Whither The Lobby? Tauzin Resigns From PhRMA
26 CommentsBy Ed Silverman // February 12th, 2010 // 8:50 am
After five years heading the pharmaceutical industry lobbying machine in Washington, DC, Billy Tauzin has resigned from PhRMA amid bickering over his deal with the White House over health care reform. The former Louisiana congressman, a 66-year-old cancer survivor who was paid $2 million a year, will formally leave on June 30 (read the bio).
His departure was precipitated by his calculated move that industry would benefit by working with the Obama administration, which alienated some PhRMA members and many Republicans, who have traditionally received industry backing. Under his tutelage, for instance, the trade group increased support for Democrats in an effort to become more of a bipartisan organization.
The deal he helped broker had drugmakers contributing $80 billion over a decade to health care reform savings by cutting some prices in order to close a Medicare coverage gap. In return, the White House backed away from two campaign vows by President Obama - supporting importation of drugs from Canada and allowing the federal government to negotiate Medicare prices directly with drugmakers. PhRMA spent $100 million in ads backing health care reform.
Of course, when health care reform began unraveling last month after the upset Senate win by Republican Scott Brown of Massachusetts, Tauzin became vulnerable. Health care reform “has not been without its political cost because it is actually difficult to be bipartisan in all of this,” Sanofi-Aventis ceo Chris Viehbacher told The New York Times.
Hindsight is a wonderful thing and, now, PhRMA must find someone equally adept at maneuvering through Washington. No doubt, a worthy successor will emerge. What becomes of the industry stance on health care reform - such as it is - remains to be seen. But there is also the open question of whether Tauzin’s overall approach - a shift toward bipartisanship - was correct. What do you think?
Was Tauzin Correct About Bipartisanship?
- Yes (70%, 80 Votes)
- No (32%, 36 Votes)
Total Voters: 114
Loading ...pic thx to politico
harpy
You gotta hand it to the guy - he’s a master politician. First he finagles his position with PhRMA by engineering the Medicare Part D bill and getting it passed. Then, he uses the giant “doughnut hole” he wrote into it to bargain for concessions in the Healthcare Bill. Can’t say I like him, but I do respect him.
SteveM
Re: No doubt, a worthy successor will emerge.
Which means another oily Beltway Reptile insider like Tom Daschle.
Not blaming Pharma. It’s how the game is played. But it’s still a shame, because it’s the little guy who inevitably gets screwed by inside baseball politics in the end.
Condor
Ed, I might politely disagree with your poll’s premise — so I’ll not vote. [Or I'd NO, on Tauzin, personally.] I do not think Tauzin thought a bi-partisan path, at all. I think he 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</I” — and PhRMA would spend perhaps $200 million opposing reform.
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 miscalcuated — on a grand scale.
In fact, it is quite possible pharma will need to kick in more than $100 billion — perhaps $120 billion (just as I earlier predicted). 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.
Namaste
PS: If it is not clear (enough) here, I think PhRMA got EXACTLY what it deserved, when it hired Tauzin. Sad, actually.
Condor
Ack — “thought” in second sentence should be “sought”. Sorry about all the format snafus, too. Must be Friday.
Namaste
gpawelski
It’s ironic tha harpy mentions Tauzin using the Medicare Part D bill to bargained for concessions in the Healthcare bill.
It was the Medicare Part D bill that tried to break apart the chemotherapy concession in cancer medicine. Typically, doctors gave patients presciptions for drugs that are then filled at pharmacies. But medical oncologist bought chemotherapy drugs themselves, often at prices discounted by drug manufacturers trying to sell more of their products and then administered them intravenously to patients in their offices.
Not only did medical oncologists have complete logistical, administrative, marketing and financial control of the process, they also controlled the knowledge of the process. The result was that the medical oncologist selected the product, selected the vendor, decided the markup, concealed details of the transaction to the degree they wish, and delivered the product on their own terms including time, place and modality.
The fact that medical oncologists received no reimbursement for providing oral-dose therapy to patients had been the principal barrier to the availability of oral-dose protocol. The bill offered patients benefits they did not have before, mainly some coverage for oral chemotherapy drugs.
Although some benefit was realized, more might have been achieved had lobby groups fought for the oral chemotherapy drug issue, instead of trying to retain the chemotherapy concession as much as they could. Although the Medicare bill tried to curtail the chemotherapy concession, private insurers still go along with it.
Ed Silverman
Hi Condor,
Fair point. And like any good Machiavellian strategist, Tauzin may have deliberately been tossing around the word ‘bipartisanship’ as so much window dressing. But then again, he did do that deal with the White House. So I chose to take him at face value for the purposes of today’s discussion. And comments such as yours are valued, because it gives us a chance to further examine what Tauzin was really up to.
