UPDATE: Billy Tauzin Out at PhRMA

News broke overnight that Billy Tauzin, the Democratic congressman turned Republican turned lobbyist, was stepping down as head of the the Pharmaceutical Research and Manufacturers of America. Tauzin led the group when it struck a mid-2009 backroom deal with President Obama and the chair of the Senate Finance Committee. The deal, according to published reports, would have limited the pharmaceutical industry to $80 billion in losses over 10 years under Democratic health care reform. In exchange, drug companies agreed to support reform and the lobby spent some $100 million on a pro-reform push that included lots of television advertisements. What Democrats really got in exchange for the deal with Tauzin, however, was a promise from PhRMA not to oppose reform.

As Jonathan Cohn points out over at the New Republic, Tauzin’s departure may get some people wondering if PhRMA is about to pull out of their deal with the White House. I suppose that’s possible, but this late in the game, it seems unlikely. There is more info and speculation on Tauzin and PhRMA’s motives online today from Politico and the New York Times, which has done the best reporting on Tauzin and the PhRMA deal.

UPDATE: Paul Blumenthal at the Sunlight Foundation posted a step-by-step accounting of the PhRMA deal today and it’s a must read. (h/t Jonathan Cohn)

Related Topics: billy tauzin, health care reform, health reform, Jonathan Cohn, new republic, new york times, PhRMA, politico, President Obama, Senate Finance Committee, Uncategorized
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  • http://www.ghostnote.com Cookie Puss

    Max Baucus just wet his pants.

  • afguy

    What Democrats really got in exchange for the deal with Tauzin, however, was a promise from PhRMA not to oppose reform.
    .
    But was that what actually transpired?
    .
    IIRC, PhRMA spent a lot of time PRIVATELY working to undermine the process while maintaining their public position of being in support of reform.

  • deconstructiva

    Thanks, Kate. Maybe HCR is doomed after all with Tauzin out. Now who’s going to write the final bill?

  • http://fourlegsrgood.wordpress.com fourlegsgood

    Kate, Tauzin was a republican – he switched parties in 1995.

    We don’t claim him.

  • square1

    In exchange, drug companies agreed to support reform and the lobby spent some $100 million on a pro-reform push that included lots of television advertisements.

    Funny. The “pro-reform push” wasn’t quite as memorable as the 1993 anti-reform push.

    Kind of reminds me of that line from Thank You For Smoking: “Well, sh–, I sure hope it’s not too persuasive.”

  • square1

    If I had to pick one person who most embodied everything that is wrong with money and politics in D.C., it would be Billy Tauzin.

  • http://fourlegsrgood.wordpress.com fourlegsgood

    The good news is that maybe we can just toss out any “arrangements” with big pharma and really reform drug costs as well. Big pharma has been ripping off american consumers for decades.

  • afguy

    square1,
    .
    $100 million doesn’t buy what it used to… inflation, you know…

  • afguy

    Or, as Everett Dirksen used to say, “A billion here, a billion there… and pretty soon you’re talking about real money.

