The pharmaceutical industry is beginning to wade into the 2010 midterm elections in support of those that helped to preserve a deal crafted by the White House to secure the industry's support for the health care reform bill that President Barack Obama signed into law in March.

The first advertisements are appearing in support of Senate Majority Leader Harry Reid, according to The Washington Examiner's Tim Carney.

Here's the ad:

In 2009, the White House met with leaders from the pharmaceutical industry and their lobbyist in Washington to determine what could be done to get the industry to support the administration's health care reform efforts. Ultimately, a deal was reached whereby the drug companies would support the bill through advertising and lobbying and the White House and Congress would ensure that cost-savings extracted from the industry would not top $80 billion or include certain provisions including the re-importation of drugs and providing Medicare with negotiating authority over prescription drug plans. (For the full story on the deal click here.)

Reid successfully shepherded the health care reform bill, with the pharmaceutical industry deal intact, through the Senate despite criticism coming from different wings of the Democratic Party.

Throughout the process Reid mobilized Democrats to block efforts to alter the terms of the deal between the White House and the pharmaceutical industry.

In the Senate Finance Committee, three Democrats sided with Republicans to block an amendment that would have fully closed the donut-hole in Medicare Part D prescription drug coverage.

When the bill came to the floor for a vote Reid successfully whipped Democrats to vote against an amendment that would have provided for the re-importation of drugs from first-world countries, a provision that Democrats had long supported and campaigned on. The amendment failed with many Democrats voting against it.

Reid has received more than just television advertising support from the pharmaceutical industry. According to the Center for Responsive Politics, Reid has received $361,850 in campaign contributions from the pharmaceutical industry over the course of his career.

Fifty-four percent of that total--$198,450--came from contributions made in 2009 and 2010.

As the Examiner's Carney points out, Reid is the second leading recipient of pharmaceutical campaign contributions for 2009-2010. A large number of the contributions were made around the time of key events in the crafting of the deal between the White House and the drug companies.

Concessions to the pharmaceutical industry were added to the reconciliation bill after the industry agreed to provide additional savings requested by President Barack Obama. According to the Associated Press, Senator Max Baucus stated in an interview that the pharmaceutical industry agreed to provide an additional $10 billion to cover the coverage gap in Medicare Part D known as the "donut hole" in exchange for eliminating the expansion of drug discounts at certain health facilities initially included in the Senate health care bill.

The Senate health care bill would have expanded drug discounts under a Medicaid program that serves over 14,000 covered facilities. The Medicaid 340B program provides outpatient discounts on brand name drugs to a variety of health facilities that serve low-income communities. The provision removed in the reconciliation bill would have expanded access to the discount program to cover inpatient drug purchases. While the inpatient expansion was eliminated in reconciliation, an increase in the kinds of covered health facilities remained.

Last year, the pharmaceutical industry negotiated a behind-the-scenes deal with the White House and Sen. Baucus to limit the savings sought from the industry in the health reform bill to $80 billion. The deal involved the White House and Baucus to not pursue long-sought-after Democratic policies including allowing the government to negotiate for lower drug prices in the Medicare drug program and the reimportation of drugs from first world countries. The pharmaceutical industry would, in return, support the legislation through advertising and grassroots means. The industry ultimately spent upwards of $100 million on advertising to support passage of the legislation.

The extra money to fill the "donut hole"--a coverage gap in the Medicare prescription drug program--was proposed by the White House in the run-up to the Blair House Summit. The Washington Post reported at the time that industry lobbyists were not enamored with this new proposal, "PhRMA, which agreed to $80 billion in cuts in exchange for protection from other steps, has concerns about Obama’s proposal to add another $10 billion to that amount."

The industry had already beaten back the expansion of the 340B drug discount in earlier negotiations with the House of Representatives. The initial Tri-Committee House health care reform bill contained the same expansion that was included in the Senate bill, but was removed in November when the final version of the legislation was introduced and voted on. At the time, other industry leaders voiced their concerns over the exclusion of the expansion of coverage. The American Hospital Association (AHA) stated that the discount should be added to the bill later on: "Lawmakers also should restore a provision that would expand the outpatient 340B drug discount program to inpatient services for all eligible hospitals."

The Congressional Budget Office (CBO) projected that the expansion of 340B drug discounts to inpatient services would save hospitals $1 billion annually and Medicaid $1.7 billion over ten years.

Last we left off in the story of the White House-PhRMA deal the White House had made new cost cutting proposals that would affect the pharmaceutical industry. PhRMA has since put out a press release that doesn't really answer many questions about where they stand. This was before last week's health care summit:

“We remain committed to health care reform done in a fair and smart way. We continue to believe that all Americans should have access to high-quality, affordable health care coverage and services.

