Why Medicare Can't Negotiate Lower Drug Prices

Billy Tauzin, Big Pharma's 30 Million Dollar Man

Written for FedUpNewYorkers.org

The easy movement between government jobs and corporate lobbying, known as the “revolving door,” doesn’t adequately describe the sleaziness of the influence peddling, legalized bribery and extortion that characterizes so much of today’s politics.

We’re mindful that appropriating the business model of the world’s oldest profession to describe elected officials who become corporate lobbyists is an indelicate metaphor, even an injustice to that profession. But political correctness must yield to political reality: Welcome to Whores Who Would Be Madams, a permanent feature of Fed Up New Yorkers.

While we accept responsibility for the title of this feature, we can’t claim authorship. A senior New York City Legal Aid Society trial lawyer, Martin Erdman, used the phrase to describe trial judges who, having demonstrated their preferences for law and order over the rights of the individuals who appeared before them, are often rewarded with appointment to higher courts. The appellate judges were furious. They made Erdman’s civil liberties point by threatening him with disciplinary action, even disbarment, unless he apologized and henceforth kept his opinions to himself. He apologized and shortly thereafter was appointed as a criminal court judge — though never a madam.

Tauzin_as_whore.jpgBilly Tauzin, our first madam, is a former Louisiana congressman. He was elected as a Democrat in 1980, but when the Republicans gained the majority in 1994, Tauzin switched parties.

The party-switching deal that he negotiated with House Speaker Newt Gingrich enabled him to keep his seniority, and Tauzin was soon chairing the House Energy and Commerce Committee. As such, he enjoyed great leverage over the pharmaceutical industry.

Readers may wonder at the dizzying array of congressional committees and subcommittees, more than 200 at last count. The proliferation of these oversight committees is attributed to the tremendous complexity of modern business and industry. But follow the money: The majority party collects bundles of it from the industries that fall within the jurisdiction of a committee or subcommittee. Moreover, the elected officials can transition to much higher-paying corporate lobbying jobs so long as they demonstrate a casual approach to regulation while they hold their government posts.

Establishing a meaningful regulatory regime while putative regulators are collecting campaign contributions and auditioning for a lobbying job is one of the more repugnant aspects of modern politics. Billy Tauzin’s story pulls back the curtain on this sordid scene.

In 2003, George W. Bush signed into law the Medicare Part D drug program, a massive windfall for the pharmaceutical lobby. Tauzin was the lead Republican on the bill. He blocked amendments that, among other things, would have allowed Medicare to use its purchasing power to negotiate lower prices and import cheaper drugs from Canada.

Shortly after the bill passed, Tauzin announced that he was leaving Congress and would be running the pharmaceutical industry’s major trade organization, Pharmaceutical Research and Manufacturers of America (PhRMA), with an annual salary of $2 million.

Rep. Louise Slaughter (D-NY): “The political process used to pass Part D was the worst abuse of the legislative process I have seen during my 20 years in Congress. ... The chairman of the Commerce Committee, Representative Billy Tauzin (R-La.), coauthored the bill while negotiating a $2-million-per-year job as a lobbyist for the Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry’s trade organization.”

Rep. Nancy Pelosi (D-CA CA ): “If you want to know the price of selling seniors down the river, it’s approximately about $2 million a year, if you want to hire the manager of the bill on the floor of the House of Representatives.”

Tauzin’s spokesman called it “sour grapes.”

In 2007, the Democrats added the “Tauzin rule” to the House ethics code. It bars a lawmaker from negotiating deals for future employment while still on the job. It’s worth noting that a prohibition of this practice had to be formally codified. So long as the motivation to fix the system is weak, and the negotiations to move onto the corporate payroll don’t leave any footprints, we doubt it will mean much.

Fast forward to President Obama’s health care reforms, elements of which would have allowed the import of drugs from first-world countries with lower drug prices and authorized Medicare to negotiate lower prescription drug prices in the Part D program.

Lobbyist Tauzin led the industry’s successful effort to block those reforms.

In 2009, the pharmaceutical industry had 165 lobbyists working for it, of which 137 were former employees of either the legislative or executive branche. Dozens were former congressional staffers, including two former chiefs of staff to Max Baucus, the lead Democrat in the Senate.

Between 2006 and 2010, Tauzin reported $19,359,927 in lobbying earnings. He left PhRMA in late 2010. They paid him $11 million in his last year.

There are so many wonderful Whores to Madams candidates in Albany, Washington and elsewhere! We invite you to submit your (fact-checked) candidate. We’ll look at all of the submissions and publish the least savory characters.

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