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Economics, Crony Capitalism
Big Pharma Wins Big in Health Care Reform
First published in his blog Unsilent Generation yesterday, 22 March 2010
To a large extent, the “debate” over health care was a show debate, an extended round of Washington smoke and mirrors. The administration early on cut its deal with Big Pharma, and pretty much stuck to it throughout the process.
The Republicans look a sour lot this morning, but the pharmaceutical industry, which helps foot the campaign bills of a sizeable chunk of members of both parties, is delighted with the legislation, and with its Democratic friends in the White House and on the Hill.
Members of Congress in both parties generally have lined up behind the insurance and pharmaceutical industries from the get go. So it should come as no surprise that the Democrats, who long ago gave up any pretence of opposing corporate power, found a way to accomodate the pharmaceutical companies on the way to its tepid reform. To a large extent, the “debate” over health care was a show debate, an extended round of Washington smoke and mirrors. The administration early on cut its deal with Big Pharma, and pretty much stuck to it throughout the process.
In fact, the Dems actually made the drugsters look good, celebrating the industry’s generous “concessions” and “discounts” while ensuring that no real threat to Big Pharma’s profits would make their way into the final bill.
The industry’s main goal from the very beginning has been to fend off any government power to negotiate or seriously regulate drug prices–and this they did.
Big Pharma’s second big win was to prevent any measure that would have opened the way for American consumers to buy less expensive drugs abroad, especially from Canada.
At the same time, the supposed give-backs by the drug industry are projected to more than pay for themselves. The much-lauded discounts on brand name drugs for seniors in the Medicare prescription drug program, for example, are good for Big Pharma because they discourage oldsters from switching to generics.
And more insured people simply mean more money coming into the coffers, for Big Pharma as well as for the insurance industry.
Confirmation of the industry analysis came early in the day from the stock market, where drug stocks initially remained level; there certainly was no rush to dump shares, which is what would be expected if the bill actually represented any threat to profits. And by 1 p, EST, CNN Money was reporting a rally in health care stocks.
“I was unable to find anything in there that would cause me to have anxiety if I were a shareholder in a pharmaceutical company,” Ira Loss, a senior health-care analyst at the research firm Washington Analysis, told Dow Jones. According to the ticker story:
Despite fees and rebates imposed by the legislation, “analysts say drug makers will end up recouping those costs through new customers: The bill would provide insurance coverage to an additional 32 million Americans.” The Dow Jones story continues:
The GOP, which purports to be the party of big business, ought to be applauding at least these portions of the health care reform—and perhaps when the cameras go away, some of them will quit bitching and count their blessings. As for the obnoxious Tea Party gang, if they start threatening the real power in this country, which is vested in corporations, they may well find themselves whipped and isolated.
Born in 1936, James Ridgeway has been reporting on politics for more than 45 years. He is currently Senior Washington Correspondent for Mother Jones, and recently wrote a blog on the 2008 presidential election for the Guardian online. He previously served as Washington Correspondent for the Village Voice; wrote for Ramparts and The New Republic; and founded and edited two independent newsletters, Hard Times and The Elements.
Ridgeway is the author of 16 books, including The Five Unanswered Questions About 9/11, It’s All for Sale: The Control of Global Resources, and Blood in the Face: The Ku Klux Klan, Aryan Nations, Nazi Skinheads, and the Rise of a New White Culture. He co-directed a companion film to Blood in the Face and a second documentary film, Feed, and has co-produced web videos for GuardianFilms.
This article is republished in the Baltimore Chronicle with permission of the author.
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Baltimore News Network, Inc., sponsor of this web site, is a nonprofit organization and does not make political endorsements. The opinions expressed in stories posted on this web site are the authors' own.This story was published on March 23, 2010.
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