White House stands behind $80B deal with pharma

Government negotiation of drug prices? Bigger Medicare rebates? No longer in the cards. In a major coup for PhRMA, the White House publicly promised drugmakers that they would stand behind that $80 billion cost-savings deal with Sen. Max Baucus. That means the administration will help block Congressional efforts to wring additional cuts from the pharma industry.

Drugmakers were the first to agree to industry-wide cost savings as a way to further healthcare reform, and their support for the process was bill as a coup for President Obama. "We were assured: ‘We need somebody to come in first. If you come in first, you will have a rock-solid deal,'" PhRMA chief Billy Tauzin told the New York Times.

And now the White House publicly confirms what went on behind closed doors. "The president encouraged this approach," a deputy White House chief of staff told the NYT via email. "He wanted to bring all the parties to the table to discuss health insurance reform." That backing may get the president into trouble with Congress, which of course likes to think it's running the reform process. But it's definitely going to cement a friendship with pharma.

Interestingly, the administration has increasingly focused in on the insurance industry as the bogeyman of healthcare. And that may be another clue to the pharma-presidential alliance. The NYT sussed out pharma lobbyists who said that though the industry opposes the publicly funded insurance plan that would compete with corporate insurers, it won't fight the measure, at least in part because of that $80 billion deal. The insurance industry, however, is doing its level best to scuttle the public plan. We'll see how it all shakes out this fall.

- read the NYT story