How the White House’s Deal With Big Pharma Undermines Democracy

town-hallI’m a strong supporter of universal health insurance, and a fan of the Obama administration. But I’m appalled by the deal the White House has made with the pharmaceutical industry’s lobbying arm to buy their support.

Last week, after being reported in the Los Angeles Times, the White House confirmed it has promised Big Pharma that any healthcare legislation will bar the government from using its huge purchasing power to negotiate lower drug prices. That’s basically the same deal George W. Bush struck in getting the Medicare drug benefit, and it’s proven a bonanza for the drug industry. A continuation will be an even larger bonanza, given all the Boomers who will be enrolling in Medicare over the next decade. And it will be a gold mine if the deal extends to Medicaid, which will be expanded under most versions of the healthcare bills now emerging from Congress, and to any public option that might be included. (We don’t know how far the deal extends beyond Medicare because its details haven’t been made public.)

Let me remind you: Any bonanza for the drug industry means higher healthcare costs for the rest of us, which is one reason why critics of the emerging healthcare plans, including the Congressional Budget Office, are so worried about their failure to adequately stem future healthcare costs. To be sure, as part of its deal with the White House, Big Pharma apparently has promised to cut future drug costs by $80 billion. But neither the industry nor the White House nor any congressional committee has announced exactly where the $80 billion in savings will show up nor how this portion of the deal will be enforced. In any event, you can bet that the bonanza Big Pharma will reap far exceeds $80 billion. Otherwise, why would it have agreed?

In return, Big Pharma isn’t just supporting universal health care. It’s also spending a lots of money on TV and radio advertising in support. Sunday’s New York Times reports that Big Pharma has budgeted $150 million for TV ads promoting universal health insurance, starting this August (that’s more money than John McCain spent on TV advertising in last year’s presidential campaign), after having already spent a bundle through advocacy groups like Healthy Economies Now and Families USA.

I want universal health insurance. And having had a front-row seat in 1994 when Big Pharma and the rest of the health-industry complex went to battle against it, I can tell you first hand how big and effective the onslaught can be. So I appreciate Big Pharma’s support this time around, and I like it that the industry is doing the reverse of what it did last time, and airing ads to persuade the public of the rightness of the White House’s effort.

But I also care about democracy, and the deal between Big Pharma and the White House frankly worries me. It’s bad enough when industry lobbyists extract concessions from members of Congress, which happens all the time. But when an industry gets secret concessions out of the White House in return for a promise to lend the industry’s support to a key piece of legislation, we’re in big trouble. That’s called extortion: An industry is using its capacity to threaten or prevent legislation as a means of altering that legislation for its own benefit. And it’s doing so at the highest reaches of our government, in the office of the President.


When the industry support comes with an industry-sponsored ad campaign in favor of that legislation, the threat to democracy is even greater. Citizens end up paying for advertisements designed to persuade them that the legislation is in their interest. In this case, those payments come in the form of drug prices that will be higher than otherwise, stretching years into the future.

I don’t want to be puritanical about all this. Politics is a rough game in which means and ends often get mixed and melded. Perhaps the White House deal with Big Pharma is a necessary step to get anything resembling universal health insurance. But if that’s the case, our democracy is in terrible shape. How soon until big industries and their Washington lobbyists have become so politically powerful that secret White House-industry deals like this are prerequisites to any important legislation?

When will it become standard practice that such deals come with hundreds of millions of dollars of industry-sponsored TV advertising designed to persuade the public that the legislation is in the public’s interest? (Any Democrats and progressives who might be reading this should ask themselves how they’ll feel when a Republican White House cuts such deals to advance its own legislative priorities.)

We’re on a precarious road — and wherever it leads, it’s not toward democracy.

by Robert Reich

This article first appeared on Robert Reich’s Blog. Republished with permission


  1. LindaSutton says

    I do NOT want universal health care INSURANCE. Nor do any of the people I know in California, the state that GAVE OBAMA the presidency by supplying most of the activists and volunteer hours that pushed him over the top in key states.

    We want UNIVERAL SINGLE PAYER HEALTH CARE…a Medicare-for-ALL type of approach. Let those who are in love with the for-profit insurance monopolies stay with them if they CHOOSE. This could be their OPTION.

    Obama’s gone about this whole issue from the wrong direction. I don’t know whether he is to blame or whether it’s Rahm’s sell-out. But, sell-out it is.

    WHY are they so SPINELESS when it comes to representing the interests of the PEOPLE?

    Let’s call a MORATORIUM on CORPORATE CONTROL of our federal and state legislatures for one year. Slam the door on the corporations and do what’s right for a change.

    That’s CHANGE we could believe in….if anyone has any belief power left after betrayal after betrayal.

    Hope is quickly vanishing.

  2. danny says

    “How soon until big industries and their Washington lobbyists have become so politically powerful that secret White House-industry deals like this are prerequisites to any important legislation?”

    It obviously already is.

  3. says

    This is outrageous. Pres. Obama is again betraying the principles that he ran on. The Medicare “donut” is crippling America’s seniors, many of whom choose (or are forced) to forego necessary prescriptions because of the outrageous prices charged by big Pharma.

    The drug companies assert that without the right to charge these astronomical prices, R & D will come to a halt. Right! From my perspective, I say call their bluff. New drugs and the patents that come with them are the mother’s milk of the pharmaceutical industry. Are they really going to lay off all of their researchers and make their fortunes selling Viagra? I think not.

    Allowing corporations to call the shots and overrule what is best for the public seems to be the coin of the realm in legislatures across the land.

    This will never end until we change the state laws governing corporations to prevent them from lobbying with anything but talk. Of course, a precondition to that possibility will probably have to be public financing, the only way that honest reform candidates have a chance against highly financed incumbents and other party hacks.

    Alec Wisner

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