Drugmakers Push Free-Market System in Face of Obama's Health Care Reform

Drugmakers Push Free-Market System in Face of Obama's Health Care Reform

Drugmakers Push Free-Market System in Face of Obama's Health Care Reform
As the "first salvo in what likely will be a huge battle over health care reform during the Obama presidency," Pharmaceutical Research and Manufacturers of America (PhRMA) is launching a multimillion-dollar campaign that advocates for a free-market system in order to "undercut an expected push by the Obama administration for price controls of prescription drugs," reports the Washington Times.
President-elect Barack Obama's plan to allow the federal government to negotiate the price of drugs under Medicare could cost drug manufacturers $10 billion to $30 billion in annual revenues, according to the Boston Consulting Group. "If you start to take a pretty big price decrease out of that large market, it has an enormous impact on drug companies and really their ability to generate their type of shareholder return that they have had in the past," said Peter Lawyer of Boston Consulting. As a result, drugmakers could charge more for drugs overall and could have less money to spend on research and development, according to Lawyer.
The Washington Times compares the PhRMA campaign to the "Harry and Louise" TV ads that attacked President Bill Clinton's health care reform plan in 1993. "The lobbying group Health Insurance Association of America, which ran the ads, spent $10 million on the campaign," which was "widely credited as playing a key role in killing the plan." But PhRMA, the nation's largest pharmaceutical lobbying group, claims that its campaign does not criticize Obama's proposals but rather is "designed to make people aware of the importance of preserving your free-market health care system," said Ken Johnson, senior vice president of PhRMA.
Up until now, drugmakers have taken a "wait-and-see approach to Mr. Obama's pending health care reforms." In fact, they gave more than $1.6 million to the Obama campaign, which is almost triple the amount given to the Republican contender, Sen. John McCain (R-Ariz.). PhRMA also recognizes that "some reforms are needed in order to keep that system vibrant," according to Johnson. Still, the organization's expensive public relations campaign "indicates that the industry is leaving nothing to chance," reports the Times. (Lengell, Washington Times, 11/14/08)