What is pharma's motive, payback for its cooperation?

The plan negotiated between the Senate Finance Committee and PhRMA, the trade association for the pharmaceutical industry is becoming increasingly troublesome as the debate over healthcare reform continues to drag on and on.

Many people worried about the new-found spirit of cooperation by the pharmaceutical industry when it was a guest/participant with others in the medical/insurance and healthcare industry at The White House.

This was after all the industry that had benefited from the last-minute engineered by then-LA Congressman Billy Tauzin that excluded negotiations for Medicare Part D prescription medicines, gave us the legacy of The Doughnut Hole, and helped pharmaceutical companies gain windfall profits.

And, it was former Congressman Tauzin who became a poster boy for pharma payback when he was rewarded with the $2 million a year job as head of PhRMA.

During the election, candidate Obama supported price negotiation for Part D medicine prices, and personal importation of safe, affordable prescription medicines from licensed, registered pharmacies in Tier One countries. While in the Senate, he was even a co-sponsor of personal importation legislation and early in his administration provided budget support for importation.
Now, these positions seem to have been replaced with "outreach" to the drug companies, which have shown their appreciation by pledging to cooperate with health care reform, and even to reduce prescription drug prices for seniors in The Doughnut Hole by as much as $80 billion.

So sure of its position is PhRMA that during the President's meetings in Europe, with the Pope and then his African visit, that Tauzin boasted that at a meeting at The White House an unnamed aide had told him that importation might not be necessary since the industry was being so cooperative and that the other savings from the reforms might be so great as to make lower drug prices unnecessary.

In other words, even though pharma has imposed upon the American public the highest drug prices in the world, that's "OK" and it will be allowed to continue its predatory pricing rather than having to reduce prices.

It is a bold move by Tauzin to make statements about Administration policy. Our attempts to identify the source of the statement about no need for importation have elicited no reaction from The White House press office, even though we were promised two weeks ago that the inquiry had been directed to the proper people and that we would receive an answer. So much for transparency and open government.

We should have had an inkling of the possibility that an Obama administration might crumble on importation when, during the election, Dora Hughes, a medical advisor for the Obama campaign, said that the candidate, if elected, might be willing to change his position of support of importation.
At that time, we sought clarification from campaign spokespersons and were assured that candidate Obama's support of importation was as strong as ever.

Back to the present: policy-makers and many advocates continue to point to The Doughnut Hole offer by PhRMA as 'good' for seniors. But, there is confusion about details of the arrangement. And, as some have noted, by lowering prices for those in The Doughnut Hole, they will only be in many instances the same lower prices for a temporary time as the regular, everyday prices paid by citizens in other countries. Why shouldn't such prices be negotiated for all medicines.

The question must also be asked: Since there is a proven record of personal importation of safe, affordable medicines from licensed, registered pharmacies in Tier One Countries (those whose oversight and regulations of pharmaceutical medicines and pharmacies meet or even exceed those of the U.S, why shouldn't such personal importation be a part of public healthcare policy? Or has PhRMA, as indicated by Tauzin's statement after his White House meeting, negotiated restrictions on such importation, perhaps even seizures of vital medicines, which was banned by the U.S. Congress in 2006 and which has arisen more recently as Senator David Vitter (R-LA) successfully sponsored an amendment to ensure that U.S. customs is forbidden to engage in such seizures? Added to this, since the 'full price' as set by PhRMA will be credited towards satisfying The Doughnut Hole, it means that seniors who have been unable to purchase medicines while in the Hole will hopefully be able to continue their medications and will get out of The Doughnut Hole where they can has catastrophic coverage.

At that point, the medicines return to full price with the U.S. government paying 95 percent of full costs, generating a government-supported windfall for pharma. Is this what PhRMA negotiated with the U.S. Senate? And is this a part of the price we must pay for such 'cooperation?' In the next few postings, we show why this might only be the tip of the iceberg.