“Throughout the health reform debate, America’s pharmaceutical research and biotechnology companies have supported proposals aimed at encouraging critically important medical research and innovation to improve the lives of patients and foster a successful life sciences sector, which supports millions of American jobs.

“We will be carefully reviewing the proposal and look forward to hearing the discussions at Thursday’s White House summit on health care reform.”

The Washington Post reports that their lobbyists are working to block the additional $10 billion in cost cutting proposed by the administration, while still remaining supportive of the Senate bill:

The Pharmaceutical Research and Manufacturers of America (PhRMA), the powerful drugmaker lobbying group, is holding back on ads for now but will continue to work closely with lawmakers and the White House on specific issues, one senior industry official said. PhRMA, which agreed to $80 billion in cuts in exchange for protection from other steps, has concerns about Obama's proposal to add another $10 billion to that amount, the official said.

Of course, the major key is the cessation of advertising by the group. PhRMA just isn't willing to put any more money on the line with so much ambiguity regarding the outcome.

This morning the White House released a new health care proposal that may be used as a blueprint for a compromise between House and Senate versions of reform. This new proposal will likely not find a receptive audience at the Pharmaceutical Research and Manufacturers of America (PhRMA)--the chief lobbying arm of the pharmaceutical industry.

Throughout 2009, PhRMA and major pharmaceutical companies crafted a deal with the White House to limit cost cutting by the industry in exchange for the industry's support, through over $100 million in television advertising, for health care reform. (The entire story behind the crafting of the deal can be read here.) The White House's new proposal contains deeper cost cuts than previously agreed to and contains regulations on the relationship between brand-name and generic drug companies that the industry opposes.

The deeper cost cuts come from an attempt to further close the "donut hole" in the Medicare Part D prescription drug program. The “donut hole” refers to the gap in coverage that occurs within Medicare Part D. For those purchasing prescription drugs through the program coverage cuts off at $2,700 spent and does not pick back up again until $6,154 is spent by the participant. The current language that was struck in the deal between the White House and the pharmaceutical industry maintains that drug companies would cover 50 percent of the cost for brand-name drugs for participants falling in the "donut hole." This change would be implemented within the year. The White House's new proposal would eliminate the "donut hole" by 2020 by making participants pay only 25 percent coinsurance with Medicare covering the other 75 percent. The White House also takes a page from the House health reform bill by providing a $250 rebate to Part D participants who fall into the "donut hole." (The House bill provides for a $500 reduction in costs for participants who fall into the "donut hole.")

Another piece of the proposal would allow the Federal Trade Commission (FTC) to regulate the interactions between brand-name and generic drug companies. At issue is the revelation that brand-name drug companies have been paying off generic drug companies for support on patent extensions for certain drugs. This means that consumers will see serious delays in the release of certain generic drugs and therefore still face the higher costs of brand-name drugs. The FTC is filing suit against the drug companies to end this practice and the White House proposal aims to give the FTC authority to regulate and end this practice. The summary of the proposal states that the White House would, "[make] anti-competitive and unlawful any agreement in which a generic drug manufacturer receives anything of value from a brand-name drug manufacturer that contains a provision in which the generic drug manufacturer agrees to limit or forego research, development, marketing, manufacturing or sales of the generic drug." The White House claims that payouts to generic drug companies cost consumers up to $35 billion over the next ten years.

PhRMA and the brand-name drug companies backing it are adamantly opposed to FTC regulation of payouts to generic companies. A previous statement from PhRMA states:

Patent settlements between brand-name and generics companies can resolve expensive patent disputes to help foster innovation and improve access to medicines so that patients can live healthier, more productive lives.

Law and public policy have always favored settlements, including patent settlements. PhRMA continues to believe that legislation that would impose a blanket ban on certain types of patent settlements or otherwise prevent them could decrease the value of patents and reduce incentives for future innovation of new medicines. This is also unnecessary because the Federal Trade Commission (FTC) and others already have the authority to review and evaluate any patent settlement agreement between a brand name company and a generic company. The courts and enforcement agencies like the FTC are in the best position to review these settlements on a case-by-case basis to ensure that they are not harmful to competition. By imposing a general ban or imposing harsh disincentives, pending legislation would effectively remove the decision-making process from this appropriate venue.

After health care negotiations stalled in January, PhRMA President and CEO Billy Tauzin abruptly resigned. Media reports on his resignation have varied from differences in style that displeased the Board of Directors and displeasure with the failure of the deal struck with the White House to be adopted after a $100 million-plus advertising binge in support of the legislation. Since Tauzin's departure, board members have continued the refrain that they will back the Senate legislation that contains the $80 billion cost cutting cap agreed to in the deal. PhRMA has yet to release a statement on the White House's apparent abandonment of the previously agreed upon deal.

