White House Drug Deal May be in Trouble

Kate Pickert:
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You’re right, this could be huge.
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You might have the opportunity to report what could be at the black heart of this health care price hyper-inflation paid solely by Americans amongst developed countries.
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Dutifully we ask ourselves the talking point “Where will the savings come from in Medicare? How could there be hundreds of billions of dollars of waste, fraud and abuse, and if there were, what’s stopping the government from ending those practices now?”
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But maybe –just maybe– we (meaning you and the rest of us) will now be able to ask the question “How could a deal be struck between the government and ostensibly competing drug companies to the tune of $80 billion, and if there was such a deal, what’s stopping the government from negotiating the rates that Canada or France or Japan pays for drugs, which would be potentially hundreds of billions of dollars less?”
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With this reporting, we’re getting close to what may be bankrupting the country, Kate Pickert. Thanks for keeping on top of it.

If this deal falls apart, it could dramatically change the public health care debate and bruise President Obama in the process.
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That’s what he gets for negotiating secret deals after promising transparency.

Thank you Kate, I wondered why you did not see this as the big story on your first post.

I realise that the politics is big with the Dems against Dems, but there is another story here.

How much savings will the Nelson bill bring? Will it close the donut hole completely? How will it help Medicare and senior citizens and help Health Reform?

If politics is the main thing, what was the reaction of the Republicans, Did they look good and benefit themselves by defending the PHARMA deal? Did they jump on the opportunity to save billions?

Cliff, I think Kerry said that a Whitehouse staffer was involved with the deal.

I also think that they did not know at the time that the deals made with the health industries would not score on the CBO.

If you get the chance you need to watch, you will not regret it. This happened at the end of the evening session.

Great catch, thanks for highlighting this.
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That Times article is a bit frustrating, though– I get it, it’s funny that Dems are fighting against each other, for some reason. But what are the policy implications? What about carotexas’s question– what are the implications for the bill’s cost?
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The Times article suggests that there’s something sinister about the government trying to save money on the amounts it spends on drugs (“alternate plan would extract an additional $86 billion more from the drug industry”… “would potentially cost the drug industry far more.”) But I don’t understand why that is so. If I understand correctly, Medicare Part D was structured in such a way as to guarantee unnecessarily high payments to drug companies, because the Bush administration thought that would earn their support for the GOP.

Caro…
Kerry may have tried to cover for Obama by “blaming the staff”, but anyone who has covered health care reform, especially anyone who paid attention to the deal itself, knows that Obama bears full responsibility.
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Obama held a huge press conference to announce the deal, yet kept most of the details secret. And when those details leaked, and objections were raised, Obama did nothing.
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Team Obama gave away the store in order to hold a press conference and make it appear that he could “bring people together” — and the press went along with it….until now.

caro —
the Nelson amendment is a stalking horse for Waxman’s approach to the drug companies. Waxman’s approach (which includes the “seniors pay half for brand name drugs” provision) does a number of things that Democrats have always objected to in the Bushco “drug benefit” program….
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1) shrinks, and eventually eliminates, the size of the donut hole itself.
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2) demands rebates from drug companies based on the difference paid by medicaid and medicare for “dual eligible” medicare recipients (some seniors are eligible for both medicaid and medicare. Drugs prices for such seniors were based on Medicare prices — Waxman is demanding a refund because he feels the government should have been paying lower Medicaid prices.)
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3) Allow Medicare to negotiate drug prices.

http://michaelfury.wordpress.com/2008/10/21/coke-or-pepsi/

Sorry, wrong “White House drug deal”.

The drug discounts the industry offered would have cost pharmaceutical companies some $80 billion over ten years
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uh, why are you assigned to this story? Anyone who has paid any attention to it knows that the “discount” accounts for only $25-$30 billion of the $80 billion in “savings for seniors” that will be achieved — it won’t save the federal government a penny.
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Indeed, because the deal will remove much of the incentive to switch to generics once the donut hole is reached, total costs to the federal government will actually increase because the “donut hole” will be bridged rapidly for most seniors, and the government will wind up paying 95% of the “non-negotiable” price for these brand name drugs.
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In addition, according to the CBO, the additional provisions that will result in the additional “$50-$55 billion in savngs” won’t provide anywhere near that, because most of it is contained in higher taxes/fees that, according to the CBO, will be passed on to the consumer in higher drug prices (and higher insurance premiums) — and with the government paying for so many drugs now (through medicare, medicaid, the VA, and health benefits for federal employees), the “savings” from these fees will be much lower.

Thank you plukasiak, I did not know how the Waxman bill would work.
Elmendorf told Nelson yesterday that he would have to score his bill as he thought there were some differences with the house bill.

Elmendorf told Nelson yesterday that he would have to score his bill as he thought there were some differences with the house bill.
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During the afternoon session, I heard Elmendorf say that in terms of an amendment that Nelson was thinking of supporting — one that simply raised money without offsetting expenses.
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That’s different from the amendment that the Florida Times says (http://www.floridatoday.com/article/20090921/BREAKINGNEWS/90921027/1006/news01/Sen.+Nelson+offers+14+amendments+to+health+care+bill) Nelson actually did offer, which follows more closely (but not exactly, IIRC) the Waxman proposal.

