The timing of the $2.3 billion Pfizer settlement (sub req) couldn’t be better for hard-line Democrats, and worse for big pharma.
I don’t know if President Obama will be able to pull a rabbit out of his hat (as he did last September) and get health reform legislation back on track – but even if reform fails, you can bet the Democrats in Congress will exact a heavy price on big pharma.
I’ve been predicting since December that Congress will authorize, or perhaps even require, the Secretary of HHS negotiate drug prices with big pharma for Medicare and other government programs – like every other industrialized country does, like the VA does (and pays 40% less than cash price). And this can be, and would be, done under budget reconciliation rules that only require 51 votes in the Senate (the House is a slam dunk). Reconciliation applies to budget matters only; federal payments for drugs clearly qualify for the reconciliation process:
These instructions require authorizing committees with jurisdiction over mandatory spending and revenue policies (usually more than one) to make legislative changes in those programs to effect a specified level of budgetary savings provisions. The instructions typically cover the same fiscal years as the budget resolution, with separate dollar amounts specified for each of the years in the budget resolution. While the Budget Committees develop these instructions based on policy assumptions for changes in programs and laws (which are often printed in the committee reports on the budget resolution), the authorizing committees have complete discretion over the specific programs to be changed and the substance of those changes. An authorizing committee must only meet the specified spending and/or revenue directive given it.
What does the Pfizer settlement have to do with this? Nothing and everything. This is yet another example of egregious behavior by pharma/big insurers/device companies illegitimately and unethically sucking huge dollars out of the economy to maximize their profits. (for other examples, peruse this blog and any newspaper). If reform fails, the Dems will be looking for blood, and pharma will be near the top of the list of donors. The settlement, and Pfizer’s “outrageous behavior” Pfizer that led to the settlement, will be exhibit one at Congressional debates over the issue, and Republicans seeking to block governmental negotiation with pharma will find themselves in a politically impossible position; if they fight the Dems, they’ll be portrayed as sucking up to big business and more interested in donor profits than deficit reduction. If they don’t…well…that would be a surprise and inspiration for some serious soul searching on the part of big medicine.
There’s a lot of money on the table here, and I’d expect the other pharma companies are mad as hell at Pfizer for providing the Democrats with more ammunition for the coming battle over Federal negotiation of drug prices.
I don’t know about your last comments, it seems the current administration has it share of staff that has helped pharma accomplish their goals. In addition, some well placed Senior Dems have had quite a few pharma donations made to them. I am not convinced this is solely a “Republican” issue and the Dems will be unified in their assault on the big bad pharma.
While the continued blatant behaviors of the Big Pharmas is allowed to continue, The bigger issue is allowing these same people to influence standard of care. It is absolutely scarey that these same people have such a strong influence on how standards of care are determined, and how malpractice determiniations are influenced by whether or not a standard of care has been followed.