Big Pharma Wins Big in Health Care Reform

The Republicans look a sour lot this morning, but the pharmaceutical industry, which helps foot the campaign bills of a sizeable chunk of members of both parties, is delighted with the legislation, and with its Democratic friends in the White House and on the Hill.

Members of Congress in both parties generally have lined up behind the insurance and pharmaceutical industries from the get go. So it should come as no surprise that the Democrats, who long ago gave up any pretence of opposing corporate power, found a way to accomodate the pharmaceutical companies on the way to its tepid reform. To a large extent, the “debate” over health care was a show debate, an extended round of Washington smoke and mirrors. The administration early on cuts its deal with Big Pharma, and pretty much stuck to it throughout the process.

In fact, the Dems actually made the drugsters look good, celebrating the industry’s generous “concessions” and “discounts” while ensuring that no real threat to Big Pharma’s profits would make their way into the final bill.

The industry’s  main goal from the very beginning has been to fend off any government power to negotiate or seriously regulate drug prices–and this they did. 

Big Pharma’s second big win was to prevent any measure that would have opened the way for American consumers to buy less expensive drugs abroad, especially from Canada.

At the same time, the supposed give-backs by the drug industry are projected to more than pay for themselves. The much-lauded discounts on brand name drugs for seniors in the Medicare prescription drug program, for example, are good for Big Pharma because they discourage oldsters from switching to generics.

And more insured people simply mean more money coming into the coffers, for Big Pharma as well as for the insurance industry.

Confirmation of the industry analysis came early in the day from the stock market, where drug stocks initially remained level; there certainly was no rush to dump shares, which is what would be expected if the bill actually represented any threat to profits. And by 1 p, EST, CNN Money was reporting a rally in health care stocks.

“I was unable to find anything in there that would cause me to have anxiety if I were a shareholder in a pharmaceutical company,” Ira Loss, a senior health-care analyst at the research firm Washington Analysis, told Dow Jones. According  to the ticker story:

Billy Tauzin, who led the industry’s negotiations on health care with lawmakers, said overall drug makers fare well. “While we’re not totally happy,” Tauzin began, “we generally feel like it tracks with our principles.”

Sanofi-Aventis SA (SNY) Chief Executive Christopher Viehbacher said in an interview that the impact of the legislation will be neutral to slightly negative “but better for the industry than if healthcare reform didn’t pass.”

Tauzin, head of the Pharmaceutical Research and Manufacturers of America or PhRMA, and Viehbacher said getting protection for brand-name biologics is among the important provisions for the industry. Drug makers pushed hard to get 12 years of exclusive market protection while the White House and some lawmakers wanted to lower the protection to seven years.

Despite fees and rebates imposed by the legislation, “analysts say drug makers will end up recouping those costs through new customers: The bill would provide insurance coverage to an additional 32 million Americans.” The Dow Jones story continues:

Chalk up another good round for Pharma and Biotech in health care reform,” began a note to clients Friday from Concept Capital, a research firm.Ken Tsuboi, co-manager of the Allianz RCM Wellness Fund, sees the impact of bill, and its $90 billion in concessions over 10 years, as relatively minor in an industry that has annual global sales of about $750 billion, with about $300 billion in the U.S., and margins close to 30%.”I think that it is actually a pretty good deal for Pharma,” Tsuboi said.

The GOP, which purports to be the party of big business, ought to be applauding at least these portions of the health care reform–and perhaps when the cameras go away, some of them will quit bitching and count their blessings.  As for the obnoxious Tea Party gang, if they start threatening the real power in this country, which is vested in corporations, they may well find themselves whipped and isolated.

7 responses to “Big Pharma Wins Big in Health Care Reform

  1. I hope you dont mind if I repost this, if I credit you??

  2. James Ridgeway and Jean Casella

    Go right ahead–but please credit Unsilent Generation with a link to the blog at the top.

  3. Thanks, i will!

  4. I am no fan of Big Pharma nor of the hospital industry, but I’m pretty sure that no healthcare reform that cut the legs out from under more than one major industry at a time would stand a ghost of a chance of passing in this jobless recession. The time to take on big employers like the hospital industry is when jobs abound. The time to take on the pharmaceutical industry is when the economy is strong again. Timing is everything; their time for reform will come.

  5. HOw is it that every industrialized country in the world has done it except us, then? 45,00 a yr will die watiing for 2014 and more will die on medicaid after–i say we put all member of Congress on Medicaid.

  6. Dear Jim,

    Just came across a republication of your current blog on Marxmail. What does it cost to subscribe? Perhaps you remember me, the founding publisher-editor of The Los Angeles Free Press, 1964 to 2010. I like your title, “Unsilent Generation.”

    Check out my website and a free download of a cover story magazine interview with me that you can have for free by clicking http://www.immortality-is-possible.com. It sounds fantastic but after 30 years of research into laboratory alchemy I believe I may have found a practical way of incredible life extension that has strong scientific footing. Check it out. I would like you to be around for a long time. I have hit 82 myself and I seem to be more energized and healthy than ever. Best wishes. Art Kunkin

  7. Nance, so you believe corporations should have the power to control the laws, but the majority of the people do not? Your defense of Big Pharma is well spoken, then. Democracy doesn’t seem to matter much if Big Pharma decides whether or not we get health care. There’s no such thing as “good timing” when you’re pitting the needs of the people against the profits of corporations. They will always say never. We should let public policy be determined by more than simple blind faith in the benevolence in CEOs, Wall Street, and bankers. They’ve been laughing all the way to the bank ever since people voted for a mainstream politician and expected “change.” Times are changing and the realities of life in this collapsed economy demand politics that change to meet the needs of us working people. The Tea Baggers taught us a brilliant lesson: if you mobilize for your demands, you can change the debate. The Prop 8 struggle taught us another lesson: if you don’t fight, you won’t win. It’s time to make our demands heard, or else democracy is irrelevant and we all might as well just shut up. And it’s time to fight. The Democrats won’t, don’t, can’t fight for us. We have to fight for ourselves and each other. There is no alternative and there are no shortcuts.

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