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Obama vs. the drug industry: sound and fury, signifying nothing

Late last week, the House Energy and Commerce Committee released more details of its investigation into the secret backroom deals that gave birth to ObamaCare. ¬† A pile of emails from senior White House officials to pharmaceutical industry bigwigs reveal that all of President Obama’s public anger at greedy drug companies was actually part of what professional wrestlers call “kayfabe‚?Ě – a choreographed act designed to create drama and tension.

Obama and those pharmaceutical executives stayed in character as adversaries to fool the public, while behind closed doors, they were inking lucrative deals to put tax money into the industry’s pockets, in exchange for vital industry support for ObamaCare. ¬† This perpetuated the vital illusion that Obama was a brave crusader against drug company greed, at the same time he was privately offering various incentives to corporate honchos, to make certain they would fall into line and embrace ObamaCare at the pivotal moment.

The President was publicly denouncing efforts by pharmaceutical “special interests‚?Ě to stymie his great reform efforts, while privately assuring PhRMA, the industry’s lobbying group, they would have unrivaled access to ObamaCare commissars, granting them valuable input into the crafting of that legendary legislative disaster.

Of particular interest is an email sent out by top PhRMA lobbyist Bryant Hall, on the eve of a fiery Obama speech in which he thundered that it was time for drug companies to “pay their fair share.‚?Ě ¬† As Hall assured his contacts, “Here’s the stuff. ¬† Background is that the Pres’s words are harmless. ¬† He knows personally about our deal and is pushing no agenda.‚?Ě

Another White House email assured drug lobbyists that Rahm Emanuel would get together with White House Office of Health Reform Director Nandy-Ann DeParle to “make it clear that PhRMA needs a direct line of communication, separate and apart from any other coalition.‚?Ě ¬† All pigs feeding at the government trough are equal, but some pigs are more equal than others.

This secret relationship did have its rocky moments, and the White House did not hesitate to deliver some quiet threats to finicky drug lobbyists. ¬† In May 2009, when PhRMA expressed some reluctance to get on board with the President’s agenda, they were explicitly told that the Administration would publicly vilify them at a major press conference unless they fell into line. ¬† Hall warned his fellow lobbyists in an email, “We need to sign it. ¬† [Then-White House Press Secretary] Robert Gibbs is going to call PhRMA out specifically by name as an outlier at the press conference if we do not. ¬† Rahm is already furious. ¬† The ire will be turned on us.‚?Ě

In June 2009, PhRMA lobbyists were told that ObamaCare might just include two “poison pills‚?Ě that could have cost them billions of dollars: a rebate of pharmaceutical costs for Medicare Part D enrollees, and the elimination of tax deductions for direct-to-consumer drug advertising. ¬† They were told the President would use his weekly radio address to call for a full rebate of Medicare Part D, which Hall construed as “punishing us for being forward leaning.‚?Ě ¬† A week later, PhRMA wrote White House Deputy Chief of Staff Jim Messina to say they were ready to make a deal.

The drug industry ended up making concessions that were worth about $80 billion toward the cost of ObamaCare over the next 10 years, and they ran a multi-million dollar ad campaign in support of the President’s legislation. ¬† In return, they were promised protection from price controls, guaranteed income thanks to ObamaCare’s mandates, and favorable language against drug importation. ¬† The latter was explicitly presented as a reward for PhRMA’s good behavior. ¬† Hall said in an email that he had spoken with Office of Health Reform Director Nancy-Ann DeParle, and she told him the White House “is opposing import on this bill, specifically linking to our willingness to be cooperative on [health care reform].‚?Ě

Hall made it clear that loose lips would sink this crony capitalist ship in a subsequent email: “They have something pretty nice cooked up on importation. ¬† But they want to keep it really quiet.‚?Ě ¬† In the end, PhRMA support for ObamaCare was portrayed as a deal they reached with the Senate Finance Committee, with the White House’s heavy-handed involvement discreetly concealed from the public.

The House Energy and Commerce Committee concludes that its review of the tactics used by the White House “identified a potent combination of policy threats and private reassurances that industry would be protected against policies it disliked in exchange for support of the legislation and acceptance of other policies. ¬† Taken together, these findings help illuminate a previously opaque series of agreements that resulted in a fundamental reshaping of our nation’s health care system.‚?Ě

This all stands in very unpleasant contrast to Obama’s promises of transparency and accountability. ¬† In some cases, particularly the drug importation issue, the White House’s backroom deals with Big Pharma run directly counter to his campaign rhetoric.

But it’s also important to remember that this sort of thing is standard operating procedure for Obama-style Big Government corporatism. ¬† ObamaCare isn’t about taxing the public to finance government-provided benefits – that’s coming next, after ObamaCare fails, and the Left begins urging single-payer socialized medicine. ¬† Instead, this is a scheme to preserve the rudiments of a private sector, which marches to a tune called by Big Government.

Of course the government’s “partners‚?Ě must have some input into the process, and it must be kept from public view. ¬† The junior partners in this arrangement cannot be given mandates that would prove instantly fatal to their business model. ¬† At the same time, they must occasionally be reminded that Big Government is the boss, and has acquired vast powers it can use to punish them. ¬† Private sector moguls are assisting in the creation of powers that will quickly grow beyond their ability to control. ¬† Their willing, enthusiastic cooperation will become increasingly less necessary. ¬† More government means more compulsion, and the end product of compulsion is obedience.

In the years to come, Big Pharma might be surprised to see how much of Big Government’s bulk comes pouring through the door they have opened, as they discover much of their complex deal with the Obama Administration turns out to have been written in pencil.

Written By

John Hayward began his blogging career as a guest writer at Hot Air under the pen name "Doctor Zero," producing a collection of essays entitled Doctor Zero: Year One. He is a great admirer of free-market thinkers such as Arthur Laffer, Milton Friedman, and Thomas Sowell. He writes both political and cultural commentary, including book and movie reviews. An avid fan of horror and fantasy fiction, he has produced an e-book collection of short horror stories entitled Persistent Dread. John is a former staff writer for Human Events. He is a regular guest on the Rusty Humphries radio show, and has appeared on numerous other local and national radio programs, including G. Gordon Liddy, BattleLine, and Dennis Miller.

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