Democrats and Big Pharma: Hypocrisy You Can Believe In?

HillaryClintonExplainingWhat a difference six years makes. In August 2009, the Obama White House was busy negotiating closed-door deals with special interests to get them to support Obamacare. Former Rep. Billy Tauzin (D-LA), then head of the pharmaceutical manufacturers’ trade lobby, bragged to the New York Times: “We were assured [by the administration] ‘We need somebody to come in first. If you come in first, you will have a rock-solid deal.’”

The contrast presents one of two possibilities: Either Clinton, like Obama, will renege on her campaign promises while in office and leave Big Pharma alone—or, rather than showing preference to special interests, will instead use government to squeeze their businesses.

Compare the backroom dealings between Big Pharma and the Obama administration with developments yesterday. A tweet by former Senator Hillary Clinton decried “price gouging” by manufacturers and pledged that the plan she will release today will stop “outrageous” pricing, causing pharmaceutical stock prices to tumble. The contrast presents one of two possibilities: Either Clinton, like Obama, will renege on her campaign promises while in office and leave Big Pharma alone—or, rather than showing preference to special interests, will instead use government to squeeze their businesses.

Price Controls and Government “Negotiation”

Clinton has yet to release details of her proposals on drug costs, but the media is already reporting that her plan will likely contain elements of a policy paper released yesterday by the Center for American Progress (CAP). The CAP plan includes sections on increasing transparency of pharmaceutical research and development (R&D) spending and expanding research into the comparative effectiveness of various treatment options.

Those proposals might sound simple enough, but they come with big catches. As is usually the case, liberals propose transparency not for its own sake, but as a cudgel with which to bully private enterprise. In this case, CAP proposes price controls: “If drug companies do not invest a minimum amount of money in R&D, require them to pay a refund to the National Institutes of Health.” Likewise, the paper suggests that drug companies should charge “reasonable rates,” as determined by outside “experts”; if prices fall “outside the recommended range, require public justifications and license patents that result from federally funded research to competitors.”

In short, the CAP plan—likely to resemble the Clinton plan—would:

Force drug companies to turn over proprietary material about the R&D costs associated with specific drugs; Subject that R&D spending to government-established price controls;

Establish a board of technocrats—ostensibly independent, but likely to be influenced by both government and lobbyists—to set “recommended” prices; and

If manufacturers do not comply with the “recommended” price levels, subject those products to additional “public justifications”—read: opportunities for political posturing and demagoguery—and/or remove the patent exclusivity for those products, and allow other companies to manufacture generic versions.

As noted above, transparency alone brings with it numerous benefits to consumers. Health care markets have a notoriously opaque reputation. More independent research on what treatments work best will put more knowledge and power in the hands of patients.

But Consumer Reports-style research is one thing and price controls another. Creating an environment where a technocratic entity—one similar to Obamacare’s Independent Payment Advisory Board (IPAB)—can determine the prices for an entire industry consolidates a troubling amount of power in one place. Moreover, precision medicine will likely make medical treatments much more personalized to each specific patient’s genome; creating a centralized price-setting body runs contrary to the progress medicinal science is making. The greater specificity of treatment patients are offered, the less conducive these practices will become to a uniform bureaucratic standard of cost.

Obamacare Process Not Transparent

The CAP paper’s focus on drugmakers’ transparency carries with it a particular irony. In 2008, then-Senator Obama pledged that “we’ll have the [health care] negotiations televised on C-SPAN, so that people can see who is making arguments on behalf of their constituents, and who are making arguments on behalf of the drug companies or the insurance companies.” Of course, that promised transparency never materialized—and Big Pharma benefited immensely from those closed-door negotiations.

Yesterday, Senator Clinton said that she was “so proud to be part of the Obama administration” when the president signed Obamacare into law. But a cabinet member of an administration that threw away many of its promises to help a special interest group has little right to come back and complain about the resulting privileges of that group. And likewise, members of Big Pharma outraged about the Clinton proposals should remember that conservatives warned them about the implications of their Faustian bargain at the time they made it. Therefore, given the history of this administration, both Hillary Clinton and the pharmaceutical industry would be wise to keep their own self-righteousness on this issue in check—for neither one comes to this debate with clean hands. (For more from the author of “Democrats and Big Pharma: Hypocrisy You Can Believe In?” please click HERE)

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