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The White House Makes a Deal


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"I'm going to have all the negotiations around a big table. We'll have doctors and nurses and hospital administrators. Insurance companies, drug companies -- they'll get a seat at the table, they just won't be able to buy every chair. But what we will do is, we'll have the negotiations televised on C-SPAN, so that people can see who is making arguments on behalf of their constituents, and who are making arguments on behalf of the drug companies or the insurance companies. And so, that approach, I think is what is going to allow people to stay involved in this process."

--Barack Obama, August 21, 2008

On July 7, 2009, representatives from the Pharmaceutical Research and Manufacturers of America (PhRMA) visited the White House. They walked out having met with top administration officials to conclude months of negotiations over the pending health care bill.

None of these negotiations were on C-SPAN. In fact, the White House would not even admit the extent of their involvement in the deal. Publicly, the agreement was portrayed as one between the Senate and PhRMA. Privately, the White House orchestrated the deal.

Over the past two months, the House Energy and Commerce Committee has released a series of e-mails from PhRMA detailing the negotiations and final deal that led the organization to throw their full support behind the bill that eventually became the Affordable Care Act.

So, how much did PhRMA's seat at the secret negotiating table cost? The industry agreed to contribute approximately $80 billion over ten years to health care reform, including providing discounted drugs to help close the Medicare "doughnut hole." In exchange, the White House and Senate Finance Committee would not allow the enactment of a number of policies PhRMA opposed, such as price controls in Medicare Part D.

In addition to these policy agreements, PhRMA agreed to contribute up to $150 million for pro-Obamacare advertisements. You probably don't remember hearing or seeing very many ads from the drug companies. The reason is because PhRMA funneled nearly $70 million to third party organizations that could spend unlimited corporate money on advertising with little public disclosure.

AKPD Message and Media, a firm with extremely close ties to the White House, produced these ads. The "A" in AKPD Message and Media stands for David Axelrod, one of the president's top political strategist. While Axelrod sold his shares to work in the White House, during the time PhRMA was paying for ads AKPD still owed him $2 million.

The White House wasn't just coordinating advertisements funded by PhRMA. The committee also uncovered e-mails from the White House attempting to direct campaigns paid for by the AFL-CIO and AARP. Astonishingly, an e-mail revealed that AARP was throwing their support behind the bill despite the fact that calls into the organization opposing the bill outnumbered supportive calls 14 to 1.

It wasn't just the public who was left in the dark about the negotiations between PhRMA and the White House; Democratic leaders in the House were also ignored. At the time, Energy and Commerce Chairman Henry Waxman was working to include some of the very provisions the White House agreed to oppose.

Ultimately, what PhRMA wanted was included in the Senate bill, which passed by a single vote. This bill was then rammed through the House by a narrow margin of victory. The same special interests group that President Obama singled out and demonized during his election helped the White House usher through a bill so divisive that the majority of Americans continue to reject it two years later.

You don't hear the president talk about his signature piece of legislation anymore. You certainly don't hear him say he kept his promises of openness and transparency. Just three days after the handshake agreement in the White House, Politifact declared the president's promise to televise health care negotiations "broken."

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