Obama recently made a deal with the Pharmaceutical Researchers and Manufacturers Association, PhRMA. That will come as no surprise to you. However, this story was covered by the Huffington Post and CNN. That may surprise you.

From The Huffington Post, August 13, 2009:

“Internal Memo Confirms Big Giveaways In White House Deal With Big Pharma
A memo obtained by the Huffington Post confirms that the White House and the pharmaceutical lobby secretly agreed to precisely the sort of wide-ranging deal that both parties have been denying over the past week.

The memo, which according to a knowledgeable health care lobbyist was prepared by a person directly involved in the negotiations, lists exactly what the White House gave up, and what it got in return.

It says the White House agreed to oppose any congressional efforts to use the government’s leverage to bargain for lower drug prices or import drugs from Canada — and also agreed not to pursue Medicare rebates or shift some drugs from Medicare Part B to Medicare Part D, which would cost Big Pharma billions in reduced reimbursements.

In exchange, the Pharmaceutical Researchers and Manufacturers Association (PhRMA) agreed to cut $80 billion in projected costs to taxpayers and senior citizens over ten years. Or, as the memo says: “Commitment of up to $80 billion, but not more than $80 billion.”

Representatives from both the White House and PhRMA, shown the outline, adamantly denied that it reflected reality. PhRMA senior vice president Ken Johnson said that the outline “is simply not accurate.” “This memo isn’t accurate and does not reflect the agreement with the drug companies,” said White House spokesman Reid Cherlin.

Stories in the Los Angeles Times and the New York Times last week indicated that the administration was confirming that such a deal had been made.

Critics on Capitol Hill and online responded with outrage at the reports that Obama had gone behind their backs and sold the reform movement short. Furthermore, the deal seemed to be a betrayal of several promises made by then-Sen. Obama during the presidential campaign, among them that he would use the power of government to drive down the costs of drugs to Medicare and that negotiations would be conducted in the open.”

“The deal, as outlined in the memo:

Commitment of up to $80 billion, but not more than $80 billion.
1. Agree to increase of Medicaid rebate from 15.1 – 23.1% ($34 billion)

2. Agree to get FOBs done (but no agreement on details — express disagreement on data exclusivity which both sides say

does not affect the score of the legislation.) ($9 billion)

3. Sell drugs to patients in the donut hole at 50% discount ($25 billion)
This totals $68 billion

4. Companies will be assessed a tax or fee that will score at $12 billion. There was no agreement as to how or on what

this tax/fee will be based.

Total: $80 billion

In exchange for these items, the White House agreed to:

1. Oppose importation

2. Oppose rebates in Medicare Part D

3. Oppose repeal of non-interference

4. Oppose opening Medicare Part B”

Read more:

http://www.huffingtonpost.com/2009/08/13/internal-memo-confirms-bi_n_258285.html

Here is a CNN report on this backroom deal:

“Obama:Caught Lying Again-Making Back Room Deals with Pharmaceutical Lobbyist”

[youtube=http://www.youtube.com/watch?v=nCbwde1iRLQ]

Thanks to commenter ms. helga.