Obama's $80 Billion Deal with Pharma Is a Very Bad Deal for Us

By William Greider, The Nation. Posted August 8, 2009.

So now we know why the president wants everyone to make nice in the healthcare debate. His White House has cut a deal with Big Pharma that smells like the same old rotten politics that candidate Obama regularly denounced and promised to end. The drug industry agrees to deliver $80 billion in future savings and the president promises the government will not use its awesome purchasing power to negotiate lower drug prices.

Wow. This is roughly the same deal that George W. Bush cut with the drug makers when he was legislating Medicare's new coverage of drug purchases. It is the same bargain that Democrats in Congress universally condemned as wasteful and corrupt. The deal does not smell any better now that a Democratic president is embracing it.

In effect, Obama wants to give away one of the principal objectives of strong reform. The details were spelled out in today's New York Times and revealed by Big Pharma's top-dog lobbyist, Billy Tauzin, a former Republican congressman who leads the industry association. Tauzin called it a "rock-solid deal," and the White House did not dispute as much. But that is not the last word.

People who believe in real healthcare reform should not be nice about this. They must rise up and rebel against our popular new president's outrageous concession. They must demand that Congress declare the private deal-making null and void. If Congress lacks the nerve to do this, then this exercise in reform begins to look more and more like previous attempts that were eviscerated by the clout of the corporate interests.

The fate of healthcare reform may depend not on the Senate or the White House but on Nancy Pelosi and the Democratic majority in the House of Representatives. What prompted Billy Tauzin to spill the beans on his deal-making with White House chief of staff Rahm Emanuel was the House measure that specifies government's right to bargain for lower prices. No, no, no! Tauzin said. We've got a deal with the president, who says that won't be allowed.

But House Speaker Nancy Pelosi simply responds that the House is not bound by any deals made with the Senate or the White House. Her caucus must back up her words. They should pass the House bill, which will allow the government to do what any major customer would do in the same circumstances -- use its leverage to demand lower prices.

If House Democrats stand their ground, then they will force a debate they can win with the American public. President Obama will have to choose between standing with the drug manufacturers or defending the original purpose of healthcare reform.

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William Greider is the author of, most recently, "Come Home, America: The Rise and Fall (and Redeeming Promise) of Our Country (Rodale Books, 2009)."

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