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White House, Big Pharma, We Have a Problem

In June, I wrote a story that raised big questions about the value of the government’s $80 billion deal with Big Pharma, and wondered if the deal came with the trade-off of killing legislation that would enable the government to negotiate directly with pharmaceutical companies for lower prices. Such a trade-off would be indefensible.

That week, I took extraordinary steps to determine if this was the case. I spoke personally with a White House Deputy Press Secretary twice, followed by multiple emails. I also spoke, personally, to the press official for the Senate Finance Committee, followed by multiple emails. There was no doubt as to what I was asking. I never got a response from either of them.

That Thursday, I asked Gibbs about it at a daily briefing:

Q Thank you, Robert. I have two quick ones on health care. The first one, in the speeches about the $80 billion deal with the pharmaceutical companies, I haven’t heard anything a bout negotiating price — Medicare negotiating price with the pharmaceutical industry. I wanted to know if that was one of the tradeoffs for getting this $80 billion was that we’re not going to pursue that now.

MR. GIBBS: Well, look, again, the structure of part of that agreement was to use a portion of that $80 billion to pay up to — for the pharmaceutical industry to pay up to 50 percent of the cost for a name brand drug for a senior that falls between the point at which Medicare Part D stops providing help, and when catastrophic coverage — I think it is $6,500, a little bit more than $6,500 — level kicks in. So filling in that — what’s commonly known as — ironically, in health care — the doughnut hole, about — that up to 50 percent of the name brand — the price for that name brand drug would be paid for, and I think that provides a hefty discount that will bear appreciable benefits for seniors all over the country.

Q Has there been an agreement not to pursue a Medicare –

MR. GIBBS: I don’t know the answer.

Q I’m talking about S. 330.

MR. GIBBS: What was that?

Q Senate bill 330?

MR. GIBBS: You’re 330 bills ahead of me on that. (Laughter.) I will check on it.

Of course, now, the New York Times reports that the White House confirms that the deal did include an agreement to kill price negotiation laws:

In response, the industry successfully demanded that the White House explicitly acknowledge for the first time that it had committed to protect drug makers from bearing further costs in the overhaul. The Obama administration had never spelled out the details of the agreement….A deputy White House chief of staff, Jim Messina, confirmed Mr. Tauzin’s account of the deal in an e-mail message on Wednesday night.

“The president encouraged this approach,” Mr. Messina wrote. “He wanted to bring all the parties to the table to discuss health insurance reform.”

This is deeply disturbing on many levels. If Gibbs didn’t know about this provision after the deal was made, then it stands to reason that the President didn’t know, either. With the Senate Finance Committe stonewalling me about it, one could conclude that they kept the President in the dark about it until it was already a fait accompli.

The other possibility is that Robert Gibbs was left in the dark, a frightening prospect for a White House reporter, and for any American.

Beneath it all is the fact that the government dealt away our right to negotiate lower drug prices (just like any other large customer), and they did it for peanuts. This is a disgrace.

I emailed Gibbs and his deputy for an explanation, and am awaiting a reply.

UPDATE: Jake Tapper asked Gibbs about the discrepancy at today’s White House Press Briefing.

TAPPER: Can I just ask a quick follow up? In June you were asked about the deal and whether or not the deal with PhRMA implied that the White House signed off on no other legislation, such as allowing Medicare to renegotiate with PhRMA. And you said you didn’t know the answer to that. Was it because you personally didn’t know or because the Senate Finance Committee hadn’t informed the White House of that aspect of the deal?

GIBBS: You’re asking me to recall why I didn’t remember something in June. I — I — that I don’t know the answer to. Obviously, the agreement that we have is — is in the confines of health insurance reform that’s being worked on right now.

Related:
Big Pharma Offers President Obama Crumbs to Preserve Their Cake [Daily Dose]

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