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Threats, deals got drug companies on board with Obama

GOP releases data on health care talks

- The Washington Times - Thursday, May 31, 2012

Top administration officials cut backroom deals with the nation's top drug companies to win support for President Obama's health care overhaul, threatening them with steeper taxes if they resisted and promising a better financial deal for the industry if they acquiesced, according to internal documents released Thursday by House Republicans.

In some of the key deals, Mr. Obama agreed to drop his long-standing support for letting Americans buy cheaper foreign prescription drugs — something the pharmaceutical industry vehemently opposed — and the drugmakers promised to mount a public campaign to sell the public on the health care legislation.

The drug industry financed the famous "Harry and Louise" commercials in the early 1990s that many credit with helping to turn public opinion against President Clinton's massive health care bill. In 2009, the industry revived the fictional married couple — this time with words of praise for Mr. Obama's bill.

The material released by House GOP members provides a rare insider look at the wheeling and dealing on Capitol Hill as Mr. Obama tried to shepherd his bill through Congress, in the face of near-unanimous GOP opposition.

The details emerged as House Republicans released emails it obtained during a yearlong investigation into the closed-door negotiations between the White House and lobbyists for drug companies. House Republicans said those negotiations violated the promises of transparency Mr. Obama made during his 2008 campaign.

"We really have now been able to build a case that there was a sequential, planned, organized strategy for the White House to trade policy for politics, if you will," said Rep. Michael C. Burgess, Texas Republican. "They were willing to give up on things they thought were sound principles."

The documents show that former White House Chief of Staff Jim Messina and health care reform point woman Nancy-Ann DeParle told drug company representatives in June 2009 that if they didn't cooperate on the initiative, Mr. Obama would demand a 15 percent rebate on Medicare drugs and push to remove the tax deduction for direct consumer advertising — items that could cost the industry $100 billion over the next decade.

The threats appeared to work, and the parties met the next month to hammer out a final deal. The drug companies agreed to pay higher Medicaid rebates and a new health care reform fee to raise $80 billion for the legislation, and promised to run positive television ads about it.

In exchange, the White House gave them direct input into the new policies and promised to let them continue to set their own drug prices.

Ms. DeParle threw in an extra prize to reward pharmaceutical companies for their cooperation, saying she and other officials decided to reverse the administration's position on drug importation, which Mr. Obama supported while running for president.

"I made [the] decision, based on how constructive you guys have been, to oppose importation on this bill," she wrote to Bryant Hall, chief lobbyist for the Pharmaceutical Research and Manufacturers of America (PhRMA).

Administration officials have denied that they negotiated directly with PhRMA, instead saying it was Senate Democrats who brokered the agreement.

But Republicans said their findings contradict the White House and confirm what the GOP has long contended: that the White House bypassed members of its own party to iron out specific details with the drug companies.

The White House didn't respond to requests for comment, but congressional Democrats defended the deal-making, saying it was no different from what had been done for major legislation under previous presidents.

"President Obama's efforts to enlist the support of private industry are exactly what presidents have always done to enact major legislation. His efforts are what Americans expect of their leaders," said Reps. Henry A. Waxman and Diana DeGette, top Democrats on the Energy and Commerce Committee, in a memo responding to the GOP's investigation, calling it "one-sided, misleading, and full of significant errors."

They said the $80 billion deal the White House struck was changed in the final legislation and that the deal-making worked for American consumers: "The drug provisions have lowered pharmaceutical costs by over $3 billion for millions of seniors and have saved taxpayers billions of dollars."

PhRMA said the industry's negotiations with the White House were a normal part of doing business.

"Before, during and since the health care reform debate, PhRMA engaged with Congress and the administration to advance these priorities," said PhRMA Senior Vice President Matthew Bennett. "We look forward to ongoing work with Congress and the administration on bipartisan policy solutions that improve patient health."

Republicans said the investigation punctured a hole in Mr. Obama's pledges of transparency during the 2008 campaign — including a vow to televise all of the health care negotiations so Americans could see who was lobbying for the drug companies and other big players in the debate.

"When you are supposedly acting in the public's behalf, when you have promised that this is going to be the central feature of your administration, you darned well better behave that way," Mr. Burgess said.

The findings come during a period of uncertainty for the Affordable Care Act, with the Supreme Court expected to rule on the law's constitutionality in late June. A poll released Thursday showed support for the law dropping by 5 percentage points in April since the justices heard constitutional arguments in late March.

Thirty-seven percent of respondents to the May Kaiser Family Foundation poll said they feel favorably toward the law, while 44 percent said they have unfavorable views of it.

That's a reversal from how Americans initially felt about the law in April 2010, when support outranked opposition by 6 percentage points. Kaiser has tracked public opinion about the law every month since Congress enacted it two years ago.

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