Finance Committee Democrats Buck the White House

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For the most part, 13-10 vote tallies on the Senate Finance Committee’s heath reform bill this week will be strictly along party lines. There are 13 Democrats on the committee, including Chairman Max Baucus, and 10 Republicans. But a 13-10 divide this afternoon on an amendment from Democrat Bill Nelson indicated a different kind of split.

Nelson’s amendment would have gutted a deal struck earlier this year between the White House and pharmaceutical companies. Although the amendment failed to pas, Nelson got the support of nine other Democrats; all 10 Republicans, plus Baucus and Democratic senators Thomas Carper and Robert Menendez voted against the proposal, which in effect, leaves the White House deal in place – for now.

As I wrote in an earlier post when Nelson first offered the amendment on Tuesday, the White House deal with PhRMA essentially calls for drug companies to cut prices on name brand drugs by 50% for seniors stuck in what’s known as the doughnut hole, a gap in prescription drug coverage. (The deal is written into the current Baucus bill.) PhRMA also agreed not to oppose health care reform and to, in fact, wholeheartedly support it with cold hard cash in the form of advertising and lobbying. In exchange, President Obama – who appeared at a press conference with AARP and Baucus to announce and endorse the deal – reportedly promised the industry would not have to weather any more cuts. The deal, struck in June, had one further purpose – to publicly show early in the health reform debate that special interests were “coming to the table.” In essence, the White House was trying to send a signal to other special interests that if they wanted to escape the wrath of Democrats writing health reform legislation, they had to step up to the plate early.

But in the light of day, many Democrats – including Nelson – thought what was good public relations and backroom deal-making didn’t necessarily make for great policy. The deal with PhRMA is not the huge sacrifice for drug makers that it might seem. The companies, for instance, would likely sell many more drugs because of the discount. Nelson’s amendment, on the other hand, would have saved the government more money and upset the pharmaceutical industry much more. The amendment called for the reversal of a provision in a 2003 law that shifted drug coverage for Americans eligible for both Medicaid and Medicare from being provided by Medicaid to being provided by Medicare. (In plain terms, beneficiaries weren’t really affected, but the government now pays much more for drugs than before the 2003 law.) Nelson suggested the savings resulting from his amendment should go toward closing the doughnut hole entirely, not partway, as the White House deal would.

In re-introducing his amendment today, Nelson admitted at the outset that he knew it would not pass, but said he had Baucus’s support to introduce the provision on the Senate floor in the future. After some debate, with Democrat Jay Rockefeller saying Nelson’s “rapture” over the amendment was an indicator of how good it was policy-wise and ranking Republican Chuck Grassley saying it amounted to “government price controls,” Baucus said, “I want to close the doughtnut hole as much as anybody…but this is inappropriate…Frankly, I wish the senator had not pushed this amendment because it’s not going to pass…the White House did reach an agreement…and that’s progress.”

Debate over Nelson’s amendment today, however, did not get as heated as on Tuesday, when Grassley said Democrats should be “embarrassed” by Obama for cutting the deal with PhRMA. Today, as the senators calmly laid out their positions on prescription drug coverage, they even offered advice on their favorite methods for lowering cholesterol. Democrat Chuck Schumer said Lipitor works for him, while Grassley said he likes Omega-3 pills, to which Nelson quipped that grapefruit might work just as well.