Obama’s Backroom Deal With Drug Companies

Drugmakers led by Pfizer (PFE) Inc. agreed to run a “very significant public campaign” bankrolling political support for the 2010 health-care law, including TV ads, while the Obama administration promised to block provisions opposed by drugmakers, documents released by Republicans show.

The internal memos and e-mails for the first time unveil the industry’s plan to finance positive TV ads and supportive groups, along with providing $80 billion in discounts and taxes that were included in the law. The administration has previously denied the existence of a deal involving political support.

The documents were released today by Republicans on the House Energy and Commerce Committee. They identify price controls under Medicare and drug importation as the key industry concerns, and show that former Pfizer Chief Executive Officer Jeffrey Kindler and his top aides were involved in drawing it up and getting support from other company executives.

“As part of our agreement, PhRMA needs to undertake a very significant public campaign in order to support policies of mutual interest to the industry and the Administration,” according to a July 14, 2009, memo from the Pharmaceutical Research and Manufacturers of America. “We have included a significant amount for advertising to express appreciation for lawmakers’ positions on health care reform issues.”

The goal, the memo said, was to “create momentum for consensus health care reform, help it pass, and then acknowledge those senators and representatives who were instrumental in making it happen and who must remain vigilant during implementation.”

Republican View

Republicans, including Representative Joe Pitts, of Pennsylvania, have been probing promises made during the March 2010 passage of the health law, with some arguing that political activity by the drugmakers in any agreement may cross an ethical line.

“After promising transparency, the White House turned around and cut a secret deal with pharmaceutical companies,” Pitts said today in a statement. “Today’s revelation about the $80 billion deal shows an administration that cared more about victory than reform.”

White House spokesman Eric Schultz called the Republican probe “a nakedly political taxpayer-funded crusade to hurt the president’s re-election campaign.”

The committee has wasted time on investigations “but has done almost nothing to move legislation that would create jobs or grow the economy,” Schultz said today in an e-mail.

Committee Investigation

The Republican probe began last year. Bloomberg reported earlier this month that the committee was targeting whether Democrats were promised political support from drugmakers in exchange for limiting what the industry would be asked to contribute under the 2010 health-care overhaul, according to people familiar with the talks who asked not to be identified because they were private.

“PhRMA has a long history of advocating for policies that ensure patient access to innovative medicines and foster medical progress,” said Matt Bennett, a PhRMA spokesman, in an e-mailed statement. “Before, during and since the health-care reform debate, PhRMA engaged with Congress and the administration to advance these priorities.” Bennett declined further comment.

The Supreme Court is considering a challenge to the law and is expected to rule in June.

Obama’s fellow Democrats who backed the health-care law’s passage in 2010 pushed back against Republicans and said today that the documents released by the Republicans were misleading.

Read More at Bloomberg