  • stuartzechman

    Kate Pickert:
    .
    Wow!
    .
    Did you say $80 billion in losses over 10 years under Democratic health care reform?
    .
    That’s an amazing deal the Obama Administration got from PhRMA! Wow, just think: $80 billion dollars! That’s got to be a lot of money! Just think of how much we, the United States, saved on prescription drug costs because of that savvy deal!
    .
    I mean, how much did we spend on prescription drugs last year, Kate Pickert?
    .
    Was it like, $10 billion or something? $20?
    .
    That’s funny, I don’t see that you’ve included in this post anywhere the last recorded year’s prescription drug expenditures in the US…there’s those links to horse-race speculation on motives there and there and there, but I still can’t find any links to national prescription drug costs anywhere…
    .
    Hmmm, I guess I’m assuming $80 billion over ten years is a lot, but you haven’t actually given me the contextual information to know if my assumption is correct, Kate Pickert.
    .
    Oh well! I guess this is the internet, and all, and it just takes two seconds (which you didn’t have?) to look up…
    .
    Aha! Here’s the data showing how much the United States, both public and private, spent on health care and prescription drugs in 2008 (link to BIG PDF PDF WARNING of CMS data on health care spending).
    .
    OK…Holy Crap! This says…this says…wow.
    .
    The CMS says that the US spent $2,338.7 billion dollars on health care in 2008! That’s over 2.3 trillion dollars on health care in one year alone!
    .
    Well, that’s some perspective! So…what was the amount spent on prescription drugs?
    .
    Here it is! The CMS says we spent…Oh my God! We spent $234.1 billion in 2008 just on prescription drugs!
    .
    Now wait just a second!
    .
    You said “$80 billion in losses over 10 years under Democratic health care reform“, right, Kate Pickert?
    .
    That’s like, $8 billion a year, which –when compared to $234.1 billion a year– is peanuts! That’s less than 3.5% of savings! That’s 6 times less than you tip a waiter in a restaurant! What the heck is going on, here?
    .
    The geniuses at the White House made a deal with PhRMA in which they got virtually nothing saved for the tax-payers’ (or health care consumers’) pockets! Basically, it looks like they made sure that we got a tiny, tiny discount on drugs over ten years in exchange for verbal promises about advertising.
    .
    What kind of a “deal” is this, that guarantees drop-in-the-bucket “savings” like that?
    .
    I guess I also don’t understand why you didn’t feel it was appropriate to contextualize precisely how little “$80 billion in losses over 10 years” really is in your reporting, Kate Pickert, and how terrible a bargain for patients and tax-payers that would be when compared to what the CMS says is the $234.1 billion per year cost of prescription drugs to Americans.
    .
    It’s not like an editor cut this out of your piece. Did you just not have the time, or something, Kate Pickert?

  • afguy

    If I had to pick one person who most embodied everything that is wrong with money and politics in D.C., it would be Billy Tauzin.
    .
    Or, unfortunately for our side, Tom Daschle. It’s gotta be something in the air or water in DC.

  • stuartzechman

    Is Tom Daschle a close second?

  • stuartzechman

    Beat me to the punch!

  • Ivy_B

    Have to put in a little pitch for an area guy — Jim Greenwood. Even though an R, he was a good represenative.

    http://en.wikipedia.org/wiki/James_C._Greenwood

  • square1

    Daschle is a good example of a politician who has been corrupted. But he isn’t pure evil like Tauzin. Tauzin combines greed, hypocrisy , and chutzpah into one chubby little package.

    Tauzin’s the sleazeball that enabled Enron in gaming the energy markets and defrauding investors and then turned around and brazenly held Potemkin hearings after Enron’s collapse, where Tauzin was full of shock and indignation.

  • hotbbq

    Why can’t we do that now? As Kate says, it’s late in the game. The Obama administration can spin it has fighting back against big Phrma. What are the Republicans going to do? Say no?

  • hotbbq

    That a very good point stuart, but the overt sarcasm dramatics only take away from its poignancy.

  • stuartzechman

    I was trying to make the tedious subject of number comparisons a little more entertaining, I suppose, but point taken.
    .
    My main hope was that it not come across as nasty or overly bitter.

  • piper1

    I’d have to respectfully disagree hotbbq (mmm, hot barbecue…), I think the sarcasm is a decent way to get the point across, especially since stuart has been trying to get these points across using a variety of literary techniques all year and nothing seems to penetrate into the consciousness of the esteemed “journalists” at Time Magazine.
    .
    The dialogue in this country is simply preposterous and I personally greatly appreciate stuart’s dedicated efforts to try to bring some much needed perspective to them. A little sarcasm never hurt no one.

  • http://fourlegsrgood.wordpress.com fourlegsgood

    Kate, thanks for the sort-of correction. But he switched parties 15 years ago – that makes him a retired- republican congressman.

    Of course you should note that he started out as a dem, and then switched parties – but to label him “the Democratic congressman…” is misleading, even with the “turned republican turned lobbyist.” Sorry to nit-pick, but Tauzin is a self-interested weasel. He left the party 15 years ago to sign on with Newt’s contract on America. We don’t want any connection with him.

  • deconstructiva

    My main hope was that it not come across as nasty or overly bitter.
    .
    I’ve always doubted stuart meant criticisms to be personal attacks, but are the reporters seeing this too? I know sarcasm flows like water here and I’m more guilty than most. Amy has long been criticized for not responding, but is this partly from the venom she receives from others? Kate’s been silent lately too.
    .
    btw, stuart, at morning must reads / #8 thread, would you reply to latest pnnto and me? I’m really interested in this line of thought. Thanks.

