GOP report explains how the (ACA) sausage got made

Report details extensive negotiations with PhRMA

Topics: Health Policy, Market Trends, Strategy, Payer and Regulatory Policy

June 1, 2012

House Republicans on Thursday released a memo and supporting documents detailing a 2009 deal reached by the Obama administration and the pharmaceutical industry to ensure the passage of the Affordable Care Act.

How the White House got stakeholders on board with ACA

As Democrats in 2009 worked to draft and pass the federal health reform law, the White House reached an agreement with many of the major health care interest groups—including the American Hospital Association and the Pharmaceutical Research and Manufacturers of America (PhRMA)—to slash $2 trillion from national health care spending over a decade.

And the negotiations with PhRMA were "the most carefully orchestrated, with extensive communication between top PhRMA officials and key White House personnel," conclude Republican staff on the Energy and Commerce committee, who just completed a two-year investigation of White House dealmaking.

Specifically, the new documents show how PhRMA agreed to $80 billion in payment reductions over 10 years through provisions that would close the Medicare Part D "doughnut hole," increase and expand Medicaid rebates for drugmakers, and levy a "health reform fee."

In exchange, Democrats agreed not to seek authority to negotiate drug prices on behalf of Medicare beneficiaries, according to the documents. They also agreed to block any efforts to allow importation of cheaper medications from other nations.

Emails show that the White House initially sought about $100 billion in savings and other breaks, in return for increasing the number of insured patients and consumers with drug coverage.

GOP criticizes ACA negotiations

GOP lawmakers have argued that the negotiations on the overhaul were not transparent and were driven by politics. According to Rep. Cliff Stearns (R-Fla.), chair of the Oversight and Investigations Subcommittee, "These internal documents quite simply confirm that the White House cut deals with interest groups in order to ram through an unpopular bill."

White House spokesperson Eric Schultz called the investigation a "nakedly political taxpayer-funded crusade to hurt the president's re-election campaign" (Baker, "Healthwatch," The Hill, 5/31; Haberkorn, Politico, 5/31; Alonso-Zaldivar, AP/Miami Herald, 5/31; Mundy, "Washington Wire," Wall Street Journal, 5/31; Strong, Roll Call, 5/31 [subscription required]); Daly, Modern Healthcare, 5/31 [subscription required]).

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