As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Monday, August 31, 2009

How The Media Actually Can Help Bring About Change

While I agree that too many traditional media stories fail to offer context and explain the nature of the policy, those stories can be found if you know where to look. For instance, Jonathan Cohn offers a pretty comprehensive look at the White House's ill-fated deal with the pharmaceutical industry, where drugmakers traded an insignificant hit to their bottom lines for the protection of their record profits far into the future.

The drug industry was first in line, according to several sources familiar with the discussions. But its list of demands was long. It strongly opposed letting the federal government negotiate directly with drug companies over price, the way governments in other countries do; it didn't want to give the government rebates on drugs it purchased for Medicare recipients; and it didn't want to let Americans buy cheaper drugs overseas. All three positions ran counter to Democratic Party orthodoxy. (Later, the industry made clear its opposition to a public insurance option, as well.) Pressed to give up something, the drug-industry officials indicated that they would be willing to put up with several other changes designed to reduce its revenues--like giving the government a larger rebate on drugs purchased for Medicaid recipients--but only to the extent they reduced revenues by $50 billion over ten years. Anything more, they said, was unacceptable.

Neither the staff of Baucus's Senate Finance Committee, which had been leading the discussion with PhRMA, nor officials from the administration, who had since joined the talks, were thrilled with this offer, according to people with close knowledge of the negotiations. For one thing, the administration and Baucus believed the drug industry would ultimately make money from reform, since more people with insurance coverage was bound to mean more people buying drugs. (PhRMA countered these arguments with a dubious analysis arguing that reform would not mean much new business, partly because most of the newly insured would be relatively healthy and thus need few drugs.) Obama and his allies also thought $50 billion over ten years just wasn't a lot of money, particularly for an industry that has consistently ranked among the most profitable in the country. They had a bigger number in mind--something closer to $100 billion.

A breakthrough finally came when Obama and his allies indicated they wanted to fill in the "donut hole"--the gap in coverage for seniors who opt for Medicare drug coverage. At that point, the drug industry volunteered to sell its name-brand drugs at a discount to consumers, worth about $30 billion over ten years. It wasn't much of a sacrifice for the industry; the discounts would come almost entirely out of new drug sales, not existing ones. But it helped seal the deal.

The White House would tell you - in fact, they told me - that it's better to have Big Pharma on the side of reform, and $80 billion is a significant savings for the government and its people, and it's better to get that than to get no reform at all. But the measure of how this deal resonated with the public, which did actually find out about it, is how Congressional leaders have walked away from it ever since.

Senate Majority Leader Harry Reid said Friday that he was not bound by a controversial deal negotiated between the White House and pharmaceutical companies, telling thousands of Nevada voters on a conference call that “I have not agreed with anybody to do that.”

The drug industry told the White House this summer that it would cut future drug costs by $80 billion in exchange for assurances that any health care legislation would prevent the government from negotiating for lower drug prices. As a result of the deal, the industry is bankrolling an ad campaign touting Barack Obama’s health care overhaul.

But Democrats in Congress have balked at the agreement.

“I’m a Democrat in the Senate, and I haven’t agreed,” Reid told a caller.

Guess what, in the end, this pharmaceutical deal will probably be in the final bill, they will give up a minimum of profits, and we won't import drugs from Canada, or negotiate on prices, or restrict patents on biologics. Because corporations still rule our government, and their power has grown immensely over the past several years. But if it holds that the drugmakers take a real hit, that would be entirely because the media reported on this, and made it an issue (helped along by some Democrats, like Henry Waxman, who yelped about it). That's the value an aggressive press could add to this debate.

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