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NY Times: Congress Should Abandon Obama’s Deal With Pharmaceutical Industry

by on Wednesday, November 18, 2009 at 2:15 pm EDT in Healthcare, Politics

It’s been long reported now how President Obama — who had promised total transparency in all health care negotiations during his campaign (stating he would have them all televised on C-Span) — proceeded to cut a secret backroom deal with the pharmaceutical industry as far back as summertime.  The terms of their deal violated several additional promises he’d made during the campaign — terms he explained at the time which had long kept meaningful health care reform from ever being realized.  As candidate Obama he vowed that he would do it differently, yet once elected he quickly abandoned his ‘change’ agenda and embraced the much easier ‘status quo.’

The terms of his pharmaceutical deal assured the industry that they would give up no more than $80 billion over the next ten years (an insignificant fraction — 2.6% — of the $3 trillion Americans are predicted to spend on drugs over that same time period).  This was EXACTLY the kind of deal Obama criticized during his campaign — the types that were written by industry lobbyists and only benefited them.  For that $80 billion, Obama promised them that Congress wouldn’t use its bargaining power to lower prescription drug costs, and that Americans would be prohibited from importing cheaper drugs from Canada.  And the pharms agreed they’d throw in $150 million to pay for his ‘health reform’ advertising, and not attempt to block his efforts.

Today’s NY Times Editorial blasted the deal yet again, on the recent revelation:

Now come the price increases. As Duff Wilson reported in The Times on Monday, the industry has raised the wholesale prices of prescription drugs by about 9 percent in the past year. That appears to be the highest annual increase since 1992.

Duff Wilson/NY Times earlier reported:

[This] will add more than $10 billion to the nation’s drug bill, which is on track to exceed $300 billion this year. […]

The drug trend is distinctly at odds with the direction of the Consumer Price Index, which has fallen by 1.3 percent in the last year.

The Times contends that the drug companies are trying to establish a higher price base, before any legislation tries to reign them down — thereby negating any real price reductions.  Sort of like the old retail trick of raising prices thirty per-cent, to then offer customers a 30% off sale.

The Times states that:

The industry’s maneuver suggests that the Senate’s deal with the industry should be abandoned in favor of the much tougher demands in the reform bill passed by the House. The House bill requires rebates and discounts from drug makers that may save the government about $150 billion over 10 years, according to the chief actuary for the Center for Medicare and Medicaid Services. The House bill also authorizes the secretary of health and human services to negotiate with the companies to obtain lower prices for drugs sold to Medicare beneficiaries and to a new public plan if one is approved.

The government needs every penny it can get to help cover the uninsured. Given the industry’s last-minute price increases, it seems prudent to ignore the supposed deal and demand a greater contribution.

I couldn’t agree more.

The thing Obama seems to forget is that pushing ANY OLE deal through (regardless of its merit) for the sake of being able to claim he achieved ‘health care reform’ will only harm him, the left, and the American people down the road.  Because by appeasing the pharmaceutical and insurance industries — i.e. protecting their profits — he’s foregoing any real savings to the American taxpayer and public.   And, as a result, his plan will end up costing both the tax payer and the consumer even more than they’re paying now — all of which will be used by the GOP (in their talking points) four years down the road as PROOF that this entire government intervention into the corrupt health care industry was a fiscal calamity — which will set back any hopes for real reform for decades.

When will Obama learn that he will NEVER achieve meaningful change, if his primary concern is to keep every special interest group happy with him?