Obama and Big Drugs Strike a Deal and Nobody's Happy

The Huffington Post seems to have broken a potentially huge story about the deal Obama has struck with the drug makers:

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.

And over the past several days, both the White House and PhRMA have offered a series of sometimes conflicting accounts of what happened in an attempt to walk back the story.

The White House meeting took place on July 7th, as first reported that evening in the Wall Street Journal. Also on the same day, a health care lobbyist following the talks was provided the outline of the deal by a person inside the negotiations. That outline had been floating around K Street before being obtained by the Huffington Post. In order to learn more about its origin, HuffPost agreed not to reveal the name of the lobbyist who originally received it.

"That is the PhRMA deal," said the lobbyist of the outline. He then clarified, "It was the PhRMA deal."

The thing that strikes me the most about this is the story was broken by a lefty website. You just don't expect reporting from those guys that is potentially damaging to Obama.

My hat's off, HuffPo.