Are We There Yet?

Do we have that promised translucency in government where every one reads the bills and all negotiations are done in public forums? Wasn’t that a major campaign promise? Were we not promised there would be no backroom deals? Feeling lied to yet? Yes, well, maybe you should take two overpriced aspirin and call me in the morning.

President Obama’s deal with the drugmakers stinks of everything that was wrong with the Bush administration and everything that makes me think we’re never going to get rid of the corruption in Washington, D.C. Even Robert Reich (Obama apologist extraordinaire) blogs about it on his blog with the thread How the White House’s Deal With Big Pharma Undermines Democracy.

Last week, after being reported in the Los Angeles Times, the White House confirmed it has promised Big Pharma that any healthcare legislation will bar the government from using its huge purchasing power to negotiate lower drug prices. That’s basically the same deal George W. Bush struck in getting the Medicare drug benefit, and it’s proven a bonanza for the drug industry. A continuation will be an even larger bonanza, given all the Boomers who will be enrolling in Medicare over the next decade. And it will be a gold mine if the deal extends to Medicaid, which will be expanded under most versions of the healthcare bills now emerging from Congress, and to any public option that might be included. (We don’t know how far the deal extends beyond Medicare because its details haven’t been made public.)

Let me remind you: Any bonanza for the drug industry means higher health-care costs for the rest of us, which is one reason why critics of the emerging healthcare plans, including the Congressional Budget Office, are so worried about their failure to adequately stem future healthcare costs. To be sure, as part of its deal with the White House, Big Pharma apparently has promised to cut future drug costs by $80 billion. But neither the industry nor the White House nor any congressional committee has announced exactly where the $80 billion in savings will show up nor how this portion of the deal will be enforced. In any event, you can bet that the bonanza Big Pharma will reap far exceeds $80 billion. Otherwise, why would it have agreed?

Indeed, why would they agree?  It’s just the same story any where these days, no matter what the industry.  We have a ruling class made up of  MBAs, living off bonuses, and running to the government to protect their jobs when they make bad decisions.  Their decisions aren’t even based, usually, on the product lines they produce.  It’s all about the bonuses and the stock prices and nothing more.  For big Pharma, life saving drugs are a by product of the deal.  Reich was a Washington insider with a place at the table during the 1994 slaughter of our first attempt to get health care reform.  He’s been a consistent supporter of universal health care.  He doesn’t come out and say it directly, but if this isn’t a description of pay-to-play coming out of this administration, I’ll toss my thesaurus into the Mississippi.

But I also care about democracy, and the deal between Big Pharma and the White House frankly worries me. It’s bad enough when industry lobbyists extract concessions from members of Congress, which happens all the time. But when an industry gets secret concessions out of the White House in return for a promise to lend the industry’s support to a key piece of legislation, we’re in big trouble. That’s called extortion: An industry is using its capacity to threaten or prevent legislation as a means of altering that legislation for its own benefit. And it’s doing so at the highest reaches of our government, in the office of the President.

When the industry support comes with an industry-sponsored ad campaign in favor of that legislation, the threat to democracy is even greater. Citizens end up paying for advertisements designed to persuade them that the legislation is in their interest. In this case, those payments come in the form of drug prices that will be higher than otherwise, stretching years into the future.

The public interest is being bartered away in some effort to get some kind of change, no matter who it benefits.  This is just another example of a corporate giveaway wrapped up in the mantle of doing something.   Here’s James Ridgeway from the MoJo blog in More on that White House Drug Deal.

Since I wrote last week about Obama’s capitulation to the drug industry, the White House sought to tamp down protests by Democratic House and Senate leaders by sweeping the whole business under the rug. Instead of openly agreeing to promise no control over pricing—the Obama public line earlier in the week–the White House now says, according to the Times on Saturday morning, that it’s all a big misunderstanding and the pricing question was not discussed.

Oh, come on. That is a ridiculous line, since pricing of pharmaceutical products is not only a key issue in this year’s health care reform debate, but has been at the heart of the debate over controlling drugs since the Kefauver amendments in the 1950s. Remember, the mechanism that allows Big Pharma to have its way on pricing is patent protection, which has gone virtually unchanged over the years. What the companies are looking for is a way to maintain their monopoly.