  • shepherdwong

    “What Democrats really got in exchange for the deal with Tauzin, however, was a promise from PhRMA not to oppose reform.”
    .
    It’s both snarky and a bit disingenuous – hard to avoid another (HRC cost) horse-whippin’ I guess. Kate makes abundantly clear what the WH thinks it got out of the deal:

    What Democrats really got in exchange for the deal with Tauzin, however, was a promise from PhRMA not to oppose reform.

    That’s what they needed to do “reform”. Obviously the $80 billion was window-dressing.

  • anon76

    I’m not quite there with you yet, Stu. The $80 bln/10 years is the amount of losses, while the $234 bln/year is total amount of sales. Before we can say it is a terrible deal (which it likely is), we’d need to know what sort of margins PhRMA is working with.

  • stuartzechman

    I don’t think it’s losses as in “profit losses”, anon76.

    The terms of the initial cost-cutting deal included $30 billion go directly towards closing the “donut hole” in Medicare prescription drug coverage. The “donut hole” is a term for the gap in coverage that occurs within the Medicare prescription drug coverage. For those purchasing prescription drugs through the Medicare program coverage cuts off at $2,700 spent and does not pick back up again until $6,154 is spent by the participant. The amount proposed in the deal, 50 percent coverage for drugs within the coverage gap, however, would not completely close the “donut hole.”

    I think we’re talking about billions of dollars in reduced price sales.

  • bobcn1

    This is getting ridiculous. In a post Scherer put up last week he described Sen. Shelby as: ‘the Alabama Democrat-turned-Republican’ when discussing Shelby’s blanket hold on Obama appointees so he could get more pork for Alabama.
    .
    Once again, a goper that switched parties long ago was being described as a ‘Democrat-turned-Republican’. The description didn’t include the fact that the switch happened 16 years ago and that Shelby has been harshly partisan as a republican ever since.
    .
    If Pickert or Scherer’s intent is to suggest to that the Democratic party has anything to do with the behavior of Shelby or Tauzin, then they are misleading their readers. If that’s not their intent then what is it?

  • stuartzechman

    shepherdwong
    .
    I can’t tell whether or not I’m pleased to hear my prose described as “horse-whippin’”
    .
    I think that the deal isn’t really being explained well in the press.
    .
    It would be really, really helpful to folks’ understanding of the situation if they really understood what the Obama Administration gave up in exchange for an industry not running an ad campaign.
    .
    It appears that Obama and Rahm gave up Canadian drug prices. OK, f*ck Canadian prices, they gave up Swiss prices, even. It appears that they gave up the solvency of Medicare, especially part D. They gave up the ship, which probably means they never intended to sail it, not ever.
    .
    It’s incredible to me that this stunning piss-away of the policy that could have really turned things around for so many people –for the whole system, really– has been shrugged at. I’m not even sure they pissed it away. Maybe they just didn’t care, maybe it was just a chip in a game, maybe they were just bluffing –because they don’t believe in government setting market prices in defiance of industry ever. They are Third Way, after all. Joe Klein still waxes about “market-based reforms” to Medicare, even this last month he still threw that in.
    .
    It’s incredible that the word “deal” is all that’s been used to describe what the Obama Administration gave up on behalf of the American people.

  • stuartzechman

    deconstructiva:

    at morning must reads / #8 thread, would you reply to latest pnnto and me? I’m really interested in this line of thought. Thanks.

    I have responded indicating that I’m interested in your line of thought (link to that response).

  • deconstructiva

    …and I just replied. I thought you were bothered with my comment so I apologized w/ more explanation. I hope it cleared things up.

  • shepherdwong

    “I can’t tell whether or not I’m pleased to hear my prose described as “horse-whippin’”
    .
    Hey, somebody’s got to do it. I commend you.
    .
    “It would be really, really helpful to folks’ understanding of the situation if they really understood what the Obama Administration gave up in exchange for an industry not running an ad campaign.”
    .
    You think so? I’m guessing that’s why our elites work so tirelessly to try to avoid giving us yet another crystal-clear illustration of how politics and the profit considerations of our corporate owners trump good public policy at the expense of everyone else. Nothing like a shiny $80 billion to distract people from the ugly reality. I was just pointing out that Kate told us straight out the point of the whole deal: trading away the greater public interest for a chance to do the exact amount of reform that industry will allow.

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