The Shock Doctrine

White House Assures PhRMA It Will Drop Plans to Negotiate Medicare Drug Prices

Tom Hamburger, Los Angeles Times, August 4, 2009

"As a candidate for president, Barack Obama lambasted drug companies and the influence they wielded in Washington. He even ran a television ad targeting the industry's chief lobbyist, former Louisiana congressman Billy Tauzin, and the role Tauzin played in preventing Medicare from negotiating for lower drug prices. Since the election, Tauzin has morphed into the president's partner. He has been invited to the White House half a dozen times in recent months. There, he says, he eventually secured an agreement that the administration wouldn't try to overturn the very Medicare drug policy that Obama had criticized on the campaign trail....

"In an interview, Tauzin said he carefully negotiated his agreements with the White House, offering the $80-billion discount program in return for assurances that there would be no government price-setting in Medicare Part D, the drug program for seniors. It was important, he said, to block the threat of Medicare price negotiations, which he called tantamount to price-setting and a threat to the industry. In addition, Tauzin said the industry asked the administration not to allow the import of cheaper drugs because of safety concerns....

" 'Since Obama came into office, the drug industry has received everything it wants, domestic and foreign,' said James Love, who leads an international nonprofit promoting low-cost distribution of drugs to fight the world's most devastating diseases....

"This year, for the first time in two decades, Democrats have so far picked up more of the industry's campaign cash -- 54% -- than Republicans, according to the Center for Responsive Politics."