More than a million spectators gathered before the Capitol on a frosty January afternoon to witness the inauguration of Barack Obama, who promised in his campaign to change Washington’s mercenary culture of lobbyists, special interest influence and backroom deals. But within a few months of being sworn in, the President and his top aides were sitting down with leaders from the pharmaceutical industry to hash out a deal that they thought would make health care reform possible.

Over the following months, pharmaceutical industry lobbyists and executives met with top White House aides dozens of times to hammer out a deal that would secure industry support for the administration's health care reform agenda in exchange for the White House abandoning key elements of the president's promises to reform the pharmaceutical industry. They flooded Congress with campaign contributions, and hired dozens of former Capitol Hill insiders to push their case. How they did it—pieced together from news accounts, disclosure forms including lobbying reports and Federal Election Commission records, White House visitor logs and the schedule Sen. Max Baucus releases voluntarily—is a testament to how ingrained the grip of special interests remains in Washington.

In the 2008 campaign, Obama declared his intention to include all stakeholders as he sought to reform the nation's health care system, but also supported key Democratic health reform policies. Among these were several that targeted the pharmaceutical industry: Allowing re-importation of drugs from first world countries with lower drug prices and providing Medicare with negotiating authority over prescription drug prices in the recently enacted Part D program. These weren't just promises, Obama had already voted for both of them as a senator in 2007. (Roll Call Vote 132 and Roll Call Vote 150.)

Set to carry out this agenda were two Capitol Hill veterans, schooled in the monied Washington culture, chief of staff Rahm Emanuel and deputy chief of staff Jim Messina. Emanuel was a former fundraiser, Clinton administration official, investment banker and member of the Democratic leadership in Congress. Messina was the former campaign manager and chief of staff to the powerful Senate Finance Committee chairman Max Baucus. Both were known for their unparalleled legislative abilities.

Because of Obama's decision to develop a plan operating through the legislative process, members of Congress also played key roles. Early on, the pharmaceutical companies were told to deal directly with Senate Finance Committee chairman Max Baucus. Baucus would be the vehicle for the deal worked out behind the scenes by the White House and PhRMA.

Central to this effort was PhRMA president, CEO and top lobbyist Billy Tauzin, a longtime Democratic member of Congress who switched party affiliations after Republicans gained control of Congress in 1994. By switching parties Tauzin was able to maintain his influence and even rose to be Chairman of the House Committee on Energy & Commerce. Tauzin became the poster child of Washington’s mercenary culture. He crafted a bill to provide prescription drug access to Medicare recipients, one that provided major concessions to the pharmaceutical industry. Medicare would not be able to negotiate for lower prescription drug costs and reimportation of drugs from first world countries would not be allowed. A few months after the bill passed, Tauzin announced that he was retiring from Congress and would be taking a job helming PhRMA for a salary of $2 million.

Tauzin’s job change became fodder for a campaign ad that then presidential candidate Barack Obama ran in the spring of 2008 simply titled “Billy.” It featured the candidate, sleeves rolled up, talking to a salon of gasping Americans about the ways of Washington. “The pharmaceutical industry wrote into the prescription drug plan that Medicare could not negotiate with drug companies. And you know what, the chairman of the committee, who pushed the law through, went to work for the pharmaceutical industry making $2 million a year.” The screen fades to black to inform the viewer that, “Barack Obama is the only candidate who refuses Washington lobbyist money,” while the candidate continues his lecture, “Imagine that. That's an example of the same old game playing in Washington. You know, I don't want to learn how to play the game better, I want to put an end to the game playing.”

Aiding PhRMA in their outreach to Congress would be a squadron of lobbyists to push their health care reform priorities. Over the course of 2009, the drug industry trade group spent over $28 million on in house and hired lobbyists. Aside from PhRMA's massive in-house lobbying operation, the trade group hired 48 outside lobbying firms. The total number of lobbyists working for PhRMA in 2009 reached 165. Some 137 of those 165 lobbyists representing PhRMA were former employees of either the legislative or executive branches. Of these dozens were former congressional staffers including two former chiefs of staff to Max Baucus.

According to data compiled by the Center for Responsive Politics, drug makers contributed huge sums to congressional campaign committees during the same period—from January to the end of October (4th quarter numbers are still being totaled), industry political action committees, employees and their family members flooded lawmakers with over $8 million. Those contributions tilted heavily to Democrats over Republicans by a 57 to 42 percent margin—the first time in any election cycle going back to 1990, the first year that the Center for Responsive Politics began tracking industry giving, that Democrats were so favored. Given their majorities on Capitol Hill, and the new President’s intention to reform America’s health care system, the new tilt was perhaps not surprising.

