The Treatment

House to PhRMA: No Deal

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Among the other important distinctions between the new House bill and what the Senate Finance Committee produced is the treatment of the pharmaceutical industry.

The Senate Finance bill was true to the deal the Pharmaceutical Manufacturers of America struck with the White House and Senate Finance Chairman Max Baucus, as first revealed by the New York Times and Huffington Post. PhRMA vowed to endorse reform and advertise on its behalf. Baucus and the administration, in turn, promised not to extract more than about $80 billion in savings from changes that would affect pharmaceutical makers.

It was nothing short of a shakedown. The sacrifice of $80 billion was nothing to the drug industry, particularly since, by any reasonable accounting, it wasn't even a sacrifice. It was merely accepting less revenue on new purchases of drugs--and, most likely, worth less than $80 billion anyway.

The House, though, was not party to this deal. And so it's decided to ask a little more--about twice as much, in fact. My understanding (pending confirmation as I wade through the text) is that it comes by extending more rebates to Medicare recipients. This is something PhRMA strongly opposes.

Will the House prevail? The rationale behind making the deal was that PhRMA wielded too much clout to overcome. And that may be still be the case.

On the other hand, we haven't heard the last out of the Senate yet, either. As Ryan Grim reports, Senators Sherrod Brown of Ohio and Sheldon Whitehouse of Rhode Island are leading an effort to extract more concessions from PhRMA in the final Senate package.

By the way, if you haven't picked up on this already, Brown and Whitehouse--both of whom sit on the Health, Education, Labor, and Pensions (HELP) Committee--have been real heroes in the health reform debate. If you're a liberal and you want to know which members have judgment you can trust, you could do a lot worse than those two.

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