"The Same Old Game Playing in Washington"

The Sunlight Foundation has a superb report of the way in which Bill Tauzin, whom Obama attacked during his campaign for his slimy deal-making, pushed through a deal with the Obama White House that limited savings from the pharmaceutical companies in the health care bill to $80 billion.

The report:

  • Traces Tauzin’s history as a smarmy deal-maker
  • Lays out the key meetings between PhRMA, the White House, and Max Baucus
  • Shows how the PhRMA deal was treated with priority over the goals of Democrats in Congress
  • Tracks the fate of the PhRMA bill through the Senate passage of its bill in December–and to the point where the deal, and the rest of health care reform languishes

Here’s the description of how other Democratic priorities were sidelined for the PhRMA deal:

While the $80 billion deal was cut with Baucus’ committee, other congressional committees continued to mark-up their own versions of health care reform without the knowledge that the White House was relying on Baucus to produce the final product. In the House of Representatives, the House Energy & Commerce Committee leveled a direct threat to the $80 billion deal. Energy & Commerce Chair Henry Waxman sought to include all of the provisions that PhRMA had gotten the White House and Baucus to cut out of the reform bill. These included drug reimportation, Medicare negotiating power and speedier release of generics to the market. According to previous analysis of the measures proposed by the committee, these measures would have totaled hundreds of billions in cost cuts, far exceeding the $80 billion cap agreed to by the White House, Baucus and PhRMA.

The cost cutting measures passed in the Energy & Commerce bill spooked the board of PhRMA, which included all of the CEOs involved in the deal-cutting meetings with the White House and Baucus. The board pressured Tauzin to go public with the deal to ensure that the White House would recognize it and not renege. On August 4, the Los Angeles Times, in an exclusive report, featured quotes from Tauzin claiming that a deal between the White House and PhRMA existed and that, as Tauzin put it, “The White House blessed it.” Tom Hamburger wrote in the article, “For his part, Tauzin said he had not only received the White House pledge to forswear Medicare drug price bargaining, but also a separate promise not to pursue another proposal Obama supported during the campaign: importing cheaper drugs from Canada or Europe.”

The White House’s Jim Messina later confirmed Tauzin’s claim, stating, “The president encouraged this approach … He wanted to bring all the parties to the table to discuss health insurance reform.”

Democratic lawmakers were furious. Rep. Raul Grijalva, chairman of the Progressive Caucus, asked, “Are industry groups going to be the ones at the table who get the first big piece of the pie and we just fight over the crust?”

What’s most interesting about the report, though, is the ending: where it describes Tauzin’s ouster, announced last night, because of this deal.

In the end, the pharmaceutical industry’s support for health care reform would be left up in the air . After spending $100 million in advertising in support of legislation that Tauzin and key executives hoped would be a windfall for the pharmaceutical industry, the legislative process had flat-lined. In February, the board of PhRMA, split over the deal cut by Tauzin, pushed Tauzin to resign his post.

Here’s some more from the NYT’s report that Tauzin was leaving.

But the deal was also controversial within the drug industry, people familiar with the group’s deliberations said, because some on its board questioned whether the agreement would pay off for them. And when the Republican victory in the Massachusetts Senate seat put the brakes on the health care process, many in the trade group known as PhRMA grumbled that it had all been for naught, these people said.

Informed Thursday night of Mr. Tauzin’s plans to resign, Kathleeen Jaeger , president of the Generic Pharmaceutical Association, which sometimes crossed swords with PhRMA, said she was surprised. “He has done a fantastic job for the brand pharmaceutical industry,” she said. “Billy is a master of politics and policy.”

Officials for the trade association and the White House declined to comment.

Given the silence from the White House and PhRMA, what does that say about the fate of the health care bill itself? With Tauzin’s ouster, is there room to put no-nonsense policies back in the bill in reconciliation, starting with drug reimportation? Can we convince Byron Dorgan to stay if we simply push through the most logical policy?

I’m not sure what Tauzin’s ouster means, but I look forward to what the White House will do now that their sleazy back room deal has been laid bare.

  1. DWBartoo says:

    Geez, Marcy, somehow you are on top of everything.

    Thank you, for the mind-boggling “ALL” that you do.

    I wondered about Tauzin’s “ouster” and here, magically, you are already speaking about it.

    One would hope (ouch) that there is some “room” for something “better”, but one suspects that, somehow, defeat will yet be snatched from whatever “victory” Tauzin’s leaving might represent.



    • Larue says:

      What DW said, Mz. Wheeler!

      Besides the ‘catch’ of the linky’s, your explanation of it all and the manner in which you make the complicated seem simpler is greatly appreciated by myself . . . and you do it every time you put digits to key.

      Thanks! *G*

  2. MaryCh says:

    Well, there’s room to put no-nonsense policies back in the bill in reconciliation, but it would then become the post Citizen United coming out party for our corporate fellow quasi-citizens.