Dutifully we ask ourselves the talking point “Where will the savings come from in Medicare? How could there be hundreds of billions of dollars of waste, fraud and abuse, and if there were, what’s stopping the government from ending those practices now?”

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Amen!
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As the committee was wrapping up – and after some senators had left for the evening – things got heated over a deal the White House reached earlier this year with drug companies. The deal stipulated that pharmaceutical companies would cut name-brand drug prices by 50% for seniors stuck in the doughnut hole, a gap in prescription drug coverage for some Medicare beneficiaries. In exchange for the deep discounts, drug companies were told they would not see any more cuts for their industry.

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But, the fact that our government is “dealing” with drug companies at all is concerning. Deals which create situations whereby “no more cuts for the industry” will occur.
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Why is the Obama Administration cutting deals? Why are they persistently making “deals” to big business and we loose as a result.
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For example a recent “deal” with AIG, now looks like we shall never see a single dime of the 182 BILLION dollars given to this company. Rather than allowing the market to adjust as it should, we brought the power of billions of government dollars, tax payer dollars into play. Is this what our government should be doing? Is this what your tax dollars should be paying for?
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This Administration breaks new ground each and everyday. Absolutely amazing.

They should eliminate the donut hole entirely. It’s a stupid bug that was sold as a feature.

Does anyone understand what is going on this morning, i.e. why the Dems are fighting so hard against waiting until there is legislative language before voting on the bill?
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it just looks to me like Dems are trying to pull a fast one — and the GOP is winning the argument.

What do you think the Dems are trying to do?

What do you think the Dems are trying to do?
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I don’t know — its just that what they are doing makes no sense to me. All you’re talking about is a (maximum) two week delay that will allow “lawyers” to determine what the legislation actually means.

I think the Republicans are still trying to delay.
When Conrad read the legislative language I thought that proved one of the Republicans points wrong. They wanted the public to read it.
I am all for the plain English.

Uh, Rustyscupper – the Obama administration is trying to partially undo a slimy deal that Republican Billy Tauzin did with the Republican Bush White House, to permanently subsidize the Pharma industry with my tax dollars (and yours, if you pay any). The Bush/Tauzin deal was worth HUNDREDS of billions to Pharma, outlawing reimportation and prohibiting the federal government from actually negotiating drug prices – we have to pay whatever Pharma asks.

Then Bush/Tauzin misrepresented the cost of this bill by hundreds of billions of dollars, passed it by one vote after holding open the vote longer than has ever been done in the history of Congress.

Then a few days later Tauzin resigned his seat and took a $2M/year job lobbying for Pharma.

I am a death penalty opponent, but I would make an exception for Bush, Tauzin, Boehner and delay for this deal. It has cost Americans hundreds of billions of dollars, money which if spent wisely could have saved thousands of lives – in fact, if spent wisely, could fund our entire health care reform. Misspending money like this is murder.

And you have the gall to suggest that Obama is corrupt for PARTIALLY unwinding this deal? If you apologize now, Rusty, I’ll let you do the injection on Tauzin.

[...] While members expected the Senate Finance Committee to begin its Wednesday markup by returning to the contentious amendment related to a White House deal with pharmaceutical companies, Democrat Ben Nelson – who had introduced that amendment – was not present. So Baucus moved on to [...]

dollared:
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Great commentary.

“WHITE HOUSE DRUG DEAL”

Really?

Fire whoever writes your headlines.

Pee ess: Obama’s bargain with Big Pharm was to get them out of the battle so that they would not be weighing in against reform, given that with their resources they would likely have been able to turn the tide to kill it. This is not unusual — in actual wars, one side will create a pact or truce with a potential enemy to keep them out of a battle in which they need not take part.

Great Point, senecadoane.

I think the metapont should be noted: Pharma’s $150M in ads is a drop in the bucket against preserving their abuse of our government in forcing them to be paid tens of billions of excess profit every year.

And yet it would be impossible to pass something over their opposition? They are more powerful than the majority of the people in the US?

Now, let’s add in all the other lobbies that are more powerful than the American people’s will: Big Agriculture, Defense, Wall Street, the Elderly. With Private health care, the Big 5. Look at their percentage of the budget. Look at how easy it is for them to block change with via funding Republicans and negative TV ads.

And who defends the future: workers, researchers, and children? They all lose.

Honestly – is their any hope for this country? Only if we’re so rich that we can give trillions away to the Big 5 and still meet the needs of everyone else. But that ended with globalization, didn’t it?

Either we end the power of these lobbies by taking money out of political campaigns, or we’re done for.

I would encourage you to look at a new site called RX Mole. The web address is http://www.rxmole.com. It is a site that confidentially networks people together looking for competitive prices on local prescription drugs. It is not an online pharmacy, but a way to allow people to locally network prices. It is in beta, but growing like wildfire with all the recent discussion on healthcare and people realizing how different prices can be a local pharmacies.

The drug companies claim they are raising prices because some of their patents will expire soon. However, it is convenient that they are doing so before the planned health insurance reforms go into effect. I recommend the following post: http://euandus3.wordpress.com/2009/11/16/drug-companies-as-feeding-machines/