Obama's budget screws his Big Pharma allies

Photo by Lawrence Jackson/White House

obama laughing

This is just pure schadenfreude. It might even be schadenfreude a la mode with a bourbon chaser.

During the passage of Obamacare some of the likely victims of his scheme to trash the American health care sector signed onto the plan in order, they thought, to save themselves. To their great and everlasting shame, a lot of the Catholic hierarchy bought the bullsh** feel-good of providing free medical care to the poor, not realizing they were buying contraception, abortion, sex change operations and any other sexual perversion that came down stream. Another set of gullibles were the Big Pharma executives. They cut a deal with the devil (the article is worth reading):


Commitment of up to $80 billion, but not more than $80 billion.

1. Agree to increase of Medicaid rebate from 15.1 – 23.1% ($34 billion)

2. Agree to get FOBs done (but no agreement on details — express disagreement on data exclusivity which both sides say does not affect the score of the legislation.) ($9 billion)

3. Sell drugs to patients in the donut hole at 50% discount ($25 billion)
This totals $68 billion

4. Companies will be assessed a tax or fee that will score at $12 billion. There was no agreement as to how or on what this tax/fee will be based.

Total: $80 billion

In exchange for these items, the White House agreed to:

1. Oppose importation

2. Oppose rebates in Medicare Part D

3. Oppose repeal of non-interference

4. Oppose opening Medicare Part B

And now here we are. In the 2016 budget, Obama goes after Pharma like it was a middle class family with savings:

The news is that Mr. Obama’s new budget proposal for 2016 reneges on the quid pro quo that some of the dumber drug makers cut in return for supporting ObamaCare in 2009. That transaction was supposed to buy political protection against the left-wing wish list of price controls, weakened patents and other extortion that Mr. Obama now endorses in his budget.

The White House wants to cut intellectual-property shelters for biologic therapies to seven years from 12, and to slash payment rates for hospital-administered medicines. Mandatory Medicaid “rebates”—which require drug makers to offer governments discounts from average drug prices—would be exported into the Medicare prescription benefit.


Why this turnabout? Because once Obama got their support to pass the bill he no longer needs their support. Instead, he needs the support of insurers who don’t want to pay the going rate on medications:

The move sends a political message since drug companies were allies in Obama’s struggle to pass his health care overhaul from 2009 to 2010. Fast forward to 2015, and it’s insurance companies that are helping put the law’s coverage expansion into place. Insurers have been complaining loudly about the high price of new drugs, such as Sovaldi, the $1,000-per-pill medication that can cure hepatitis C.

Unlike the U.S., governments in many other countries play a central role in determining drug prices. While the Veterans Affairs Department and state Medicaid programs have legal authority to obtain steep discounts from drug makers, that doesn’t include the largest payer, Medicare. Congress denied HHS the authority to negotiate prices when the Medicare prescription program was created.

It is hard to have a lot of sympathy for any of the people who supported Obamacare. They sold out their nation for what they hoped was thirty pieces of silver and it is only fitting that they will end up with damned lot less.




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