There’s your bottom line for you.  They want their monopoly.  Again, it’s all a just a business to them.  It wouldn’t make a difference to them if they were producing Sprockley’s Sprockets or blue cheese or the cure for cancer and AIDs.  The bonus class want to keep their overpriced jobs and they love monopoly.  It’s more about protecting the profits on whatever business than they’ve got now than innovating new drugs or providing new solutions.  You can just tell by the merger and acquisition rumors around the street that they’re prepared to eat the seed corn if it gets them a little cash flow from some one’s patent.  These are people that should be developing new antibiotics and antivirals.  Instead what we get are fixes for their erectile dysfunction problems and advertising for antidepressants and anti-anxiety drugs and salaries for lobbyists and huge numbers of donations to political campaigns.  This is rent seeking go mad. They’re even protecting their patents on old drugs with more resources these days than the spend on research and development. How does any of this make sense for any of us other than the bonus and the political class?

Let’s stick with Mojo for awhile and look at Ridgeway’s previous blog entry.

Obama’s sellout on health care is hardly any secret, but this week’s news of an outright backroom deal guaranteeing drug makers control over pricing is one for the history books. Even the Republicans didn’t lay down for big business quite like this.

As it now stands, there is no control over drug pricing in the US (save for a gesture in that direction under the Medicare Part D prescription drug insurance plan for the elderly). The system allows drug firms to set prices for prescription drugs under Medicare, in what amount to sweetheart deals with private insurance companies. Because drug pricing and insurance costs are set—basically at will—by these two industries, critics have demanded the government step in and set prices. Those demands haven’t gone anywhere, but never has there been an explicit announcement from on high about the arrangement. It’s always been just another one of Washington’s dirty little secrets.

So, for the appearance of bi-partisan health care reform, we get the shaft that keeps on coming, way until our senior years. Check out this bottom line.

As for the drug company’s $80 billion voluntary gift to the President to help achieve the appearance of bi-partisan health care reform, it’s all smoke and mirrors. No more than $20 billion will go to help Medicare recipients. The rest is to be doled out according to some unknown plan set forth by the drug makers. And the money to help the elderly is limited to brand-name drugs, many of them coming off patent and about to go generic. The industry wants to keep on selling the more expensive brand-name versions, and thus will supposedly subsidize the elderly to buy those products. Put another way, a person covered under Medicare could save money under the existing plan if he/she buys generics. Under the Big Pharma plan, elderly people who choose the name-brand drug will get a subsidy to keep them from switching to generics that would save money across the entire system.

This just isn’t bad public policy, it’s malevolent public policy.  I’m at a loss for words to describe what the motivation is for this continual sell out to corporate interests on terms that are so harmful to the country it’s law suit worthy.  This stuff comes with damages!  What’s even more confusing is that a good deal of the so-called  liberal political class seem to be going along with it.  Are there any real democrats left standing?  Why is the administration doing this?

So, let me close with Reich’s bottom line.  It doesn’t include an apology for being part of the crowd that brought us this mess, but it at least contains a warning.

I don’t want to be puritanical about all this. Politics is a rough game in which means and ends often get mixed and melded. Perhaps the White House deal with Big Pharma is a necessary step to get anything resembling universal health insurance. But if that’s the case, our democracy is in terrible shape. How soon until big industries and their Washington lobbyists have become so politically powerful that secret White House-industry deals like this are prerequisites to any important legislation? When will it become standard practice that such deals come with hundreds of millions of dollars of industry-sponsored TV advertising designed to persuade the public that the legislation is in the public’s interest? (Any Democrats and progressives who might be reading this should ask themselves how they’ll feel when a Republican White House cuts such deals to advance its own legislative priorities.)

We’re on a precarious road — and wherever it leads, it’s not toward democracy.

Just read that last sentence over and over to yourself and wonder how so many people got fooled.  Yes, Robert, our democracy is in terrible shape.

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