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Pharma gets less than it bargained for

Roll of bills pours out pills.

TEXT OF STORY

Kai Ryssdal: President Obama was out and about pitching his health care overhaul today. As it happens he was in Ohio this time. But that doesn't really matter much. Even if the president never does make it to wherever you are, you're going to be hearing plenty about health care reform this week. Millions of dollars worth -- both for it and against it -- on television, radio and in the papers.

Health care is on track to be a record-breaker for the amount of ad money spent on a single issue -- more than $200 million in 2009 and counting. A huge chunk of that cash has come from the pharmaceutical industry.

Gregory Warner reports from the Marketplace Health Desk at WHYY in Philadelphia that big Pharma may be getting a lot less than it paid for.


GREGORY WARNER: President Obama made a handshake deal with the pharmaceutical industry last year. The administration would limit industry concessions to just $80 billion over 10 years to help pay for reform.

In return, the drug industry would support the Senate health care bill and spend as much as $150 million on advertising in favor of it. With TV ads like this one....

TV AD: If I get sick, really sick, and gotta be hospitalized or something, I stand a chance of losing everything! I think Americans deserve better. This is one promise the politicians have to keep.

Jack Calfee is with the American Enterprise Institute in Washington.

JACK CALFEE: The ads conveyed an impression that reform was almost certain to happen this time even though it failed so miserably in 1993.

Back then, the industry used all its might to campaign against Bill Clinton's reform bill.

So what about that deal that Big Pharma made, for $80 billion in cuts? The latest version of the health care reform bill has that up to $90 billion.

Robert Goldberg is with the Center for Medicine in the Public Interest.

ROBERT GOLDBERG: And it doesn't make a difference whether the industry agrees to it or not. It's already in the bill.

He says the drug industry could end up paying a lot more as the House and Senate try to reconcile their bills for a vote expected later this week. And he says if reform does not pass, Congress will still be looking for ways to bring down the cost of health care. By making cuts the drug industry tried to avoid, like a bill that would allow Medicare to bargain for cheaper drug prices.

In Philadelphia, I'm Gregory Warner for Marketplace.

About the author

Gregory Warner is a senior reporter covering the economics and business of healthcare for the entire Marketplace portfolio.

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