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Key Meetings Between White House, Max Baucus and Pharmaceutical Companies [click here for a visual timeline]
March 5, 2009	Billy Tauzin, President & CEO of PhRMA and Jeff Kindler, CEO & Chairman of Pfizer, chairman-elect of the Board of PhRMA	White House
April 20, 2009	Kevin Sharer, CEO of Amgen	Sen. Max Baucus
April 20, 2009	Kevin Sharer, CEO of Amgen	White House
May 7, 2009	David Brennan, CEO of AstraZeneca, Chairman of Board of Directors of PhRMA	Sen. Max Baucus
May 8, 2009	David Brennan, CEO of AstraZeneca, Chairman of Board of Directors of PhRMA	White House
May 19, 2009	Billy Tauzin, President & CEO of PhRMA and James Hall, PhRMA lobbyist	White House
June 2, 2009	Billy Tauzin, President & CEO of PhRMA; James Hall, PhRMA lobbyist; Kevin Sharer, CEO of Amgen; Jeff Kindler, CEO & Chairman of Pfizer, chairman-elect of the Board of PhRMA; Miles White, CEO of Abbott Laboratories	White House
June 2, 2009	Billy Tauzin, President & CEO of PhRMA; Kevin Sharer, CEO of Amgen; Jeff Kindler, CEO & Chairman of Pfizer, chairman-elect of the Board of PhRMA; Miles White, CEO of Abbott Laboratories	Sen. Max Baucus
July 7, 2009	Billy Tauzin, President & CEO of PhRMA; Kevin Sharer, CEO of Amgen; Jeff Kindler, CEO & Chairman of Pfizer, chairman-elect of the Board of PhRMA; Miles White, CEO of Abbott Laboratories (David Brennan, CEO of AstraZeneca, Chairman of Board of Directors of PhRMA is also listed in visitor logs for an appointment date)	White House (Deputy Chief of Staff Jim Messina; Chief of Staff Rahm Emanuel and Max Baucus' chief of staff Jon Selib are scheduled to meet at the same time; Independent reports place Emanuel in the meeting)

On March 5, the White House held a meeting with major health care industry leaders to try to bring them to the table and see what could be done to gain their support. In attendance were Billy Tauzin, president, CEO and top lobbyist for PhRMA, Pfizer CEO Jeff Kindler, America's Health Care Plans (AHIP) Chairman Karen Ignani, Tom Donohue of the Chamber of Commerce and Robert Wood Johnson Foundations’ Risa Lavizzo-Mourey. A day before the White House meeting Tauzin appeared on CNBC touting health care reform and promising to work closely with the Obama administration. In the interview he touted it as an “optimistic plan”, acknowledging that the industry did have a few problems but was glad to have a chance to discuss these. Some were caught dumb-founded by this apparent change of heart on behalf of an industry long adverse to health care reforms.

On April 15, Jim Messina and Jon Selib, chief of staff to Senate Finance Committee chairman Max Baucus, convened a meeting at the headquarters of the Democratic Senatorial Campaign Committee (DSCC) with leaders of organized labor and health care groups, including PhRMA. At the meeting, the groups decided to form two nonprofit entities to promote reform efforts, Healthy Economy Now and Americans for Stable Quality Care, that would be almost entirely funded by PhRMA. The two groups spent $24 million on their advertising campaigns; the contract to produce and place ads went to White House Senior Advisor David Axelrod’s former firm, AKPD, which owed Axelrod $2 million.

In the next month, CEO’s from pharmaceutical companies would meet with Baucus and administration officials at least four times. These talks preceded a major public event at the White House, one critical to its strategy to promote health care reform. On May 11, PhRMA and other trade industry groups pledged cost cutting measures to the White House that would save, they claimed, upwards of $2 trillion over the next decade. President Obama announced the deal in the State Dining Room, flanked by leaders of the various trade groups; the administration followed up with a media blitz in the press and on the White House Web site.

The next day, Healthy Economy Now's PhRMA funded ad campaign ran their first advertisement in support of the health care reform process calling for the government to finally “fix” the nation's health care cost problems. While many elements of the $2 trillion cost cutting pledge fell apart, the drug industry remained committed to the process in the hopes that they could ultimately win out and defeat the provisions they most feared in closed-door meetings with the White House.

