On Friday House Republicans released more documents that expose the collusion between the health-care industry and the White House that produced ObamaCare, and what a story of crony capitalism it is. If the trove of emails proves anything, it's that the Tea Party isn't angry enough.The long and short of it is that in return for industry support, including $80 billion in rebates, the Obama administration put language in the legislation that would prevent drug re-importation - the practice of importing back to the U.S. prescription drugs that were originally manufactured in the U.S. and exported for sale in another country such as Canada and Mexico. These drugs are often manufactured in the U.S., but price controls in countries like Canada keep the costs of prescription medications lower than the U.S. market prices. Re-importing drugs on a large scale would be devastating to pharmaceutical companies' profits and R&D.
Over the last year, the Energy and Commerce Committee has taken Nancy Pelosi's advice to see what's in the Affordable Care Act and how it passed. The White House refused to cooperate beyond printing out old press releases, but a dozen trade groups turned over thousands of emails and other files. A particular focus is the drug lobby, President Obama's most loyal corporate ally in 2009 and 2010.
The business refrain in those days was that if you're not at the table, you're on the menu. But it turns out Big Pharma was also serving as head chef, maître d'hotel and dishwasher. Though some parts of the story have been reported before, the emails make clear that ObamaCare might never have passed without the drug companies. Thank you, Pfizer.
The joint venture was forged in secret in spring 2009 amid an uneasy mix of menace and opportunism. The drug makers worried that health-care reform would revert to the liberal default of price controls and drug re-importation that Mr. Obama campaigned on, but they also understood that a new entitlement could be a windfall as taxpayers bought more of their products. The White House wanted industry financial help and knew that determined business opposition could tank the bill.
The WSJ notes that:
Crony capitalism undermines public trust in capitalism itself and risks blowback that erodes the free market that private companies need to prosper and that underlies the productivity and competitiveness of the U.S. economy. The political benefits of cronyism are inherently temporary, but the damage it does is far more lasting.Read the whole thing for an example of how an administration that promised us an end to this sort of collusion between government and business has been instead an eager practitioner of it.
As for Big Pharma, the lobby ... avoided some truly harmful drug policies — for now. But over the long term their products are far more vulnerable to the command-and-control central planning that will erode medical innovation [under Obamacare], and their $80 billion fillip is merely the teaser rate.