    And what DWBartoo said: Marcy, your speed, zeroing in, and dot connecting are the best, and much appreciated.

  3. klynn says:

    The following question may sound crazy…

    Is this a simple slight-of-hand to make it appear as though the EO deliberative process for policy making works? Thereby, protecting back room corporate deals approach?

    Is Tauzin “taking one for the team?”

  4. katiejacob says:

    Hi Marcy. It’s good news about Tauzin.
    But who do you think the “we” would be when you ask: “Can we convince Byron Dorgan to stay if we simply push through the most logical policy?”
    Also, who would be the “we” pushing through the logical policy?
    Do you think that there is any reason to believe that someone in the Democratic leadership (the Whitehouse? Pelosi?) might want to change course and get behind logical policy?

    • emptywheel says:


      Ultimate players don’t play with wham-o, finding it an inferior product (actually there were some legal issues going back some time, but discraft is the brand of choice for ultimate players, and now wham-o is trying unsuccessfully to get back in bc we all have become utterly dependent on the discraft weight and feel).

        • emptywheel says:

          Yeah, no one really knows that. Discraft does all real ultimate discs and many of the disc golf discs.

          But as you can imagine, the weight and feel of a disc are really critical to players, so when wham-o tried to get back in the business several years back (they had to get new specs okayed), it didn’t work out so well.

  5. bobschacht says:

    I find it interesting that Rahm Emanuel is not mentioned in this article, yet it is impossible for me to imagine that he was standing innocently by, on the sidelines. Rather, it seems likely to me that Rahm was point man for this. Was he?

    Bob in AZ

  6. ezdidit says:

    The President will go to any lengths to support and preserve the endeavors of corporations of any size, despite the fact that their strategic goal, “enhanced shareholder value,” runs counter to laws and statutes since profit strategies evolve strictly through cost-benefit analysis.

    Such amorality is, provably, not sustainable. It is particularly odious when arguably hundreds of thousands of citizens have died and will die purely for the profit of U.S. health care corporations.

    What is most stark is the failure of these corporations to live up to the standards of their own corporate charters. That in itself is a flagrant violation of corporate law, and it should be prosecuted irrespective of the McCarran-Ferguson anti-trust exemptions.

    That President Obama has not properly expressed his specific views nor advocated for specific legislation (or legal reforms) is abnegation of his duty.

  7. nolo says:

    Great stuff, Marcy —

    I personally think Tauzin felt — as a master Kabuki theatre director — he could promise one thing (the $80 billion, in return for support of reform), then deliver much less, when inevitably it became clear that $80 billion was too low, from the go.

    Tauzin would then claim (he conjectured, anyway) the President “broke the deal” — and PhRMA would next spend perhaps $200 million opposing reform. [That may still happen, BTW.]

    I think Tauzin bet nothing would actually get done. [He did not foresee reimportation being split off, as a separate measure, in the wake of the Republicans’ continuing obstruction of the omnibus package.]

    So, now it seems possible that reimportation may pass outside of the omnibus bill, and the pharma CEOs are feeling (quite accurately) that Tauzin had miscalcuated — on a grand scale.

    Did Tauzin promise the pharma CEOs that $80 billion would be all they’d ever pay? I don’t know, but it seems decidedly like his brand of hubris — to make such a sweeping promise, before the game even got underway, in earnest.


    • Larue says:

      Nicely posited, thanks for sharing that, be interesting to see how it all unfolds, including any hope for enabling reimportation and faster generics . . . .

  8. rmwarnick says:

    What did Tauzin do wrong? The secret PhRMA deal protected the drug company profits no matter what happened to health care reform.

    • nolo says:

      Not if reimportation came along with it — i.e., if the deal changed.

      I think this (Tauzin’s abrupt ouster) is evidence of a grand miscalculation, on his part — it may be weeks, or months, even, before we know precisely how the pharma CEOs came to lose confidence in him. But he has plainly upset his betters, in some respect.

      I’ve been following this one pretty closely, elsewhere.

      We shall see.


  9. jedimsnbcko19 says:

    Thank You! Marcy

    Barack Obama dream of being a one term president is about to be reality.

    What is the difference between the Bush White House and The Obama White House? this is the trillion dollar question

  10. Hugh says:

    Just a reminder. Tauzin was Chair of the Commerce Committee and sponsored Medicare Part D, another deal which benefitted Big Pharma. He then went directly from there to head of PhRMA.

    • Gitcheegumee says:

      Past is prologue?

      Tauzin switches sides from drug industry overseer to lobbyist

      By William M. Welch, USA TODAY—-12/15/04

      WASHINGTON — Retiring Rep. Billy Tauzin, R-La., who stepped down earlier this year as chairman of the House committee that regulates the pharmaceutical industry, will become the new president and CEO of the drug industry’s top lobbying group.