The first occurred on June 2. White House visitor logs show PhRMA’s top executives, including Tauzin, and industry CEOs met with Sarah Fenn from the White House Office of Health Care Reform. On the same day, the publicly available schedule of Senator Max Baucus shows Tauzin and the same industry CEOs met the Senate Finance Committee chairman. What ultimately resulted from these coordinated meetings would be revealed by Baucus on June 20.

In a press release featuring a statement by Tauzin, Baucus revealed that the pharmaceutical industry had accepted $80 billion in cost cutting measures to be included in the Senate Finance Committee version of the bill. According to news reports, Baucus initially proposed $100 billion in cost cutting measures, but the executives and lobbyists meeting on June 2 were able to win the lower figure.

The terms of the initial cost-cutting deal included $30 billion go directly towards closing the “donut hole” in Medicare prescription drug coverage.  The “donut hole” is a term for the gap in coverage that occurs within the Medicare prescription drug coverage. For those purchasing prescription drugs through the Medicare program coverage cuts off at $2,700 spent and does not pick back up again until $6,154 is spent by the participant. The amount proposed in the deal, 50 percent coverage for drugs within the coverage gap, however, would not completely close the “donut hole.”

In Baucus' press release, Tauzin is quoted as saying, “This is a once-in-a-lifetime opportunity and, working together, we can make this hope for a better tomorrow a reality today.” This “once-in-a-lifetime” opportunity also extended to the pharmaceutical industry's ability to blunt the long-term Democratic agenda of lowering prescription drug prices through Medicare negotiations, re-importation and quicker release of generics onto the market. After making such a grand statement of support through cost cutting proposals it was time for the pharmaceutical industry to finally force the White House and Democrats to take certain chips off the table.

Baucus proceeded with a plan to convene a bipartisan group in an effort to craft the bill desired by the White House. These participants included Democrats Kent Conrad and Jeff Bingaman and Republicans Chuck Grassley, Mike Enzi and Olympia Snowe. Baucus' decision and the need to solidify deals with groups like the pharmaceutical industry – which were reliant on Baucus producing a bill – slowed down the legislative process making it impossible for Congress to meet the White House's announced August recess deadline for passing health care reform.

Soon after, PhRMA’s big guns and industry lobbyists paid the White House another visit on July 7 and this time met with Rahm Emanuel and Jim Messina (Baucus' chief of staff Jon Selib is also listed in White House visitor logs for this meeting). In August, The Huffington Post's Ryan Grim reported on an internal memo that was drafted at that meeting that outlined the policies that would not be allowed into any final version of health care reform. These included Medicare prescription drug negotiations, drug re-importation, and the lowering of prices for drugs available through Medicare Part D and Part B. The deal would be $80 billion in cost cutting and absolutely no more.

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While the $80 billion deal was cut with Baucus' committee, other congressional committees continued to mark-up their own versions of health care reform without the knowledge that the White House was relying on Baucus to produce the final product. In the House of Representatives, the House Energy & Commerce Committee leveled a direct threat to the $80 billion deal. Energy & Commerce Chair Henry Waxman sought to include all of the provisions that PhRMA had gotten the White House and Baucus to cut out of the reform bill. These included drug reimportation, Medicare negotiating power and speedier release of generics to the market. According to previous analysis of the measures proposed by the committee, these measures would have totaled hundreds of billions in cost cuts, far exceeding the $80 billion cap agreed to by the White House, Baucus and PhRMA.

The cost cutting measures passed in the Energy & Commerce bill spooked the board of PhRMA, which included all of the CEOs involved in the deal-cutting meetings with the White House and Baucus. The board pressured Tauzin to go public with the deal to ensure that the White House would recognize it and not renege. On August 4, the Los Angeles Times, in an exclusive report, featured quotes from Tauzin claiming that a deal between the White House and PhRMA existed and that, as Tauzin put it, “The White House blessed it.” Tom Hamburger wrote in the article, “For his part, Tauzin said he had not only received the White House pledge to forswear Medicare drug price bargaining, but also a separate promise not to pursue another proposal Obama supported during the campaign: importing cheaper drugs from Canada or Europe.”

The White House's Jim Messina later confirmed Tauzin's claim, stating, “The president encouraged this approach … He wanted to bring all the parties to the table to discuss health insurance reform.”

Democratic lawmakers were furious. Rep. Raul Grijalva, chairman of the Progressive Caucus, asked, “Are industry groups going to be the ones at the table who get the first big piece of the pie and we just fight over the crust?”

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On September 7, Baucus' bill made a private circulation on the Hill; pharmaceutical industry cost-cutting did not exceed $80 billion. Five days later, the New York Times reported that PhRMA planned to spend up to $150 million in an advertising blitz in support of Baucus' bill. The Times noted that the ad spending “…would be a follow-up to the deal that drug makers struck in June with Mr. Baucus and the White House.” On September 16, Baucus released the full text of his legislation to the public.

