What? President Obama going back on his word to someone after he got what he needed from them? I'm shocked!
Drug Industry: President Reneges on Health-Reform Deal - FoxBusiness.com
Drug industry sources tell FOX Business the Administration is backtracking on what is called the “PhRMA deal” in health reform, a deal that was struck behind closed doors in late 2009 and early 2010 in order to get the industry to support and endorse health-care reform.
In the “PhRMA” deal, drug companies would fork over $80 billion in fees as well as give drug discounts to seniors in Medicare over 10 years, among other things (The CBO has reported that those fees may be passed along to customers, anyway, in the form of higher drug prices. (See EMac's Bottom Line, "CBO Says Health Reform Causes Drug Costs to Rise")
In exchange, the White House agreed, among other items, to not force the drug industry to accept rebates on drugs sold through Medicare Part D, a program launched under President George W. Bush to subsidize prescription drugs for seniors.
But President Barack Obama's new deficit push calls for those Medicare rebates, via the Simpson-Bowles plan.The GAO also found that prescription drug costs continue to rise faster than overall health-care inflation.
To try and stop that, the White House wrangled up to 50% discounts on drugs to seniors in what's called the Medicare part D donut hole, a Medicare anomaly where seniors lose coverage. Along with those discounts, the White House got the industry to fork over a total of $80 billion in fees and other price cuts as well.
In exchange, the industry says the White House agreed to not pursue rebates on drugs in Medicare Part D.
The industry also says the White House agreed to not use Medicare’s “purchasing power,” meaning its colossal leverage to haggle with drug makers in various ways to get cheaper drugs.
The drug industry added that the Administration said it would oppose future Congressional efforts to re-import cheaper generics or other drugs from foreign countries like Canada.
And the industry says the White House agreed to block Congressional efforts to repeal Medicare’s “non-interference” law, which prohibits the government from interfering in the price negotiations between drug companies and commercial insurers who provide the Medicare Part D drug benefit, among other things.“PhRMA got an $80 billion deal, and in return for which they ran $150 million worth of ads in favor of health reform,” Republican Senator and former presidential candidate John McCain said at a meeting with the President in February 2010.The White House did not return calls for comment.