The White House played political hardball with drug industry honchos to get a 2009 deal that helped keep health care overhaul legislation from bogging down in Congress, according to internal emails released Thursday by House Republicans.
Obtained from the industry by the House Energy and Commerce Committee, the emails and documents shed light on the saga of President Barack Obama's health care overhaul as its fortunes shifted back and forth in Congress.
The basic outlines of the 2009 deal between the drug industry, the White House and a key Democratic senator were announced at the time, but the emails reveal inside details, such as the wariness participants had for one another, rivalries among insurers, drug makers and hospital groups, and high anxiety on all sides about the progress of the legislation.
The drug industry's $80 billion commitment gave Obama some momentum at a time when health care overhaul appeared to be bogging down on Capitol Hill. Drug makers agreed to help close Medicare's prescription coverage gap, known as the "doughnut hole," and to make other financial contributions.
The companies succeeded in avoiding new requirements to pay rebates to the government for Medicare drugs, their top priority. Ultimately, they also got White House help to beat back a plan that would have allowed Americans to legally import low-cost prescriptions from abroad.
"Taken together, these (emails and documents) help illuminate a previously opaque series of agreements that resulted in a fundamental reshaping of our nation's health care system," said an accompanying report from the committee's Republican staff.
A constitutional challenge to the health care law is now in the hands of the Supreme Court, with a decision expected by the end of June.
The staff report and the release of emails are part of the GOP campaign to fully repeal the legislation. Republicans say the emails show that the White House routinely ignored Obama's promise to openly negotiate health care legislation.
White House spokesman Eric Schultz dismissed the GOP report, calling it a "nakedly political, taxpayer-funded crusade to hurt the president's re-election campaign." Committee Democrats said it merely shows horse trading any president would do to enlist support for major legislation.
Behind-the-scenes negotiations are indeed a normal part of legislation, but things can get testy.
Tension preceded the handshakes between White House officials and pharmaceutical executives.
In the days leading up to the deal, drug makers feared that the White House was going to publicly call for Medicare prescription rebates _ dashing industry hopes of quietly squelching that idea.
"Barack Obama is going to announce in his Saturday radio address support for rebating ... unless we come to a deal," Bryant Hall, a top lobbyist for the Pharmaceutical Research and Manufacturers of America, wrote in a Wednesday, June 10 email to a colleague.
"So they are punishing us for being forward leaning. It's laughable and they are burning bridges. They can't get 60 votes for that (to pass the Senate.) It isn't even a real threat."
By that Friday, both sides had stepped back from the brink.
More negotiations followed, and on July 7, a formal meeting sealed the deal. Joining top industry officials were then-White House Chief of Staff Rahm Emanuel, then-health reform coordinator Nancy-Ann DeParle, Senate Finance Committee Chairman Max Baucus, D-Mont., and other officials, the report said. They wanted to look each other in the eye.
A one-page industry summary of the deal, also released, said the White House and Baucus had determined the $80 billion figure.
It said the Obama administration agreed that the final legislation would not include any Medicare prescription drug price controls, not even for low-income beneficiaries who also participate in Medicaid. The industry committed to run positive advertising in favor of revamping the health care system.
As word of the deal got out, some leading Democrats in the House complained that they were cut out and asserted they wouldn't be bound by its terms.
They didn't get very far. Although the final legislation included additional levies on the industry, the drug makers were still able to avoid Medicare rebates and competition from imported medications.
House Energy and Commerce Committee: http://energycommerce.house.gov
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