Why is the drug industry praising Hagan?

As Adam Searing noted in a previous post, the drug industry lobbying group PhRMA is running ads supporting Senator Kay Hagan. Although I haven’t seen these ads, they allegedly praise Hagan for supporting a public option. What’s going on here? PhRMA says that it opposes a public option.

I’m no expert on the secret motivations of the drug industry. As I wrote yesterday, Glaxo publicly says that it wants to be a constructive partner while also funding anti-reform right wing noise factories.

I suspect that the drug industry is still trying to curry favor with legislators in swing states. Also, PhRMA may believe that some sort of public option is inevitable, and it wants the weakest plan to prevail.

Hagan really does deserve credit for endorsing a public option, even though it’s not the strong public option I would like to see. There are worse public option ideas circulating in the Senate, like the terrible cooperatives plan. But the public option that came out of Hagan’s committee is much, much weaker than the public option proposed by the House.

The public option from the Senate committee on which Hagan serves is not open to everyone — only the uninsured. It is run by Health and Human Services and will not join with Medicare for bargaining power. Keeping the public option separate from Medicare will check the bargaining power of these programs in negotiations with drug companies.

I would guess that the one result that frightens PhRMA the most is a public plan teaming up with Medicare to drive down drug prices. Hagan isn’t endorsing that idea, and that is probably why the industry is praising her.


  1. Lou Meyers

    July 15, 2009 at 6:16 pm

    How can a “public option” that is only available to the uninsured be a true public option? Call it what it is——an option for the uninsured —-or more precisely, a stealth windfall for the health insurance companies.

    Those of us that feel we are getting ripped off should be allowed to opt out of our existing plan. This will shore up the public plan and increase it’s chance of success.

  2. Shaun

    July 15, 2009 at 8:28 pm

    It’s because she co-sponsored an amendment to keep patent protection for biologics at 12 years. It’s the same amendment that Ted Kennedy has been sponsoring for years. You’ve gotta admire Hagan’s ability to get her name on an established amendment like that!

  3. AdamL

    July 16, 2009 at 9:50 am

    Thanks for comments — I didn’t realize she was on the 12 years of patent protection amendment. I’m still not sure why that would make drug companies praise her specifically for supporting a public option. Maybe they want the patent protection more than they want to kill the public option.

    Good point Lou. It wouldn’t provide real competition b/c it’s not open to everyone. That’s why I would prefer the House plan.

  4. gregflynn

    July 16, 2009 at 10:18 am

    I don’t have the video but I have seen the ads and captured some stills posted at BlueNC

    Ostensibly an ad thanking Hagan for actions on healthcare reform the ad contains the same coded language about doctors and patients that is the nod and wink to signal PhRMA’s opposition to a public option as part of healthcare reform.

    From everything I have seen PhRMA likes the Senate proposals only to the extent that they are malleable and can be shaped in PhRMA’s favor. While “praising” Senate moderates they’ll be attacking less pharma-friendly House proposals.

  5. AdamL

    July 16, 2009 at 10:21 am

    Thanks Greg — Does it specifically praise Hagan for supporting the public option?

  6. gregflynn

    July 16, 2009 at 10:44 am

    It does not specifically use the phrase “public option”. It praises her for action on reform using general language, segues into the coded patient/doctor language and asks people to call to “thank” her.

  7. AdamL

    July 16, 2009 at 10:51 am

    That makes sense. So basically they are trying to suck up to her for support on things like patent protection. And they are probably hoping that she will at least stick to the Senate version of the public option.

  8. gregflynn

    July 16, 2009 at 12:08 pm

    Interesting exchange in 2006 in response to 2005 article by Donald W Light and Joel Lexchin in British Journal of Medicine.
    Foreign free riders and the high price of US medicines

    It is the drug companies that make people think that their huge R&D budgets are devoted to “innovation,” when most of it goes to developing or testing new molecules discovered by others. An example of such claims is found on the PhRMA website: “America’s research-based biopharmaceutical companies are committed to continuing and expanding innovative research and developing new and better medicines and treatments.” Such statements create quite a different and misleading impression than can be supported by the facts we cite including our analysis which shows that the pharmaceutical industry devotes a net of about 1.3 cents per dollar of sales to basic research.

    NIH basic research contributes much more to discovering valuable new drugs than Reilly and Smith indicate, because that research identifies the most promising biological targets. Without them, drug companies are like someone in the dark with a large ring of keys (the millions of molecules in their data banks) but unable to find the keyhole.

  9. T. Hill

    July 16, 2009 at 7:13 pm

    Senator Hagan knows the devil is in the details, and she sweats them each and every one. That may not be enough of a knee jerk for the far left or the far right, but I believe she has the best interests of NC in mind as she dutifully keeps crafting away toward a working plan that protects Americans without destroying our economy.

    For example: http://projects.newsobserver.com/under_the_dome/hagan_excludes_migrants_from_health_care_bill

    It’s just common sense, but that’s the hardest thing to get out of a committee full of politicians.

    If you’re going to praise anyone in this debate, Kay Hagan certainly deserves it.

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