More Fact Check: The Obama Flip-Flop On Medicare Drug Prices

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The New York Times reported Saturday that the pharmaceutical industry has “authorized its lobbyists to spend as much as $150 million on television commercials supporting President Obama’s health care overhaul.” By all appearances this seems like clear payback for Obama’s decision to, among other things, reverse his campaign promise on negotiating prices for Medicare prescription drugs.

[UPDATE: For more on this topic, see this follow-up post.]

There are no firm public numbers on how much money this reversal will mean for the drug industry, and therefore how much it will cost taxpayers, but it could be huge. A 2005 study by Families USA found substantial differences between the lowest price that Medicare pays for the top 20 drugs used by seniors and the lowest price paid by the Veterans Affairs system, which does negotiate drug prices. (See page 5 of this document (pdf); whereas the VA paid $747.36 for a year of Lipitor, Medicare paid $1,040.40, a difference of 39 percent.)

What is clear is that it is a major league flip flop for Obama, who, as the Huffington Post has amply documented, repeatedly pledged to take on the drug companies and allow Medicare to negotiate cheaper prices. There are many times he made this pledge. But perhaps the clearest is the statement he made on December 13, 2007, during one of the Democratic primary debates, when he connected Medicare drugs to his pledge to “change how business is done in Washington.” See here at 2:52:


SEN. OBAMA: But one thing I have to say, we are not going to make some of these changes unless we change how business is done in Washington. The reason that we can’t negotiate prescription drugs under the Medicare prescription drug plan is because the drug companies specifically sought and obtained a provision in that bill that prevented us from doing it.

MS. WASHBURN: Thank you.

SEN. OBAMA: And unless we change that politics, we’re going to continue to see the waste that we’re seeing in the entitlement programs.

Apparently some business in Washington does not change. For other examples of the flop flip, see the HuffPo rundown here.