The White House, PhRMA and Baucus still had to fight a few battles to keep the deal intact. The key amendment targeting the PhRMA deal in committee mark-up came from Sen. Bill Nelson from Florida, which has one of the largest Medicare participant populations in the nation. The pull of constituent needs clearly put Bill Nelson into a position to push for further cost cutting in Medicare prescription drug pricing. His target: closing the “donut hole” completely.

Nelson claimed that his amendment would generate $106 billion in revenue, or from PhRMA's perspective increase their cost-cutting to $186 billion.  That would be unacceptable to PhRMA, to Baucus, to the White House and to the pharmaceutical industry who had made the deal. Other Senate Democrats, Tom Carper and Robert Menendez voted with Republicans and Baucus on the committee to defeat the amendment.  It is little surprise the Carper's Delaware is home to AstraZeneca and Menendez' New Jersey is home to Merck and Bristol-Myers-Squibb, all of which lobbied for the $80 billion cap.

Senate Majority Leader Harry Reid introduced the final bill, with the cap in place, on November 19. Debate began on Dec. 3, and with it come one more attempt by members to change the terms of the deal. Senator Byron Dorgan introduced an amendment that would allow for drug re-importation, but as the date for voting drew near, the Federal Drug Administration (FDA) released a letter objecting to the proposal that echoed pharmaceutical industry talking points: “…as currently written, the resulting structure would be logistically challenging to implement and resource intensive. In addition, there are significant safety concerns.” Dorgan's amendment was defeated with numerous Democrats previously in support of reimportation switching to "no" votes.

On Christmas Eve, the bill passed the Senate with the PhRMA deal fully intact.

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New Year's Eve passed with no further action on health care reform. Public opinion regarding the health care reform bill had been slipping throughout 2009. It reached a fulcrum in the special election to replace the deceased senator Ted Kennedy in Massachusetts on January 19, 2010. Newly minted senator Scott Brown campaigned that he would be the senator to provide Republicans with the votes to filibuster the final health care reform bill. Democrats ran for cover. Despite having the largest majorities of any party since the 1970s, Democrats put the brakes on their agenda, particularly health care reform.

In the end, the pharmaceutical industry's support for health care reform would be left up in the air. After spending $100 million in advertising in support of legislation that Tauzin and key executives hoped would be a windfall for the pharmaceutical industry, the legislative process had flat-lined. In February, the board of PhRMA, split over the deal cut by Tauzin, pushed Tauzin to resign his post.

In an interview with Diane Sawyer, President Obama owed up to failures in the process of passing health care reform, “[T]he health care debate as it unfolded legitimately raised concerns not just among my opponents, but also amongst supporters that we just don't know what's going on … And it's an ugly process and it looks like there are a bunch of back room deals.”

This Time article by Karen Tumulty and Michael Scherer is a must-read. Some key graphs:

[I]n the first six months of this year alone, drug and biotech companies and their trade associations spent more than $110 million — that's about $609,000 a day — to influence lawmakers, according to figures compiled by the nonpartisan watchdog group Center for Responsive Politics. The drug industry's legion of registered lobbyists numbers 1,228, or 2.3 for every member of Congress. And its campaign contributions to current members of Waxman's committee have totaled $2.6 million over the past three years.

The return on that investment has been considerable, both in the House and in the Senate. "We've done very well," says lobbyist Jim Greenwood, a former Republican Congressman from Pennsylvania who was a member of the Energy and Commerce Committee and now heads the Biotechnology Industry Organization (BIO). "We carried a majority of the Democrats and a majority of the Republicans in each of the committees, and by very clear margins."

Despite promises to reign in lobbyists, Congress and the White House have done little to affect the actual situation on the ground. The Obama administration has laid the ground work for what could be a promising new system for lobbying disclosure in their limited lurches at the lobbyist complex in Washington -- requiring disclosure of lobbyist contacts for bailout and stimulus funds. The current lobbyist disclosure system, however, does not seek to help the public or affect K Street, but instead is aimed at providing lawmakers with an up-to-date list of the people who keep calling their offices. Earlier this year, I wrote about the need for lobbyist contact disclosure. Here are some key graphs from that post to think about when you're reading the Time article on pharmaceutical lobbying:

Debate over previous lobbying regulation bills (the Federal Regulation of Lobbying Act of 1946, the Lobbying Disclosure Act of 1995, and the Honest Leadership and Open Government Act of 2007) acknowledged that the disclosure by lobbyists is not only due to the potential for corrupting activity, but because they serve an important role and their existence needs to be revealed, not only to the public, but for lawmakers and officials to better understand with whom they are meeting. In fact, the general thrust of the debate during consideration of the Lobbying Disclosure Act of 1995 surrounded the need for lawmakers to be informed of who they are meeting and discussing policy. While this has served the legislative need to know the bias of a caller, it has not served the public interest nor has it helped the factions and interests that hire lobbyists to better police each other.

