What Did $80b Buy PhRMA?

On May 31 the Republicans on the House Energy and Commerce Committee released a report and associated emails reviewing the negotiations between the pharmaceutical trade group (PhRMA) and the White House in developing terms of the ACA. While the Republicans are trying to ‘count coup’ by pointing out the lack of promised transparency, what is more interesting is the business decision process by PhRMA.

What PhRMA Gave Up

The advertised number is that PhRMA agreed to $80b in rebates to provide ‘savings’ in the ACA. This a hard number, not a percentage, not changeable due to usage or pricing.

In addition, PhRMA agreed to helpful advertising, Harry and Louise are for reform this time.

What PhRMA Gained

In return, PhRMA got an agreement that the WH would not support price negotiation in Medicare Part D, and that the WH would block efforts to allow the importation of overseas drugs.

In short the WH agreed to no cost control for pharmacy expenses in healthcare in return for a number to claim savings in the ACA.

Best ACA Related Quote Ever

Quote from PhRMA VP Bryant Hall email (slightly expurgated):

“But the WH is f***ing this up. These guys deal w the numbers like they’re real. It isn’t smart”


The political calculation of this deal is interesting. Did PhRMA believe that if they didn’t support the ACA that is would pass anyway? And, if that happened they would be subject to price negotiation pressure fro CMS?

And regardless of the SCOTUS ruling on the ACA will PhRMA be under pressure from Republicans in Congress for the their support of the ACA?