Thursday, April 05, 2007

The story of the GOP's Pharma benefit bill (Medicare D) oozes out ...

Congratulations to 60 Minutes for covering a topic the GOP would love to forget ... Emphases mine.

Under The Influence, 60 Minutes' Steve Kroft Reports On Drug Lobbyists' Role in Passing Bill That Keeps Drug Prices High - CBS News

NEW YORK, April 1, 2007

... One reason those profits have exceeded Wall Street expectations is the Medicare prescription drug bill. It was passed three-and-a-half years ago, but as 60 Minutes correspondent Steve Kroft reports, its effects are still reverberating through the halls of Congress, providing a window into how the lobby works.

... It certainly wasn't ugly for the drug lobby which invested more than $10 million in campaign contributions during the last election and has been a source of lucrative employment opportunities for congressmen when they leave office.

Former senators Dennis Deconcini, D-Ariz., and Steve Symms, R-Idaho, and former congressmen like Tom Downey, D-N.Y.; Vic Fazio, D-Calif.; Bill Paxon, R-N.Y., and former House Minority Leader Robert Michel, R-Ill., all registered as lobbyists for the drug industry and worked on the prescription drug bill.

"I can tell you that when the bill passed, there were better than 1,000 pharmaceutical lobbyists working on this," says Rep. John Dingell, D-Mich.

Dingell has been in Congress for 52 years and is the new chairman of the House Energy and Commerce Committee which shares jurisdiction over Medicare. He says the bill would not have passed without the efforts of the drug lobby.

"There is probably a lotta truth in it that the bill was stacked in their benefit. And it's probably also true that it was written by their lobbyists," he says.

... Why was the drug lobby was so interested in this bill and what did it have to gain? Ron Pollack the executive director of Families USA, a nonpartisan health care watchdog group, says it all boiled down to a key provision in the legislation.

It prohibited Medicare and the federal government from using its vast purchasing power to negotiate lower prices directly from the drug companies.

... Before the vote, Congress was told the program would cost a whopping $395 billion over the first 10 years. In fact, Medicare officials already knew it was going to cost a lot more.

Burton said he and others were misled.

"Within two weeks after the bill was passed, everybody knew it was gonna cost well over $500 billion," he says. "And many members of the Congress [who] had voted for it said, 'I would never have voted for it had I known that.' "

Medicare Chief Actuary Richard Foster later told Congress that he revised the cost estimate to $534 before the vote, but was told to withhold the new numbers if he wanted to keep his job.

During a Congressional hearing, Foster stated: "It struck me there was a political basis for making that decision. I considered that inappropriate and, in fact, unethical."

Foster said the person who told him to withhold Congress from getting the revised estimates was Medicare boss Tom Scully.

Scully was the administration's lead negotiator on the prescription drug bill, and at the time was also negotiating a job for himself with a high-powered Washington law firm, where he became a lobbyist with the pharmaceutical industry.

"He was negotiating for his job at the same time that the Medicare legislation was being considered. He wound up taking this job 10 days after the president signed this legislation," says Pollack.

It is but one example of the incestuous relationship between Congress and the industry, and just one of the reasons the pharmaceutical lobby almost never loses a political battle that affects its bottom line.

Former Congressman Billy Tauzin, who helped push the prescription drug bill through the House, didn't disagree.

Has the bill been good for the drug industry?

"It's been good for the patients whom the drug industry represents …" Tauzin says. "In terms of profits — [for the drug companies] and volumes, yes."

... Why has this lobby been so successful? The former congressman says he believes it's because they stood for the right things.

If Tauzin sounds a lot like a lobbyist for the drug industry, that's because now he is.

Just a few months after the prescription drug bill passed, Tauzin began discussions with the pharmaceutical industry to become its chief lobbyist in Washington. He says it was one of several lucrative offers he's received just before he got some very bad news.

... In fairness to Tauzin and former Medicare chief Tom Scully, they weren't the only public officials involved with the prescription drug bill who later went to work for the pharmaceutical industry.

Just before the vote, Tauzin cited the people who had been most helpful in getting it passed. Among them:

John McManus, the staff director of the Ways and Means subcommittee on Health. Within a few months, he left Congress and started his own lobbying firm. Among his new clients was PhRMA, Pfizer, Eli Lilly and Merck.

Linda Fishman, from the majority side of the Finance Committee, left to become a lobbyist with the drug manufacturer Amgen.

Pat Morrisey, chief of staff of the Energy and Commerce Committee, took a job lobbying for drug companies Novartis and Hoffman-La Roche.

Jeremy Allen went to Johnson and Johnson.

Kathleen Weldon went to lobby for Biogen, a Bio-tech company.

Jim Barnette left to lobby for Hoffman-La Roche.

In all, at least 15 congressional staffers, congressmen and federal officials left to go to work for the pharmaceutical industry, whose profits were increased by several billion dollars.

... In January, one of the first things the new Democratic House of Representatives did was to make it mandatory for Medicare to negotiate lower prices with the drug companies.

A similar measure faces stiff opposition in the Senate, where the drug lobby is spending millions of dollars to defeat it. The president has already announced that if the bill passes, he will veto it.

The mainstream media did a terrible job of describing what was going on at the time, with the exception, of course, of people like Paul Krugman. Politicians who claim they were "misled" about the costs are joshing us -- they knew the price tag they were given was a cover story.

It's the usual story about how influence is bought in Washington, only on a bigger scale than most. It's partly old style corruption, and partly funding and supporting politicians that tend to agree with the buyer's position (which tends to make for fairly dumb politicians).

I believe there's some merit to pharma position, but I have little doubt that in an open and honest political discussion they'd have lost the battle. As it was, they and their shareholders (me included) won big. There was bipartisan corruption (as usual), but the GOP had control and was by far the most guilty party. Kudos to Pelosi for fighting back once the GOP fell, though I doubt the Senate will right this wrong. The Tom Scully story is truly noteworthy ...

No comments: