From today's edition of the Wall Street Journal:
However the Senate's health-care debate pans out, we'll wager this prediction: The pharmaceutical executives who have endorsed this exercise will eventually be exposed as among the most shortsighted CEOs in the history of capitalism.
In June, the Pharmaceutical Research and Manufacturers of America sealed a deal with the White House and Senate Finance Chairman Max Baucus promising to contribute $80 billion in lower drug costs over the next decade to ObamaCare, plus a multimillion-dollar TV ad campaign. In return they were to be spared from price controls and the reimportation of cheaper foreign drugs.
The loophole is that the deal didn't include the House, and now it may fall apart in the Senate. But even if it does somehow survive, by now it is obvious that the industry's political protection will last only as long as it takes to pass a bill, whereupon the same politicians who are trying to override this deal will get back to work.
"You've heard that as a consequence of our efforts at reform, the pharmaceutical industry has already said they're willing to put $80 billion on the table," President Obama said in July. "We might be able to get $100 billion out or more."
Led by Henry Waxman, the House saw that and raised: The bill that passed earlier this month extracts as much as $150 billion from the industry, including demands for a 23.1% "discount" when Medicare buys prescription drugs for some seniors (much like Medicaid imposes now) and gives the government the power to "negotiate" lower prices for everyone.
The pharma lobby was unfazed. "Despite the shortcomings in the House legislation, we remain completely committed to helping the President and Congress pass comprehensive health care reform this year," a senior vice president said in a statement. "This is a three-act play and a good critic doesn't write a review after the opening scenes."
But now the curtain is coming down. The Senate bill is only going to grow more expensive on the floor. Given that Harry Reid is even relying on a 5% "botax" on cosmetic surgery, the drug makers will become ever more appealing targets as the search for revenue to make ObamaCare appear to be deficit neutral grows more desperate.
Meanwhile, the AARP and its media stenographers are levelling allegations that drug makers are already jacking up prices for brand-name prescriptions. John McCain and Olympia Snowe are cosponsoring a bill with Byron Dorgan that would allow pharmacies and wholesalers to import medications from Canada and Europe.
So how has the industry responded? More or less as Lenin predicted. Big Pharma is now running ads against Joe Lieberman, saying his threat to torpedo the Senate bill could cause drug prices to rise by 20%. It is also funding a campaign that targets the fence-sitters Ben Nelson, Mary Landrieu and Blanche Lincoln.
In other words, the industry is trashing the very Senators who stand the best chance to rescue it from government control. Instead, the drug CEOs are making themselves complicit with the Washington mentality of seeing only the costs of medications, not benefits like longer lives or fewer hospitalizations. They are ensuring that they will always be a political target and making the extortion easier in the bargain.
The shame is that there be will fewer resources for the research and development that drives innovation, particularly for the smaller biotech companies that are the future of cutting-edge medicine. When it takes about a decade and a billion dollars to bring a new drug to market, a CEO of a smaller drug company told us recently, most firms are "living on the edge of extinction."
But it is the biggest players who are engaged in political gamesmanship. At a speech in February at the Economic Club of Chicago, Pfizer CEO Jeffrey Kindler laid out what he called his company's "new approach to legislation and public policy." Rehearsing the health industry's role in stopping HillaryCare in 1994, he announced that the difference this time is that pharma will be "actively supporting appropriate reforms, rather than simply trying to stop things we don't agree with."
Mr. Kindler, a lawyer and former McDonald's executive, went on to endorse even such political inspirations as comparative effectiveness research, which while fine in theory will inevitably be used to "prove" that more expensive medications aren't worth the costs to government when ObamaCare's spending detonates. In England, these kinds of studies were used to try to ban Pfizer's Stutent, a treatment for kidney cancer. The Senate bill contains a Medicare commission with a mandate to go after drugs, though only about 10 cents of every U.S. health dollar goes toward prescriptions.
The irony is that if business began to educate the public about what the current bills will mean for U.S. health care, it might be able to defeat them and force a more modest, sensible reform. National Journal's composite of all health polling finds that 50.9% of the public now opposes health reform in general, up from about 15% in February. Only 43.9% are in favor. The most recent polls put support even lower: Just 35% from Quinnipiac, 38% from Rasmussen.
A Washington Post-ABC poll found that 52% of the public believes ObamaCare will increase their personal health costs and that 37% expect their quality of care will deteriorate. They're right. A survey of registered voters by Public Opinion Strategies found that the more people hear about the plan, the less they like it, and that voter hostility is higher now than it ever was for HillaryCare.
Yet now this son of HillaryCare is headed toward passage, and when shareholders start griping about lousy returns, Mr. Kindler and his fellow executives will be long gone. It's one more reminder that when it comes to protecting economic freedom, you can never trust big business. The biggest losers will be patients, who lack the millions to lobby Congress and in the future will have fewer innovative medicines.
Big Pharma Sells Out
However the Senate's health-care debate pans out, we'll wager this prediction: The pharmaceutical executives who have endorsed this exercise will eventually be exposed as among the most shortsighted CEOs in the history of capitalism.
In June, the Pharmaceutical Research and Manufacturers of America sealed a deal with the White House and Senate Finance Chairman Max Baucus promising to contribute $80 billion in lower drug costs over the next decade to ObamaCare, plus a multimillion-dollar TV ad campaign. In return they were to be spared from price controls and the reimportation of cheaper foreign drugs.
The loophole is that the deal didn't include the House, and now it may fall apart in the Senate. But even if it does somehow survive, by now it is obvious that the industry's political protection will last only as long as it takes to pass a bill, whereupon the same politicians who are trying to override this deal will get back to work.
"You've heard that as a consequence of our efforts at reform, the pharmaceutical industry has already said they're willing to put $80 billion on the table," President Obama said in July. "We might be able to get $100 billion out or more."
Led by Henry Waxman, the House saw that and raised: The bill that passed earlier this month extracts as much as $150 billion from the industry, including demands for a 23.1% "discount" when Medicare buys prescription drugs for some seniors (much like Medicaid imposes now) and gives the government the power to "negotiate" lower prices for everyone.
The pharma lobby was unfazed. "Despite the shortcomings in the House legislation, we remain completely committed to helping the President and Congress pass comprehensive health care reform this year," a senior vice president said in a statement. "This is a three-act play and a good critic doesn't write a review after the opening scenes."
But now the curtain is coming down. The Senate bill is only going to grow more expensive on the floor. Given that Harry Reid is even relying on a 5% "botax" on cosmetic surgery, the drug makers will become ever more appealing targets as the search for revenue to make ObamaCare appear to be deficit neutral grows more desperate.
Meanwhile, the AARP and its media stenographers are levelling allegations that drug makers are already jacking up prices for brand-name prescriptions. John McCain and Olympia Snowe are cosponsoring a bill with Byron Dorgan that would allow pharmacies and wholesalers to import medications from Canada and Europe.
So how has the industry responded? More or less as Lenin predicted. Big Pharma is now running ads against Joe Lieberman, saying his threat to torpedo the Senate bill could cause drug prices to rise by 20%. It is also funding a campaign that targets the fence-sitters Ben Nelson, Mary Landrieu and Blanche Lincoln.
In other words, the industry is trashing the very Senators who stand the best chance to rescue it from government control. Instead, the drug CEOs are making themselves complicit with the Washington mentality of seeing only the costs of medications, not benefits like longer lives or fewer hospitalizations. They are ensuring that they will always be a political target and making the extortion easier in the bargain.
The shame is that there be will fewer resources for the research and development that drives innovation, particularly for the smaller biotech companies that are the future of cutting-edge medicine. When it takes about a decade and a billion dollars to bring a new drug to market, a CEO of a smaller drug company told us recently, most firms are "living on the edge of extinction."
But it is the biggest players who are engaged in political gamesmanship. At a speech in February at the Economic Club of Chicago, Pfizer CEO Jeffrey Kindler laid out what he called his company's "new approach to legislation and public policy." Rehearsing the health industry's role in stopping HillaryCare in 1994, he announced that the difference this time is that pharma will be "actively supporting appropriate reforms, rather than simply trying to stop things we don't agree with."
Mr. Kindler, a lawyer and former McDonald's executive, went on to endorse even such political inspirations as comparative effectiveness research, which while fine in theory will inevitably be used to "prove" that more expensive medications aren't worth the costs to government when ObamaCare's spending detonates. In England, these kinds of studies were used to try to ban Pfizer's Stutent, a treatment for kidney cancer. The Senate bill contains a Medicare commission with a mandate to go after drugs, though only about 10 cents of every U.S. health dollar goes toward prescriptions.
The irony is that if business began to educate the public about what the current bills will mean for U.S. health care, it might be able to defeat them and force a more modest, sensible reform. National Journal's composite of all health polling finds that 50.9% of the public now opposes health reform in general, up from about 15% in February. Only 43.9% are in favor. The most recent polls put support even lower: Just 35% from Quinnipiac, 38% from Rasmussen.
A Washington Post-ABC poll found that 52% of the public believes ObamaCare will increase their personal health costs and that 37% expect their quality of care will deteriorate. They're right. A survey of registered voters by Public Opinion Strategies found that the more people hear about the plan, the less they like it, and that voter hostility is higher now than it ever was for HillaryCare.
Yet now this son of HillaryCare is headed toward passage, and when shareholders start griping about lousy returns, Mr. Kindler and his fellow executives will be long gone. It's one more reminder that when it comes to protecting economic freedom, you can never trust big business. The biggest losers will be patients, who lack the millions to lobby Congress and in the future will have fewer innovative medicines.
