While town hall meetings are ostensibly turning health care reform into a public debate, the boundaries of the health care bill are being decided in backroom dealings between the White House and the big players in the industry.
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According to the Aug. 7 New York Times, the pharmaceutical industry had pledged $80 billion in cost savings over 10 years to help pay for Obama’s plan. However, industry lobbyists recently demanded that the White House acknowledge publicly that it promised to protect drug makers from bearing any costs beyond that amount.
The revelation came in response to a House measure that would allow the government to negotiate drug prices and demand additional rebates. Presently, the government cannot negotiate lower prices for bulk prescription drug purchases for Medicare beneficiaries, resulting in super-profits for the industry. The White House has assured the drug companies that the president would stand by the behind-the-scenes deal negotiated in June.
Billy Tauzin, the former Republican House member from Louisiana who now heads the pharmaceutical trade group PhRMA, said the White House pledged to block another measure that Obama supported before he was elected: importing cheaper drugs from Canada or Europe.
In attempts to fool the public, industry officials lie that capping prices and importing cheaper drugs would “undermine its ability to develop new cures and, in the case of imports, possibly compromise safety “.
People struggling to pay for medications, particularly low-income seniors, would greatly benefit from bulk pricing and drug imports. The pharmaceutical industry, however, has staunchly opposed any legislation that might jeopardize their protected profits. Gone are the days when free-market competition and supply-and-demand ruled. In the modern age of monopoly capital, protected markets and price fixing are the name of the game.
Much of the secret bargaining took place in July at the White House. In attendance were Tauzin and several industry chief executives from Abbott Laboratories, Merck and Pfizer, as well as White House Chief of Staff Rahm Emanuel and other White House aides.
Though not surprising, this is quite a turnaround for Obama, who, as candidate for president, criticized drug companies’ greed. In a presidential campaign video ad, then Senator Obama criticized both PhRMA and Tauzin. Now, in his new role as the CEO of the capitalist state, President Obama praises their work on behalf of the public good:
“I think the pharmaceutical industry has been quite constructive in this debate,” Obama told reporters. “And the savings that they’ve put on the table are real and significant and are appreciated .”
Taking a peek behind the curtain
The pharmaceutical industry, like the banks, is a big player in the system of organized crime that is capitalism. Drug companies live on taxpayer-funded research and government-granted monopoly rights in the form of patents.
The $80 billion pledge in cost reductions by pharmaceutical giants over a 10-year period for a national health care plan is a pittance compared to what the drug companies can rake in by setting their own prices. A glance at the Fortune 500 list confirms that the drug companies indeed make tens of billions of dollars per year .
The claim that they need their vast profits to research cures for cancer and other diseases is false. U.S. drug makers spend more on marketing and administration than they do on research—2.5 times more .
Most prescription drugs marketed by industry leaders are developed in university or small biotech labs, or in public-sponsored research labs like the National Institute of Health where taxpayers foot the bill. The drug companies come in late in the process of development and pay for part of the expensive—but largely uncreative—final stages. In return, they own the exclusive rights to manufacture the drug. They then sell it back to the public at inflated prices.
The patenting system puts medicines beyond the reach of poor and sick people. Patent holders for retroviral drugs used in the treatment of HIV and AIDS went to court to stop the post-apartheid government of South Africa from producing cheap, life-saving generic equivalents. Generics would cost only $100 a year, but drug companies wanted the South African government to either pay $10,000 a year for the branded version or just do without. Similar hurdles were created to block production of a less expensive version of Tamiflu .
Why is the pharmaceutical industry allowed to rake in ever-increasing profits? Because, together with the makers of medical devices and other medical-related products, it spends millions a year on federal lobbying—in 2007, the figure was nearly $200 million. Leading the pack of big spenders is PhRMA . This is par for the course under capitalism: The large corporations are really the ones calling the shots in Washington.
Cuba shows another way
In contrast, Cuba’s pharmaceutical industry is not controlled by corporate monopolies driven by profit maximization making secret deals behind closed doors. Rather, centralized planning and social ownership of the means of production have allowed Cuba to prioritize health care.
Cuba is a leader in the production of cheap generics, providing medicines as well as production assistance to countries that might have otherwise been deprived of much-needed drugs. As of July 2008, Cuba had joint ventures with South Africa, India and China, and technology transfer agreements with Brazil and Iran. In addition, it had worked out joint development deals with Venezuela, Vietnam, China and other countries .
Not only that, Cuba is also a leader in pharmaceutical innovation. The discovery of a new hepatitis B vaccine in the late 1980s helped control the disease at home and in other Latin American countries. In 2002, Louis Baretta, head of a major Canadian pharmaceutical, said that Cuba’s work on a hepatitis vaccine was likely to become “the standard for the rest of the industry .” Just last year, Cuba registered a therapeutic vaccine for the treatment of advanced lung cancer—the first ever in the world .
These achievements fly in the face of the U.S.-imposed blockade that has brought so much suffering for the people of Cuba. A for-profit health care system could not have done this. Socialist central planning has made it all possible.
Health care is a basic human right. Pharmaceutical and health insurance corporations make a killing by letting others die. Enough of the backroom deals of this criminal system. Profits have no place in the health care debate. Free, universal health care now!