      Tauzin will begin work Jan. 3 heading the Pharmaceutical Research and Manufacturers of America, a powerful trade group that marshaled an army of lobbyists last year to successfully support a bill overhauling Medicare and establishing the first prescription drug benefit for seniors. Tauzin was a co-sponsor, and President Bush signed the bill into law a year ago.

      Tauzin, in an interview Wednesday following the group’s announcement, acknowledged that the U.S. drug manufacturers have suffered a “black eye” in public perceptions because of high prices and profits, safety concerns focusing on the recall of big-selling drugs, and other issues. He said his first job is to deal with those problems.”Not only do I agree with that, the industry agrees with that,” he said. “I think the industry finally gets it. They’ve lost the connection with the American public, and they’ve got to rebuild the trust with the American public.”

      Tauzin, 61, was diagnosed with intestinal cancer in March. He attributes his recovery to cancer-fighting drugs and said the experience led him to accept the job with PhRMA, as the group is commonly known, over other offers.”I was treated with a miracle drug, just like Lance Armstrong,” he said. “The question is what I wanted to do with the new life God has given me. This is the mission I want to take on.”

      NOTE: Has God approved of Tauzin resigning from his “mission”?

      • redX says:

        He also “switched” sides from D to R after Newt took over – to keep his power.

        So let’s see he “switched” from:

        – rich powerful D making deals to benefit himself and corps

        – rich powerful R making deals to benefit himself and corps

        – rich powerful Corp Whore making deals to benefit himself and corps

        ….I think I know who was on the other “side” in all these cases – the INTEREST OF AMERICA.

        There is no spoon, and

        there was no “switch”, all of the above was done on the same “side”.

        Wonder how much of a laugh they get at the pols that really do care about America – must give them a good laugh.

        • Gitcheegumee says:

          Rather reminiscent of a “spork”= a utensil that is both a spoon and a fork; usually a plastic,disposable ,utensil.

          Consider the similarities…

    • redX says:

      Full link shows he went there for $2mil/year.

      Also that the Pharma lobby money gave them a $10 return for every $1.

      Pols are cheap whores – but then again its our money so everything is gravy to them (until the gravy train derails).

  11. alank says:

    I read the whole piece before I wandered over to this blog. It pointed to a pre-sotu interview where Obama showed resentment that there’s still no transparency:

    OBAMA: Let’s hold on a second, Diane. I mean, I think that this gets into a big mush. So let’s just clarify. I didn’t make a bunch of deals. There is a legislative process that is taking place in Congress and I am happy to own up to the fact that I have not changed Congress and how it operates the way I would have liked. So that’s point number one.

    Number two is that I think it is important to know that the promises we made about increased transparency, we’ve executed here in 1600 Pennsylvania Avenue. I mean, this is the first White House in history where you know anybody who has walked into my office, anybody who has walked into the White House, you actually have a record of who comes in. We have put more stuff on the Internet than ever.

    Now that’s rich.

  12. ThingsComeUndone says:

    Billy a cancer survivor got treatment thanks to government health care but if he had been a regular person would he have survived with the private system even the Obama plan?

    • nolo says:

      Spot on, of course.

      Will former Rep. Tauzin (R., LA) ever say so? — Not. A. Snowball’s. Chance. In. Hell.


  13. ThingsComeUndone says:

    Unlike in the United States, insurance in France is not linked to employment, nor is there a lifetime limit on how much treatment a long-term survivor like Hubert can get.

    The guarantee of health insurance is the first reason why cancer experts around the world look to France as a model for cancer treatment and care. Another is that cancer care is well organized at the national and hospital levels. To treat patients, a hospital or clinic has to prove it meets national standards for high-level care. It must treat a minimum number of patients a year, and it must use a team of doctors, nurses and others to provide coordinated care.

    These standards are found at the best cancer centers in the United States, but they are set in national standards and required of all hospitals and clinics in France.


    My bold

  14. vegasboomer says:

    “The question is what I wanted to do with the new life God has given me. This is the mission I want to take on.”

    So, Mr. Tauzin, “God” wanted you to work to ensure that others will suffer and die as a result of the obstacles you will help place in the way of their getting treatment?


    • bobschacht says:

      Oh, gawd. Well, at least this is only for Shadegg’s seat. Maybe all the Republicans in the primary will spend all their money attacking each other in good old Tea Party fashion, and give the one Democrat in the race a better chance.

      Bob in AZ

    • Gitcheegumee says:

      Well Dotty, considering that Billy Tauzin is from Chackbay, Louisiana -right outside Houma-on the southern tip of Louisiana where MUCH of the shrimp industry is located here in the US- wearing waders would be part Tauzin’s natural habitat…maybe that’s why navigating the marshes and murky backwaters has made so many Louisianans quite adept at politics in the fetid swamplands of DC.

