ObamaCare’s ‘Sweetheart Deal’ for PhRMA
The New Republic’s Jonathan Cohn reports that back in March, IMS Health projected slightly negative revenue growth for the pharmaceutical industry but recently changed that projection to 3.5-percent annual growth from 2008 through 2013.
“What changed?” Cohn asks. “A major factor, according to IMS, was the emerging details of health care reform . . . Put it all together, and you have more demand for name-brand drugs . . . enough to boost revenue significantly.” And:
“If this bill is implemented,” the report concludes on page 138, “an increase in prices on new drugs can be expected.”
How could this be happening? Oh yeah:
That brings us back to the deal that the Pharmaceutical Researchers and Manufacturers of America, which represents those companies, made with the White House and Senate Finance Committee . . .
The industry agreed to embrace health care reform and, later on, launched a massive advertising campaign to promote the cause. In exchange, the White House and Senate Finance–which had been asking various industries to pledge concessions that would help pay for the cost of coverage expansions–promised not to seek more than $80 in reduced payments to drug makers.
To an industry as big and profitable as the drug makers, giving up $80 billion over ten years wouldn’t seem like much of a sacrifice–a point critics started making right away. But if IMS is right, the drug industry wouldn’t even be giving up $80 billion, in any meaningful sense of the term. If anything, it’d be making more money. Maybe quite a lot of it.
Which is what I predicted, both here and here.
Cohn concludes, “the drug industry has enormous leverage in Congress.” But Cohn still supports the president’s health care takeover. Or is it PhRMA’s health care takeover?
Filed under: General; Health, Welfare & Entitlements
Panic Starting to Set in Among Advocates of Government-Run Health Care
Until now the usual suspects hoping to win a government takeover of America’s health care system appeared to be confident of victory. No longer, however. Some of them, at least, are starting to notice the fact that health care “reform” will be incredibly expensive at a time when the U.S. government has no money. Indeed, the problem is not that the Treasury is empty. Rather, it is filled with IOUs for which foreign creditors, such as China, now worry about collecting on.
Writes Jonathan Cohn at the New Republic:
Attention fellow liberals who want health care reform: You are in danger of losing the fight for universal health insurance. And it’s not only–or even primarily–because of the public plan.
It’s because of the money.
Well, contrary to the belief of many on the Left, money does matter. As much as we all might wish, money does not grow on trees. And running the printing presses isn’t the panacea that some believe.
Cohn seems surprised that the Congressional Budget Estimate came in so high, but a complete bill almost certainly would cost even more. Thankfully, the government-takeover bandwagon has hit a large bump, and even larger barriers must be overcome for health care “reform” to triumph.
Filed under: Health, Welfare & Entitlements; Tax and Budget Policy
Cohn vs. AFP
The New Republic’s Jonathan Cohn accuses Americans for Prosperity (AFP) of “lies” for running an ad that claims “Washington wants to bring Canadian-style healthcare to the U.S.”
AFP’s ad is more defensible than Cohn’s criticisms of it.
Cohn elides the question of whether Shana Holmes (the woman featured in the ad) was almost killed by Canada’s Medicare system. For a supporter of single-payer like Cohn, that is tantamount to admitting that, yeah, socialized medicine sometimes kills people.
Cohn argues that the ad is unfair because Canada has many advantages over the U.S. health care sector. That may be true, but the ad doesn’t appear to defend American health care. It merely says, “government should never come in between your family and your doctor” and “Don’t give up your rights.” That’s not pro-American health care or anti-reform. It’s just anti- the type of reform that Cohn wants. And it points to one area where our semi-socialized U.S. health care sector appears to be superior to Canada’s: quicker access to intensive treatments. Sometimes, that saves lives. In fact, AFP could go farther and say that the United States has another edge over Canada, in that we develop nearly all of the best new medical technologies. In fact, our medical technologies save Canadian lives, but Canada’s health care system (and its supporters) steal the credit.
Yet “the real lie,” Cohn claims, is that the ad suggests that “Washington” wants to impose a Canadian-style system on the United States. Cohn calls that claim “demonstrably false.” But consider:
- President Obama has said he would prefer single-payer and has hinted that he would like to make incremental changes in that direction.
- Many people who support a new public plan (e.g., Paul Krugman) do so because they believe it will lead to single-payer.
- Massachusetts, which has already implemented most of the reforms that Obama and congressional Democrats are considering, is now contemplating a large leap toward Canadian-style health care by imposing capitation on its entire health care sector.
- Government rationing becomes increasingly likely as government revenues fail to keep pace with the cost of government’s health care promises. (See again, Massachusetts.)
- The Left wants government to ration care. That’s the point of the comparative-effectiveness research funding. That draft House Appropriations Committee report committed a classic Washington gaffe when it said that certain treatments “would no longer be prescribed,” because it was admitting the truth.
Cohn is correct that no politician of influence is saying she wants to impose a Canadian-style system on the United States. But I prefer to pay attention to what they’re doing.
AFP: 1. Cohn: 0.
Filed under: Cato Publications; Health, Welfare & Entitlements
Church of Universal Coverage Begins Its Campaign against that Pesky CBO
Last Monday, when lobbyists for the six biggest health care industry groups joined President Obama to announce their support for reducing health care spending by $2 trillion over 10 years, I penned and voiced my suspicion that the real motivation was to pressure the Congressional Budget Office to assume that Democrats’ health care reforms would reduce spending, despite the lack of evidence. My wife said that hypothesis sounded a little . . . conspiratorial.
Last Thursday, when it was revealed that there was no actual agreement and that the White House basically manipulated the industry to get a week’s worth of good health care press, I started to doubt whether strong-arming the CBO was really the goal of that media stunt. Then Jonathan Cohn set me straight.
In an article for The New Republic aptly titled, “Numbers Racket,” Cohn acknowledges that the biggest problem facing Democrats is that the $2 trillion cost of universal coverage has to come from somewhere. Cohn, like many Democrats, complains that the “curmudgeonly” CBO isn’t letting reformers off the hook by assuming that universal coverage will (partly) pay for itself. Cohn also acknowledges that pressuring the CBO was a likely purpose of last week’s media stunt:
The CBO took nearly the same positions back in 1994 — a fact not lost on either the White House or congressional leaders, who have communicated their concerns publicly and privately. One apparent purpose of bringing industry leaders to meet Obama this week was to showcase the potential for cutting costs; see, the administration seemed to be signaling, even the health care industry thinks it can save money by becoming more efficient.
Democrats have set their sights on legislation that would give government enormous power over Americans’ earnings and medical decisions. The main political obstacle to those reforms is their cost, thus Democrats are pressuring the CBO to pretend that those costs don’t exist. The CBO (and everybody else) should resist the Democrats’ effort to make truth yield to power.
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