Obama, Yeah That Deal I Made With Pharmaceutical Companies To Only Rip Them Off For $80 Billion? It May No Longer Be Operative

Just two days ago the pharmaceutical industry thought they cut a deal with Obama to have to fork over "only" $80 billion in cost savings. In return they would be left alone and even toss in $150 million in commercials supporting Obamacare.

Well, Obama wants to alter the terms of the deal and the drug makers can only pray he doesn't alter it too much.

"In terms of savings for you as a Medicare recipient," President Obama told a town hall attendee yesterday, "the biggest (change) is on prescription drugs, because the prescription drug companies have already said that they would be willing to put up $80 billion in rebates for prescription drugs as part of a health care reform package."

Then the president said, "Now, we may be able to get even more than that.”

...Former House Energy and Commerce chairman Bill Tauzin, R-La., now the head of Pharmaceutical Research and Manufacturers of America, or PhRMA, said his industry had committed a specific amount of money and part of the deal was Democrats would refrain from seeking more than $80 billion.

That would preclude, for instance, a campaign pledge by then-Sen. Obama to re-negotiate the cost of pharmaceuticals through the Medicare prescription drug benefit.

"$80 billion is the max, no more or less," Tauzin said to the New York Times. "Adding other stuff changes the deal.”

In addition to maybe getting more than the agreed to $80 billion, Obama said yesterday he'd like to cut the number of years a drug company can protect its drugs through patents from the current 7 20*.

in fact, one of the things I want to do is to speed up generics getting introduced to the marketplace, because right now drug companies -- (applause) -- right now drug companies are fighting so that they can keep essentially their patents on their brand-name drugs a lot longer. And if we can make those patents a little bit shorter, generics get on the market sooner, ultimately you as consumers will save money.

People think industry groups and other lobbies pay money to buy things and they do sometimes but an awful lot of money is spent by groups simply trying to avoid having the government rip them off.

Why exactly the drug makers thought they could buy Obama off for $150 million is beyond me. Sure one would have thought the deal would have lasted more than a day or two but no one could have seriously thought the Democrats would feel bound to this in a year or three or five or whenever the money started running short for ObamaCare.

Free tip for industry groups: Just because the guy says he likes you and will kill you last, doesn't mean he will.

*Based on some comments, 7 years is not the right number and it may not be all that easy for Obama to change to terms of the patents. That said, the thrust of the post still stands...PhARMA thought they had a solid deal with Obama but Obama still thinks there's room to tinker with the terms.

Below the fold...a dramatization of the Obama/Pharma relationship. Ironically, it comes from the comments courtesy of "Obama" (aka Z Ryan).

posted by DrewM. at 11:35 AM

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