Poster Boy

Billy Tauzin, the president of the Pharmaceutical Research and Manufacturers of America (PhRMA), just quit his job. Mr. Tauzin is the poster boy for everything that is wrong with health care reform in this country.

Go back to 2004. Billy Tauzin was a republican congressman from Louisiana; he was largely responsible for shepherding the Medicare Part D Prescription Plan through committee and through passage in the House. This Medicare Prescription Bill was one of the biggest government give-aways to industry in recent history. It forbade Medicare from negotiating with drug companies over price; Medicare was about to become the biggest purchaser of drugs in the world and they were forbidden to negotiate the price???? Medicaid, Medicare's ugly sister, has had a drug benefit for decades; in contrast Medicaid, by law, gets its drugs at the lowest price the manufacturer offers to any other concern. The new bill further outlawed the re-importation of drugs from Canada or from other cheaper sources. Those with Medicare and Medicaid (elderly and poor) had their drug benefit switched from Medicaid (with the lowest negotiated price) to Medicare (with no negotiated price). Overall, a windfall for PhRMA and the shaft for the taxpayer.

Several months after passage of this bill in 2004, its chief architect, Mr. Tauzin, abruptly quit his day job as a Congressman and secured a new job as the President of PhRMA, its Lobbyist-in-Chief if you will. The job paid a cool $2 million dollars per year before perks. This raised some eyebrows but when Mr. Tauzin declared that there was no conflict of interest, nothing was done.

Fast forward to 2009; Mr. Tauzin, as Lobbyist-in-Chief, was intimately involved with Rahm Emanuel in the back-room deal hashed out early in the evolution of Obamacare; in this deal, PhRMA would give back part of its windfall by agreeing to cut drug costs by $80 billion dollars over a ten year period. In return, they would avoid what they must have perceived would be a much greater hair-cut if true reform were to be passed. As it turned out, true reform was a pipe-dream; ironically, one of the things that helped to kill Obamacare was the perception of non-transparency elicited by these back-room deals. Obama, who had campaigned on encouraging negotiation on drug prices and on the importation of drugs from Canada, retreated from these positions after the deal was struck with PhRMA. Quid pro quo anyone?

In any event, now that true reform appears remote, some republicans and some PhRMA representatives obviously think that Billy Tauzin was a little too quick to hand back some of the windfall and a little too quick to facilitate the expanding role of government in health care. Hence, he is gone and it is back to business as usual. Those who live by the sword, die by the sword. Billy Tauzin stands as my poster boy for all that is wrong with the process.