House Republicans released the first batch of documents from a health care investigation today about the deal struck between President Barack Obama and the pharmaceutical industry during consideration of the president’s health care overhaul.
The documents reveal new details about a pact that is widely known, but they offer a close look at the transactional process of legislative sausage-making.
The documents primarily come from the point of view of employees and lobbyists at the Pharmaceutical Research and Manufacturers of America, and they largely consist of PhRMA’s impressions of what White House officials were doing to pressure them into an agreement.
For instance, White House officials told PhRMA that Obama would announce support for a policy opposed by the pharmaceutical industry in his weekly radio address, and internal emails suggested the White House might be dangling that possibility as a way to pressure the sector to agree to a deal more quickly, according to a June 10 email from Bryant Hall, a top lobbyist for the industry.
Other emails suggest the sector believes it ultimately cut a good deal because the White House felt pressure to tout progress on the Sunday news shows after a particularly ugly news cycle.
Although the 2010 health care law has provoked fierce anger on the right, and the details of the PhRMA deal are sure to draw conservative ire, the documents may provoke significant anger on the left as well.
For instance, a June 3 email from Nancy-Ann DeParle, then the White House’s key liaison on health care reform, said she and other senior advisers had decided the White House would oppose drug reimportation, a policy favored by liberals, “based on how constructive you guys have been.”
In mid-2009, PhRMA agreed to $80 billion in payment reductions over 10 years from provisions that would close the Medicare Part D “doughnut hole,” increase and expand Medicaid rebates, and levy a “health reform fee,” according to a PhRMA memo outlining the terms of the deal.
The industry also agreed to fund television advertisements with Harry and Louise — the famous advertisement characters that helped torpedo President Bill Clinton’s health care bill — supporting Obama’s legislation.
The White House agreed not to include price controls and other cost-cutting measures in Medicare Part D as well as price controls on individuals eligible for both Medicare and Medicaid, the memo says.
Republicans have seized on the findings as evidence of hypocrisy, comparing the back-room deal-making with Obama’s campaign vows to negotiate the health care law in public.
As early as May 2009, the White House began working with PhRMA. Rahm Emanuel, now the mayor of Chicago and then the White House chief of staff, told a PhRMA representative he would tell DeParle that “PhRMA needs a direct line of communication, separate and apart from any other coalition,” according to a May 5 email from PhRMA’s Sara Latham.
On May 11, 2009, the White House announced the health insurance industry and several other major industry groups had agreed to cut health care costs by $2 trillion over 10 years.
The details of how the costs would be decreased were fuzzy, and the groups began to distance themselves from the agreement in the days after it was announced.
In emails, PhRMA lobbyists discussed the press reports as a “fiasco” for the White House.
“Perfect timing to cut our deal w the White House as this is swirling,” Hall wrote to colleagues.
A letter was being organized to push back on the press reports, which reiterated support from major industry groups to pass a health care reform bill.
In a May 15 email, Hall said PhRMA needed to sign the letter, or else then-White House spokesman Robert Gibbs “is going to call PhRMA out specifically by name as an outlier at the press conference if we do not. Rahm is already furious. The ire will be turned on us.”
The group signed the letter.
On June 10, PhRMA officials met with then-White House Deputy Chief of Staff Jim Messina, DeParle and staffers from the Senate Finance Committee to negotiate the deal.
DeParle proposed policies that would cut revenues for the pharmaceutical industry by $100 billion over 10 years, according to PhRMA documents. Those proposals were eventually dropped, however.
During the next week, Obama suffered what the PhRMA lobbyists described as a politically difficult week. A staff memo issued by Republicans on the House Energy and Commerce Committee points specifically to two news stories, in the Washington Post and New York Times, that raised concerns about delays in the push for the bill and about its costs.
On June 18, Ken Johnson, PhRMA’s senior VP for public relations, said in an email to Hall and former Rep. Bill Tauzin that the White House had already leaked that a deal would be announced to the Washington Post.
“It’s pretty clear that the Administration has had a horrible week on health care reform, and we are now getting jammed to make this announcement so the story takes a positive turn before the Sunday talk shows beat up on Congress and the White House,” he said.
“Yes, that’s why they are doing it, but it’s also why we got a good deal,” Hall replied.
On July 7, PhRMA CEOs and leadership met with Sen. Max Baucus (D-Mont.), Emanuel, DeParle and others to hammer out final details and shake hands on the deal.
Democrats on the Energy and Commerce Committee, led by ranking member Henry Waxman (D-Calif.), said the GOP’s staff memo outlining the documents was “one-sided, misleading, and full of significant errors.” Changes to the law resulted in revenue cuts of $100 billion to $125 billion, not the $80 billion agreed to by the White House, Waxman said in the statement.
Waxman also defended the White House’s actions.
“President Obama’s efforts to enlist the support of private industry are exactly what presidents have always done to enact major legislation. His efforts are what Americans expect of their leaders. They are no different than those of President Lyndon B. Johnson in enacting Medicare in 1965 or President George W. Bush in expanding Medicare to add a prescription drug benefit in 2003,” Waxman and Rep. Diana DeGette (D-Colo.) wrote in a statement.
Waxman recently told Roll Call there was nothing wrong with the White House negotiating a deal with PhRMA but that he thought the terms of the deal were tilted toward the industry.
“I thought that the pharmaceutical industry got a very good deal, and I thought the administration could’ve gotten more from them,” Waxman said.
On January 3, Sen. Kirsten Gillibrand, D-N.Y., raises her right hand as her son Henry messes up her hair while Vice President Joseph R. Biden Jr., delivers the ceremonial swearing-in in the Old Senate Chamber. Gillibrand's other son Theodore, lower right, looks on.
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