
to patients who can’t take our medicines because they can’t afford it —
$650 billion spent to better insure Americans for the products we make.
That ought to be a very optimistic and positive message for everyone who
is interested in our sector of the economy.”

Also, the Senate bill creates 12 years of government-protected
exclusivity for certain complex drugs called “biologic drugs.” So
generic drugmakers basically can’t compete in this corner of the
industry — hardly a cost-saving measure. The White House has called for
a briefer exclusivity period, but is the president willing to knock the
“stars” out of “alignment” by challenging these big-time donors and
lobbyists?

The supposed sacrifice the drugmakers have made — offering a discount on
brand-name meds sold to seniors lacking drug coverage because they’re in
the “doughnut hole,” between the ceiling on standard drug coverage and
the floor for catastrophic coverage — might really be a profit-making move.

Basically, the government is endorsing price-discrimination whereby
drugmakers charge more to people who get drug subsidies and less to
people who don’t. Because making addition pills costs almost nothing,
drugmakers still profit big on each pill, and they will sell many more
pills.

Obama took $1.1 million in pharmaceutical cash in the 2008 election
compared to McCain’s $309,000. Industry giant Pfizer supplied $121,000
of Obama’s cash and only $28,000 of McCain’s. That’s more than a 4-to-1
advantage.

Pfizer’s CEO, Jeff Kindler, after supporting Hillary Clinton in the
primary, gave Obama the maximum allowable contribution in the general
election. Amgen CEO Kevin Sharer also maxed out to Obama in the general.

Just because “reform” will profit drugmakers, of course, doesn’t make
it’s bad. But these drug profits will carry a cost for the rest of us.

We’ll all pay higher taxes to subsidize new Medicaid clients. And the
taxes aren’t just on “the rich” — the House bill would tax any
individual who doesn’t have insurance that meets federal standards.

So, when Obama charges opponents of “reform” with seeking profits, he’s
got something right: We don’t like government reducing our take-home pay
and giving it to Big PhRMA.

Timothy P. Carney is The Washington Examiner’s lobbying editor.

--
Sarah Rimmington
Attorney
Essential Action, Access to Medicines Project
Washington, DC
Tel: +1 (202) 387-8030
Cell: +1 (202) 422-2687
www.essentialaction.org/access/