What Did The White House Promise PhRMA?

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The White House denies it on the record, and PhRMA denies it on the record, but below, via Ryan Grim, is an outline of the deal drug manufacturers supposedly struck with the Obama administration early last month.

Commitment of up to $80 billion, but not more than $80 billion.

1. Agree to increase of Medicaid rebate from 15.1 – 23.1% ($34 billion)

2. Agree to get [follow on biologics] done (but no agreement on details — express disagreement on data exclusivity which both sides say does not affect the score of the legislation.) ($9 billion)

3. Sell drugs to patients in the donut hole at 50% discount ($25 billion)

This totals $68 billion

4. Companies will be assessed a tax or fee that will score at $12 billion. There was no agreement as to how or on what this tax/fee will be based.

Total: $80 billion

In exchange for these items, the White House agreed to:

1. Oppose importation

2. Oppose rebates in Medicare Part D

3. Oppose repeal of non-interference

4. Oppose opening Medicare Part B

Much more, here. In essence, the administration agreed to stand with PhRMA in opposing a series of measures that would have eaten into drug manufacturers’ profits in exchange for PhRMA agreeing to a separate series of provisions which would have freed up $80 billion in funds for the government to put toward a health care overhaul. PhRMA head Billy Tauzin came forward last week, alleging that the White House had committed to the $80 billion concessions as a ceiling. The revelation that sent tempers flaring among congressional health care leaders, who were closed out of negotiations and, therefore, weren’t privy to the details of the agreement. The White House ultimately said PhRMA never received a guarantee, putting administration officials in the uncomfortable position of publicly disavowing Tauzin’s claims while hoping to retain his support at the same time.

Earlier today, a PhRMA-led coalition kicked off a $12 million ad campaign, targeting fence-sitting Democrats, in support of health care reform legislation.

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