Cheers
ed
AnneS
Can’t say I like him, can’t say I respect him.
Condor
Thanks, Ed — I think Tauzin (like Rahm Emmanuel, on the other side of the coin) is a master manipulator. He counts on all of us to take him “at face value,” so that he may make less honorable (or at least less transparent) plans — and most times, execute them.
Now, I just can’t resist mentioning that another master manipulator preceded Tauzin, in the PhRMA President’s seat — Ex CEO of Schering-Plough, “Fast” Freddie Hassan.
Great stuff, as always, Ed!
Namaste
Justice in MI
Like a lot of southern pols, Tauzin is a compelling shmoozer. It may have felt like “bi-partisanship,” or something vagely homey, whatever it actually was.
At core, I don’t have any idea who the guy actually is. But he had the right face and style at the right minute for PhRMA the organization–that is, he could make it seem whatever it needed to seem, and turn on a dime as that might have also been needed.
That’s what you probably want in a Chief–someone who conveys Good Ole’ Boy with the talents of a Fast Eddy or a a Cool Hand Luke.
Condor
JiM — he is exactly like your last sentence. Through no fault of my own (in a prior role — for a client), I ended up at a lunch meeting in D.C., at a table for six –with him (back at the height of his legislative powers).
He held forth for over 90 minutes, while essentially saying. . . . um, nothing. My clients obviously bought his lunch — and a bunch more of what he was selling. He was selling. . . a horse product, to use your turn of phrase. [He was more "Cool Hand Luke" -- than Fast Eddy, though.]
But that probably describes most legislators, and politicians, these days.
Namaste
Condor
The Sunlight Foundation has put together some fabulous stuff, on Tauzin, and PhRMA’s “deal” — now clearly-unravelling — do take a look. Great two-minute video — with a strong graphical style.
Namaste
John Mack
I’ve heard that Congressman Boehner is being considered to replace Tauzin: http://bit.ly/cIQodB
Sam R.PH.
What everyone seems to be forgetting is the negative impact on American citizens. Let see, 80 to 90 billion over a period of 10 years to eliminate the donut gap in exchange for - not allowing citizens to obtain cheaper medications from outside the U.S.A and not allowing the federal government to negotiate Medicare prices directly with drug makers.
While PHARMA companies can have their drugs made in foreign countries at cheaper prices, PHARMA has the freedom to keep raising prices on their drugs and recoup the billions they gave. Not only that, but if drug prices continue to rise, prescription insurance companies will raise their premiums, co-pays and deductibles.
Healthcare cost will soar and the U.S. patients will be paying for it in the end.
Who really cares who PHARMA picks? Who is picked to fight for the American public?
bob
It’s about time. Pharma should start acting like a business if it’s going to be treated like one. What other industry gives money back to the government? $80 billion, no less. Not the airline industry, not automobile manufacturers (they GET money), not any one. Most of pharma is moving off shore anyhow, along with jobs and taxes, so there won’t be much more to kick around anymore. Pharma ought to snap out of it.
Justice in MI
Saw the In Vivo speculation about candidates. Personally, moving Boehner out of Congress would be fine with me. But my gut sense that John Breaux is more likely, despite going Lousiana again, and his being (in name) a Dem.
Breaux has the kind of slick, low-key style that makes him a good fit.
Boehner radiates gastric distress, probably even for people who agree with him. Or how about Kay Hutchinson who may be out of work?
Justice in MI
Just adding to speculation–my sense has always been that PhRMA, like the industry more generally, doesn’t want a polarizing figure at the top. Boehner certainly would be. Breaux or Hutchison a lot less so.
If they decide healthcare reform is truly dead and the future lies with the Republicans, they’d go with someone like Hutchison. If they want to keep their options open, as they often do, they’d go with someone like Breaux. Breaux is himself a guy who always keeps his options open.
If they want to do themselves in, they’d consider Gingrich. But I think he has other plans.
What’s Mitt Romney up to?
Lisa Van Syckel
Well, Hello Bob..
Lisa Van Syckel
Congressman Boehner, now that’s a frightening thought. He was so cold to a constituant, who had lost a child to Paxil. Bad choice for consumers..
Full disclosure, Im a registered Republican.
Former Pharma Marketing Director
Sam R.PH. - you’ve got it right. No one speaks for the citizens/consumers/patients who actually take/purchase/need some of the drugs. I think Pharma wants it that way…
But it is time for us all to speak up against the manipulation.
