Capitol erupts over pharma's $80B deal

Back when Big Pharma made its $80 billion cost-cutting pledge [1], the deal was pegged as a coup for President Obama--a high-profile commitment of support from key players in healthcare. But drugmakers came away from the table with the idea that their $80 billion pledge would inoculate them from further healthcare reform cuts. When proposals for those very cuts arose, pharma cried foul. The President's staff first affirmed the apparent quid pro quo, then backpedaled. Congressional Democrats stormed the White House.

So now what? Pundits are decrying the horse-trading, if it in fact was an explicit, straightforward 'We'll-cut-$80-billion-and-you'll-protect-us arrangement' as Tauzin says. Robert Reich went so far as to call it a "threat to democracy" in Salon. Lawmakers are saying that they're not bound by any such arrangement, no way and no how. And the White House is saying that a.) it didn't promise that there wouldn't be price negotiation in the reform package, and b.) that it stands behind its deal with pharma [2], calling $80 billion "an appropriate number" for cost cuts affecting drugmakers.

Meanwhile, pharma is prepping an ad campaign in support of healthcare reform, authorizing up to $150 million for the purpose. That's a whopper of an advertising blitz; as the New York Times points out, presidential candidate John McCain spent $126 million on ads. But PhRMA is reserving the right to scale back that campaign, presumably depending on how the legislation affects the industry. And given the Congressional revolt against that suddenly controversial $80 billion deal, lawmakers may just bend over backward to prove they're not beholden to it. Your guess is as good as ours.

- see the Salon article [3]
- check out the coverage [4] in Time
- read the Bloomberg story [5]
- get the news [6] from the NYT

ALSO: CVS Caremark is supporting U.S. legislation to provide health coverage for tens of millions of uninsured, saying it would result in a "meaningful" expansion of drug use that may boost sales. Report [7]

Related Articles:
White House stands behind $80B deal with pharma [2]
Reform passes House with pros, cons for pharma [8]
Drugmakers pledge $80B to health reform [1]