Tauzin to Boehner: Don’t “Bully” Me

PhRMA chief Billy Tauzin so far shows no sign of waving the white flag in response to an accusatory missive from House Minority Leader Rep. John Boehner bludgeoning his former Republican colleague for leading the drug industry’s support of President Obama’s healthcare reform effort. Pointedly CC’d to pharma CEOs – Tauzin’s employers—and simultaneously released to the media on Monday, Boehner’s attempted takedown of Tauzin predictably made big news across the media spectrum, being widely quoted in the political blogosphere and on cable news shows.

In an abrupt and dismissive tone, Boehner disses President Obama as a “schoolyard bully,” accuses the trade group chief of “helping [Obama] steal others’ money as the price of protecting your own” and “[choosing] to accommodate a Washington takeover of healthcare at the expense of the American people in hopes of securing favorable treatment and future profits,” More importantly, the letter insinuates that Tauzin is a dupe because “[the deal] has now gone sour.” And that both Tauzin and his pharma CEOs are politically naïve to expect that “appeasement” of the Administration would produce a concrete deal amenable to liberals in Congress.

Dupe or not, Tauzin and PhRMA are refusing, for now, to budge from their seat at the pro-reform table. The industry trade group posted on Tuesday a “Statement on Commitment to Health Reform,” reaffirming its position in support of universal coverage and bipartisan reform legislation.

And in an email to Pharm Exec, PhRMA senior VP Ken Johnson took the high road: “Emotions are running high on both sides of this important issue and we’re not going to fan the flames. We believe we’re doing what’s best for patients and America. When people go into the emergency room, they don’t sign in as a Republican or Democrat. They’re sick and they need help. Our goal is to make certain that everyone in America has access to that critically important help.”
Johnson said Tauzin would have no comment.

The general outline of the deal struck between PhRMA and the White House has been clear since President Obama first announced it almost two months ago. The industry promised, in a series of meetings with Senate Finance Committee Chairman Max Baucus, to forego $80 billion in potential profits from drug purchases over ten years (about half via a 50 percent cut in brand-name drugs for seniors stuck in the “doughnut hole” of Medicare Part D coverage gap). PhRMA would also bankroll as much as $150 million in pro-reform advertising.

Heaping praise on the industry, Obama called the concession a “major step forward.” What he failed to do was to disclose that this was, predictably enough, a quid pro quo.

When details of the deal began to leak out (most accurately in a July 22 New York Times piece by business reporter Duff Wilson), Tauzin’s apparent coup immediately began gathering a dust cloud of controversy.

According to Tauzin, the Obama administration gave assurances that in exchange for offering up to $80 billion in potential profits over 10 years, any final reform would leave untouched two Bush-era artifacts dear to pharma’s pocketbook: the noninterference clause in Medicare Part D, preventing the government from negotiating drug prices, and federal legislation prohibiting drug reimportation from Canada and elsewhere. (The latter assurance, Tauzin said, was offered at a July 7 meeting with Obama’s chief of staff, Rahm Emanuel, Sen. Baucus, and the CEOs of Pfizer, Merck, Abbott, AstraZeneca, and Amgen.)

Rep. Henry Waxman (D-CA) and other influential progressive House Democrats weren’t quiet about their intention to ignore any agreement to which they had not been privy. Waxman singled out the noninterference clause as a deal-breaker. As the left wing of the party pushed back, the Obama administration beat a hasty retreat, tripping over its own conflicting versions of the unwritten agreement.

Tauzin, meanwhile, went on the offensive, loudly broadcasting the specifics of the agreement. “We were assured: ‘We need somebody to come in first. If you come in first, you will have a rock-solid deal,’ ” Tauzin told The New York Times on August 6. “Who is ever going to go into a deal with the White House again if they don’t keep their word? You are just going to duke it out instead.”

The political stakes within PhRMA may be just as important as the larger prognosis for reform.  Tauzin’s carefully laid plan, starting soon after he took over the industry group in 2005, has been to “liberate” Big Pharma from its anti-government, GOP-backing traditions. A different, more frank way of communicating is at the heart of his strategy; PhRMA today emphasizes what the industry is FOR, rather than what it is against. Being first among healthcare industries to step up to the pro-reform table marks the culmination of Tauzin’s unabashedly pragmatic pharma policy makeover. It might be seen as a setback for industry traditionalists, who are skeptical of both the Administration outreach effort and the internally generated forecasts that indicate drugmakers will benefit from the expanded ranks of covered patients anticipated under the reform legislation.

The fate of healthcare reform is, at this point, anybody’s guess. But it’s likely that Tauzin’s own fate as head of PhRMA is hitched to that star, falling or not. As Boehner’s letter makes clear, the Republicans, reportedly fuming over PhRMA’s palling around with liberal groups like SEIU and Families USA to promote “Obamacare,” are seizing their opportunity to drive a wedge between Tauzin and his CEO backers.

Boehner’s office did not return calls for comment.

Abbott’s CEO Miles White, a stalwart Republican, had no comment when Pharm Exec contacted the firm.

Meanwhile, the trade group’s pricey promotion of healthcare reform continues apace as part of an initiative PhRMA is pursuing with other groups outside its traditional circle of friends. The most widely broadcast spot is a re-do of the infamous “Harry and Louise” ads that are believed to have played a key role in turning public opinion against the Clinton administration’s efforts to reform healthcare in 1994. This summer, an older, and presumably wiser, Harry and Louise smile on reform: “We need good coverage people can afford,” says one ad. “A little more cooperation, a little less politics, and we can get the job done this time.” That smile already seems out of date.