Whether you are sick or not, whether you buy prescription drugs or not you are paying for the shenanigans through the rising cost of health care premiums. Everyone has a vested interest in this, they just do not realize it.
It is time they/we all woke up!
Justice in MI
“Who is picked to fight for the American public?”
Obviously, anyone who chooses to.
The reason it’s relevant to think about whom PhRMA chooses is that it will be a signal which horse they’re riding on, especially after the health care reform debacle.
Given the Supreme Ct. decision undoing much of campaign reform legislation–and many other things–the way pharma now views its political interests is of relevance to all of us.
Justice in MI
Here is the opening sentence from a story in today’s Wall St. Journal:
“With the departure of their top lobbyist Billy Tauzin, drug makers are looking to retain the concessions he negotiated from Democrats while signaling to Republicans that the industry is heading back to its conservative roots.”
This is not surprising. But, in my view, it will take all of us (including the industry) over the cliff that much sooner–for those who haven’t gone over already.
Your Future
Here is some of what will happen if PhRMA goes the way predicted:
1. The FDA will again be captured. A new commissioner and chief counsel will make the Bush administration look like the good old days.
2. The modest increase in warning letters and DOJ actions that we’ve seen in the past year will revert to nothing.
3. Initiatives both to eliminate product liability will increase, and most likely, succeed.
4. There will, inevitably, come a drug disaster that dwarfs Vioxx and affects children. And, in response, the public, the press, and their self-interested representatives will turn with a vengeance on the industry, regulating it to a real death and genuinely destroying the engine of innovation that, at its best, the industry actually is.
5. And we are all up the creek.
FDAer
What do you mean again. The only changes under the present administration have been cosmetic.
Michael Kirsch, M.D.
There never was any bipartisanship. Wait to you see the Health Care Summit Follies on Feb 25th. You won’t hear much policy, but it will be a performance. Both sides are rehearsing with their understudies. The agenda is not to reform health care, but to make the other guy look bad. This should be easy since politicians are skilled at this task. Humorous view on the ’summit’ at http://www.MDWhistleblower.blogspot.com
Your Future
Agree with Michael Kirsch, but there was “split partisanship” in this respect–begininning in 2006, pharma started reversing the 75/25 proportion of campaign donations to Reps / Dems that goes back to mid-90s. In 2008, Dems got slightly more. Almost certainly, we’ll see a move back in the other direction in 2010.
As above, industry tends to go where the power goes–not surprising–although some industries are more consistently partisan (like Dems and law firms; Reps and tobacco) regardless.
Greg Pawelski
How Medicare’s Payment Cuts For Cancer Chemotherapy Drugs Changed Patterns Of Treatment
The Jacobson, Earle, Price and Newhouse study - How Medicare Payment Cuts For Cancer Chemotherapy Drugs Changed Patterns Of Treatment - published in Health Affairs adds to the survey done by Dr. Neil Love, entitled “Patterns of Care.”
In the Jacobson, Earle, Price and Newhouse study, physicians switched from dispensing the drugs that experienced the largest cuts in profitability, carboplatin and paclitaxel, to other high-margin drugs, like docetaxel.
One of the results of Dr. Love’s survey shows that for first line chemotherapy of metastatic breast cancer, 84-88% of the academic center-based oncologists (who do not derive personal profit from infusion chemotherapy) prescribed an oral dose drug (capecitabine), while only 13% prescribed infusion drugs, and none of them prescribed the expensive, highly remunerative drug docetaxel.
In contrast, among the community-based oncologists (who do derive personal profit from infusion chemotherapy), only 18% prescribed the oral dose drug (capecitabine), while 75% prescribed infusion drugs, and 29% prescribed the expensive, highly remunerative drug docetaxel. (Patterns of Care: 2005,Vol 2,Issue 1).
While Newhouse and Earle’s previous Michigan/Harvard study - Does reimbursement influence chemotherapy treatment for cancer patients? - showed results before the new Medicare reform, Love’s “Patterns of Care” study showed results that the Medicare reforms were still not working. This new study adds another “smoking gun” about the chemotherapy concession issue.
I believe that all these studies showed results that the Medicare reforms are still not working. It is still an impossible conflict of interest. And the existence of this profit motive in drug selection has been one of the major factors working against the individualization of cancer chemotherapy based on testing the cancer biology. It is way over time to take medical oncologists out of the retail pharmacy business and make them be doctors again.
http://ojhe.org/index.php/ojhe/article/viewArticle/50
http://content.healthaffairs.org/cgi/content/full/hlthaff.2009.0563v1