    • DWBartoo says:

      Always wondered why W got a pass when he said he spoke with Gawd on a regular basis, dottyoliver.

      I imagine we’ll see the transcripts of those conversations when the Bush 43 Presidential Papers are released, sometime next century.

      Amazing how many folks are doing Gawd’s “work” from on high these days …

      The “better” angels must be weeping at the competition in their bailiwick.


      • Gitcheegumee says:

        “We have just enough religion to make us hate one another,but not enough religion to make us love one another.”

        Jonathan Swift

        Greetings, DW.

  15. BMcGarth says:

    Wow! good on the sunlight foundation.

    Now if we can get MoveOn to step-up to the plate just maybe we can have some kind of change.

    Think the corporate libruls on MSNBC will pick this up ? Noway folks,WH party invitations can have a powerful effect on some.

  16. oldoilfieldhand says:

    Thanks Marcy! Billy will have to make do with the insider trading profits he made investing his $2 mil salary, since leaving congress.

  17. Jim White says:

    Rut roh. Who could have guessed that former regulators going to work for the companies they used to regulate would be a problem (so similar to the Tauzin story, isn’t it?):

    Former regulators hired by Toyota Motor Corp. helped end at least four U.S. investigations of unintended acceleration by company vehicles in the last decade, warding off possible recalls, court and government records show.

    Christopher Tinto, vice president of regulatory affairs in Toyota’s Washington office, and Christopher Santucci, who works for Tinto, helped persuade the National Highway Traffic Safety Administration to end probes including those of 2002-2003 Toyota Camrys and Solaras, court documents show. Both men joined Toyota directly from NHTSA, Tinto in 1994 and Santucci in 2003.

    • emptywheel says:

      Yup, this is where things get interesting on the Toyota front. It was bad enough (though not surprising) that they put off the 2010 Prius recall. But this stuff is really damning.

      • Jim White says:

        Looks like they shifted their emphasis on “quality” from the assembly line to the lobbying office. Will this be another time to look forward and not back?

    • bobschacht says:

      Who could have guessed that former regulators going to work for

      This has become a problem throughout government so often that it now has a name: regulatory “capture,” where the regulators are controlled by the industries they’re supposed to be regulating.

      Bob in AZ

  18. mikew67 says:

    Add a .50 tax to every fast food order which exceeds 500 total calories. With the millions of those sold every day in America, that would help illuminate the issue, discourage the consumption a little, and toss billions of dollars into the kitty to finance health reform — saw a cool site; Balkingpoints ; incredible satellite view of earth

  19. redX says:

    This coupled with the Cass “Orwell” – reading the full details has me thinking my alarm with how terrible these people are was a massive under-estimation.

  20. redX says:

    To be honest the deal was known pretty well before (as with the Cass) – but its just been better documented now, better writtem, and people are more in the dumps and pissed.

  21. orionATL says:

    now if prez obama were half the prez i expected him to be,

    he would invite billy over to the whitrhouse for a quiet sunday brunch in the private quarters,

    and ask him if he would like to take over health insurance reform and make something happen (for someone besides himself).

    that would be fun to watch.

    billy t. fucking over the bastards who paid him beaucoup $,

    because it felt good to do something for the nation, rather than for himself and his clients.

  22. wigwam says:

    Perhaps now that PhRMA has canned Tauzin, the White House will can his counterpart on their end, who I presume is Rahm Emmanuel.

  23. wigwam says:

    Per the Wikipedia:

    “National expenditures on pharmaceuticals [in the U.S.] accounted for only 12.9% of total health care costs, compared to an OECD average of 17.7% (2003 figures).” [1]

    Also, per the Wikipedia:

    “[T]oday, consumers shop at lower-cost online pharmacies in India, the UK, and other countries [getting] up to 60 to 80 percent or more savings off US prices.” [2]

    So let’s say it’s 67 percent, i.e., that in the U.S. drugs cost three times as much per pill as elsewhere in the world. That’s 67% of 12.9% of $2400 billion, i.e., $207 billion, per year, that Americans are being gouged by the pharmaceuticals industry.

    A couple hundred billion here and a couple hundred billion there, and pretty soon you’re talking some real money.

    [1] “Health care in the United States,” Wikipedia

    [2] “Prescription drug prices in the United States,” Wikipedia

  24. realliberaljim says:

    Someone please explain to me what you would have the president do in the current Washington culture? Obama didn’t invent deal making in Washington, he inherited it. Realistically, how can he pass ANYTHING if he doesn’t make deals, compromise and find consensus? How? And I really want to know? I presume my comment will either be ignored or slammed for the implications contained in it, but I really want to know? Should he just stand firmly on his principals….or yours, I guess? Will that get Ben Nelson onboard? Joe Lieberman? Seriously, will it?