Deal of Fortune

From the pages of Politico ...

Pharma tries to protect its deal
By: Chris Frates

As Democrats scramble to finish drafting health reform legislation, drug lobbyists are working overtime to ensure that the final bill doesn’t bust the $90 billion deal they have with the White House and Senate Democratic leaders.

For the past few days, drug industry lobbyists have huddled with Democratic staffers to work out how to structure the fees drug makers will pay under reform while still making good on Democrats’ promise to close the gap in seniors’ drug coverage. Last winter, the industry pledged $10 billion to help close the coverage gap in addition to the $80 billion deal it had struck earlier in the year.

Drug makers were asked to sign off on multiple solutions, giving Democrats backup options should any of the fixes run into problems passing muster with the Senate parliamentarian, who, because of procedural rules, essentially has the final say over what’s included in the legislative package.

With billions of dollars hanging in the balance, there was “real heartburn with the bill over the weekend and over the last week,” an industry source said.

The industry also decided to drop its push to be carved out from an independent Medicare payment advisory board – vowing instead to fight it if it becomes law, sources said. The board would essentially force cost cutting measures on lawmakers, limiting the influence of outside groups like PhRMA to lobby the outcome.

With all the drama of reform coming down to the wire, the players’ nerves are rubbed raw, said one insider. Still, the industry expects its deal to hold.

Democratic are racing to finish a reconciliation bill that could pass the House this week and win Senate approval before Congress breaks for the Easter recess at the end of the month. Democrats are crafting the bill so it only needs 51 votes to pass, bypassing the Republicans’ filibuster threat.

But Republicans pounced on the wheeling and dealing as another symptom of what’s wrong with reform.

“All we hear about is the arm-twisting and the horse-trading that’s going on over there behind the scenes – the mad dash ahead of the big vote. And once again, Americans can’t believe what they’re hearing,” Senate Republican Leader Mitch McConnell said Monday on the chamber floor. “The drug lobbyists were here in the Capitol over the weekend huddling with Democrat staffers to make sure their interests would be protected in the final bill. This is precisely the kind of thing Americans rebelled against after the last vote on this bill.”

Also Monday, senior pharmaceutical industry sources denied a New York Times report that the industry has invested $12 million in new, pro-reform advertising. PhRMA has not signed off on a new ad campaign, no ad copy has been approved, nothing has been done, said the sources, who are intimately familiar with the situation.

"I cannot say this more emphatically, it's not true," said one source, who is not authorized to speak publicly.

In fact, the White House has been leaning on the industry to buy positive ads to provide air cover to wavering House members, whose districts have been inundated with opposition advertising. But the drug makers are holding out until they see, and sign off on, the final reconciliation bill, industry sources said.

As a key White House ally, the drug industry has been the money behind much of the pro-reform advertising this past year. Drug makers' decision to hold out could mean there will be little in the way of pre-vote cover. But, if the industry supports the final bill, it's almost guaranteed a post-vote blitz of thank you ads praising lawmakers who voted yes will air and they will likely see support through Election Day.