...The reason why the disclosure of contacts is important is not because we are worried that lobbyists are engaging in a quid-pro-quo but because of associational bias. In her legal essay, St. John’s University law professor Anita Krishnakumar explains that, “…[T]he public perceives that lobbyists receive special face time with elected officials. Irrespective of where that face time occurs — in scheduled meetings, on a train ride, over a game of power, or on the golf course — it creates opportunities for lobbyists to persuade elected officials of their clients’ positions, opportunities that ordinary citizens do not have. In other words, the public’s concern is not just that elected officials will engage in blatant vote-selling to lobbyists, but, more subtly, that they will be partial to the causes of lobbyists’ clients because they spend a lot of time in lobbyists’ company.”

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The disclosure of lobbying contacts provides not only the public with a better view of which interests and factions are trying to influence outcomes, but it also provides a chance for those same interests and factions to view the actions of their opposition. If union officials are putting a full court press over the Employee Free Choice Act, business groups will be able to see which lawmakers they are targeting and can prepare a better response. Groups can help educate the public on which lawmakers are more supportive of their causes, or if they are in opposition. And some lawmakers, exposed by the sunlight, may find it in their interest to meet with more groups to not only provide a more bipartisan public record, but to also gain insight from a more diverse group of interests.

...

The need for a better system of lobbying disclosure, that increases registration and disclosure, is necessary to provide the public, interests and lawmakers with the information that actually matters and to provide the professional legitimacy that the lobbying industry needs.

CQ Politics reports that health care related PACs accounted for the top or second highest source of contributions for 15 of the top 18 congressional leaders in the House involved in the health care debate.

Apparently, the $80 billion cost savings that the pharmaceutical industry agreed to with the Obama administration came with a price. In return, the White House promised to protect the industry from further attempts to extract cost savings from them including allowing the government to negotiate drug prices. Now we know what those trips to the White House were all about.

The House Selecte Committee on Energy Independence and Global Warming is investigating the forged letters sent to three congressmen by a grassroots lobbying firm on behalf of the American Coalition for Clean Coal Electricity (ACCCE). ACCCE has been trying to distance themselves from Bonner & Associates, the firm in question, and has denounced the letters. In a new letter sent by Chair Ed Markey, ACCCE is questioned as to why they did not act on the forged letters after they discovered their existence on June 24, two days prior to the vote on the cap and trade bill.

A new hire by the State Department may exploit a loophole in the administration's lobbying ban.

The Washington Post has a useful interactive graphic to compare the various versions of health care reform in Congress.

Yesterday afternoon, the Center for Responsive Politics came out with a report showing how many congressional lawmakers have invested hundreds of thousands of dollars of their own money into companies that have financial stakes in which bills eventually pass and become law. CRP has found many lawmakers are heavily invested in pharmaceutical and health insurance companies, industries that are very interested in what Congress does to health care. Nearly one in four lawmakers had invested some money in health companies during 2007, the most recent year CRP calculated lawmakers' extensive personal finances. (In October, data for 2008 will be available in their personal financial disclosure database). Because lawmakers report the value of their assets in ranges, CRP can’t give exact figures. With that said, lawmakers had invested somewhere between $44.2 million and $93.9 million in health care related companies.

CRP looked closer at some of the key lawmakers who serve on the five committees that will have the most impact on the health legislation as it works through the Congress. Here’s what they found: In 2007, 54 current lawmakers serving on these committees had between $31 million and $57.9 million invested in health companies.

They quote Charles Silver, a University of Texas law professor who focuses on health care policy, saying that such investments in the past have shaped congressional debates, along with campaign contributions and the revolving door between the public and private sectors. CRP took a closer look at the investments of six of those lawmakers and asked their staff if they saw any conflict of interest. Check it out their responses here.

And if you want to see the health money going into the Senate health committee. Sunlight's new beta -- Congrelate.com -- makes that easy. Check it out

Unless you or a family member has suffered a serious illness, it's unlikely that you've run across the site ClinicalTrials.gov, run by the U.S. National Institutes of Health. Available since 2000 and enhanced by a 2007 law which requires more extensive reporting, this site contains a database of nearly 71,000 drug trials conducted by privately and publicly funded researchers in 50 states and 164 countries. The website gets 40 million page views per month and 50,000 visitors a day.

