Reid’s Latest Thorny Issue On Health-Care Bill: Pay-For-Delay

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December 8, 2009 8:58 a.m.
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Here’s an interesting window into the legislative sausage-making process – and a classic example, among countless others, of the way in which Senate leaders working on health-care reform are having to walk a tightrope between well-meaning policy goals and crude political imperatives.

As we reported last week, Senator Herb Kohl (D-WI) has sponsored a measure designed to crack down on “pay-for-delay” deals by pharmaceutical companies, in which the maker of a brand-name drug pays a generic to hold off on marketing its cheaper drug, thereby preserving the brand-name’s monopoly. This textbook anti-competitive tactic is hugely valuable to drug-makers, because it essentially allows them to buy more protection than their patent confers. But by keeping cheaper generic drugs off the market, it costs consumers billions — and those costs fall disproportionately on the uninsured.Kohl’s bill was voted out of the Judiciary committee, and has even picked up some Republican support. The White House, too, is said to be broadly supportive. But whether it will make it into the health-care bill currently being drawn up by Senate leadership is an open question.

And perhaps the key factor dictating against the measure’s chances of inclusion is that well-publicized deal the White House struck with the pharmaceutical industry earlier this year. In that pact, PhRMA, the industry trade group, agreed to run a multi-million dollar ad campaign backing reform, in return for various concessions in the make-up of the bill.

There’s no evidence that pay-for-delay was ever an explicit part of the agreement. But the alliance nonetheless leaves Harry Reid and Co. with an awkward choice — one of many such awkward choices that leadership has had to weigh lately: It can leave pay-for-delay out, and kiss goodbye a chance to save billions for struggling Americans while cracking down on corporate greed. Or it can put it in, and risk alienating an industry whose unexpected support for reform could be instrumental in getting a final bill passed.

Kohl told TPM yesterday that things are still up in the air. “It’s not resolved,” he said. “I don’t know what’s going to happen, so I have no answers.”

But if pay-for-delay doesn’t make it, it may just have been an unheralded casualty of the administration’s decision, for better or worse, to play ball with the pharmaceutical industry.

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