Tuesday, August 18, 2009

Boehner to PhRMA: Stop Being Sheep

Last week HuffPo had an internal memo dated July 7, outlining details of the White House deal with PhRMA on health care reform:

Both the White House and PhRMA have issued denials that the memo above represented an accurate reflection of a deal between the two. The Wall Street Journal notes today, 3 of 4 major points deal have been confirmed by one party or the other. WSJ links a memo dated July 8 sent by Barclay Capital Advisors of NY, confirming the same details. The memo to investors is summarized as follows:
We understand from our consultants in Washington that yesterday PhRMA has struck a deal with the White House which is similar to the senate version. This deal underscores that the Obama Administration is open to negotiations/deals with stakeholders involved in order to steer the healthcare reform bill with
bipartisan support and within the aggressive timeframe set. It also reinforces our view that healthcare reforms may not be as bad as previously expected by many investors.
The managing director for Barclays Capital confirms the memo's importance saying:
“It all holds together,” Butler said, detailing why industry wants to avoid the issues listed on the memo, one of which is an “expensive Pandora’s box.” He said he has been told Sen. Max Baucus, chairman of the Finance Committee, is on board with the memo contents.

Butler said the deal outlined in the memo provides more evidence that “the probability of health care reform significantly hurting the drug industry is diminishing each day.”

Former Republican Congressman Billy Tauzin, Chief Lobbyist for PhRMA is currently underwriting an expensive advertising campaign touting the benefits of health care legislation. Tauzin has also been to the White House on numerous occasions and has been a key figure in negotiations that Tauzin believes beneficial to the pharmaceutical industrymay or may not end up being "as bad as previously expected." John Boehner, clearly sees Tauzin being bullied by the Obama administration and sent the following letter as warning: (link to Huffington Post)

Dear Billy,

Appeasement rarely works as a conflict resolution strategy. This is as true in the arena of policymaking as it is in schoolyards across America. When a bully asks for your lunch money, you may have no choice but to fork it over. But cutting a deal with the bully is a different story, particularly if the "deal" means helping him steal others' money as the price of protecting your own.

The simple truth is, two wrongs don't make a right. And the short-sighted health care deal PhRMA struck with the Obama Administration at your urging provides confirmation of this time-tested maxim on an epic and tragic scale.

The "bully" in this case is Big Government. At your behest, PhRMA has chosen to accommodate a Washington takeover of health care at the expense of the American people in hopes of securing favorable treatment and future profits. It's a short-sighted bargain that leaves your own customers and employees behind. And it now has all the markings of a deal gone sour.

The Obama Administration tacitly acknowledged last week that the President will not be bound by the $80 billion limit PhRMA and its board of directors were led to believe had been secured in exchange for your organization's support of the Administration's health care takeover, and key Democrats in Congress, including Speaker Nancy Pelosi (D-CA) and Energy & Commerce Committee Chairman Henry Waxman (D-CA), have said explicitly they will not honor the agreement. In other words, now that the deal is publicly known and would be messy for you to reverse, Big Government is changing the terms. . .because it can. Consequently, the jobs of PhRMA workers are no more secure than they were before, the threat to PhRMA's groundbreaking medical research remains, and the American people - including PhRMA's customers and the families of PhRMA employees - face the prospect of higher costs and reduced quality in health care.

You will inevitably object to this letter and quarrel with its premise. You'll no doubt argue PhRMA has publicly opposed the version of the bill backed by Speaker Nancy Pelosi (D-CA). But the simple press release your organization issued objecting to the House bill is dwarfed by the $150 million advertising campaign your organization has launched in support of ObamaCare with the assistance of well-funded political organizations on the Left.

PhRMA would do well to halt this short-sighted, misguided campaign and listen to the American people, rather than continue to collaborate on an effort to spin them.

Republicans across the nation have listened, and here's what we've learned: Americans are frustrated with their government in Washington and skeptical of those who run it. They want health care reform that lowers costs and increases choice - not government-run health care that increases costs and limits options. They want legislation that helps families and small businesses with their problems, not legislation that adds to their problems while empowering an elite few. They're worried about the debt being piled on our children and grandchildren, and they want the spending and borrowing spree in Washington to stop. They want policies that support job creation and protect freedom, not bills that force responsible citizens to subsidize bad behavior from those who insist on being irresponsible.

The millions of American families who are PhRMA customers and the hard-working professionals who work for PhRMA companies deserve better than the government takeover of health care being forced upon them. I urge you to rethink your organization's stance, listen to the American people, and join the call for responsible bipartisan health care solutions that truly reflect their priorities.


John Boehner

Keith Hennessey has sent similar warnings as well:
Even after 15 years of working in economic policymaking, I continue to be surprised at the naivete of some American business leaders. Almost three weeks ago I sounded an initial warning:

Hospitals: You’re the deep pockets. Insurers, Business and Pharma: They can make you villains again if they need to cut you more to make the budget numbers work.

Anyone who thinks they have a deal should be careful. If these bills implode, all bets are off, and the probability escalates that prior promises are re-opened or ignored. (Hospitals: You’re the deep pockets. Insurers, Business and Pharma: They can make you villains again if they need to cut you more to make the budget numbers work.)

Words to the wise!

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