Using ClinicalTrials.gov easy-to-use search interface, you can type in a search such as "breast cancer AND Denver," or "asthma AND Pittsburgh" and get a list of relevant drug trials that are underway or have been completed. Thanks to the 2007 law, over a three-year period this information is being expanded to include information about actual results from these trials as well. This will help patients ferret out drugs that may be showing negative side effects.

This is a great resource, but does it have legs? Yes and no. The website does provide a way to obtain the data via XML feed, which would allow savvy programmers to mash it up with other information. However, you have to wade through several layers of the website to find instructions about how to do this. There's also a page for webcrawlers. There is no way, as far as I could tell, to get this information in other formats, such as tab delimited file. On the front page, there are no links to RSS feeds or social media sites, such as Facebook and Twitter.

Are there third parties out there that are taking this information, mashing it up, and making it better? Yes. TrialCheck at Cancertrialshelp.org, a nonprofit group, takes data from ClinicalTrials.gov and other sources and takes it a step further, by avoiding dense medical terminolgy and giving users the option of calling a clinical trial specialist at the American Cancer Society for more information about a particular trial. Visits to the website quadrupled in the last year, reports the Los Angeles Times.

Another intriguing idea was submitted to Netsquared.org last year--a graphic designer proposed taking data on breast cancer and mashing it up with other information to produce maps for patients where they could quickly find local support groups, treatment, screening centers and events.

On my own wish list would be to figure out a way to take these data and mash them up with information about lawmakers' districts, to see what drug trials are going on where. We already know that the pharmaceutical industry gives big bucks to federal candidates and parties and spends copiously on lobbying. Would lawmaker X be more likely to vote against stricter drug safety regulation if he has a big drug company sponsored trial going on in his district? Would it help explain why lawmaker Y is getting a flood of contributions from executives working with a particular out-of-district company? The data offered at ClinicalTrials.gov could help answer these questions.

Buried in the final conference report for the Department of Defense Appropriations Act, 2006 (H.R. 2863) was a provision providing a lawsuit liability shield for pharmaceutical companies. The provision was aimed at preventing lawsuits against drug makers working to create vaccines for biological attacks and avian flu, but went much further in protecting many more kinds of drugs. What's notable about this provision is that no one thought it would be in the bill. The conferees did not sign off on it and the final bill was passed in less than 24 hours, providing little time to address the late night addition of this provision. This is our next case study for the Read the Bill campaign.

During the first year of the 109^th Congress much attention was paid to the development of drugs to counter biological weapons and avian flu. The Bush White House supported the position that companies helping to create and manufacture such drugs should be exempt from liability lawsuits, in the event of side-effects, injury, or death. One proposal pushed by Sen. Richard Burr, the Biodefense and Pandemic Vaccine Drug Development Act of 2005, provided a vehicle to pass liability shields for the drug industry and also created a new government department to work on creating vaccines that would be exempt from liability lawsuits, FOIA, and other open government laws. Burr’s bill passed the relevant committee intact but sat still on the legislative calendar.

Instead of pursuing the passage of Burr’s bill, Senate Majority Leader Bill Frist sought to attach parts of the liability shield to the Defense Appropriations Act. The defense funding bill had already passed both chambers of Congress and awaited hearing before a conference committee. In the weeks leading up to the release of a conference report on the bill, Frist worked with drug industry lobbyists to craft and insert the liability shield language into the bill. The only problem was that they failed, initially.

On December 18, 2005, the conference committee met to hash out the differences between the House and Senate versions of the legislation. Upon completing the conference report both sides agreed to keep the liability shield language out of the bill and left the hearing room to announce the details to the public. In most cases, that would have been the end of it. Frist, however, was undeterred, and after the conferees left the hearing he sought Speaker of the House Dennis Hastert’s approval to insert the 40-page liability shield language into the completed report. Unbeknown to the conferees, the report would include the liability shield.

The next day, fewer than 24 hours after the final bill was released to the public, the House convened to vote on the bill. Rep. David Obey, one of the duped conferees, called the insertion of the shield a “blatantly abusive power play.” Sen. Robert Byrd, another conferee, declared it an “insult to the legislative process.” Rep. Dan Burton stated, “This kind of thing should not be done at 11 at night.” The bill passed the House on December 19 and the Senate on December 21.

It was later revealed that more than 100 lobbyists were working on the insertion of the liability shield language. Three of those lobbyists were former staffers of Sen. Bill Frist. One of those lobbyists was Speaker Dennis Hastert’s son, Joshua Hastert.