Friday, April 15, 2011

Bill Clinton: Pharma Got a "Good Deal" in Health Reform

Bill Clinton, the man who once called drug manufacturers "profiteers" literally in their own territory, got two standing ovations at the PhRMA annual meeting in Jersey City.

We checked, and we hadn't entered a vortex in the time-space continuum. The applause was real.

The warm reception may be a marker of the political balance the drug industry has achieved by working with Democrats on passing the Patient Protection & Affordable Care Act (PPACA)-a perception that was helped along with Clinton following one of the rising stars of the Republican Party, New Jersey Governor Chris Christie.

The former President of the United States tackled wide ranging topics—energy, poverty, healthcare reform, Walmart, the economy, climate control, and even subatomic particles.

Clinton praised the drug industry for going first in negotiating with the White House on the healthcare deal. How did the industry fare in its measured risk?

"I thought that a good deal was made by pharma in the health care bill because you gave up a few billion dollars after the Mckinsey study came out three or four years ago saying that in the US we paid approx $66 bil. a year more than we would pay in any other country, including other countries with vigorous pharmaceutical industries," Clinton said. PhRMA Chairman and Sanofi-Aventis CEO Chris Viehbacher would later note: “We were the first ones to come to the table.”

The analysis in question found that the US overpaid for brand drugs by 77% compared to the rest of the world, when the premium should be around 30%. The report findings were used as a frequent talking point at town hall meetings by the President in the buildup to the passage of healthcare reform.

Clinton keyed in on a number of Obama’s proposals in his long-term deficit reduction plan, which included government price negotiation and/or rebates in Medicare Part D; reducing market exclusivity for biologics; prohibitions on “pay for delay” patent settlements; and increased power for the Independent Payment Advisory Board for Medicare (IPAB) due to new cost-containment triggers.

“I can understand why you’re opposed to what the President said,” Clinton added. “But my argument to you is the same argument that I made to my friends involved with the White House: if you don’t like it, come up with a counter proposal.”

The former President cast the healthcare challenges facing the country, as well as other problems, as an issue of systems. He said in the developing world there is an absence of systems, whereas in developed countries such as the US, we are continuously trying to remake our existing systems.

“In the developed world, we have exactly the reverse problem. We have systems. America built the greatest scientific establishment in the world and you were a part of it. It’s part of the reason I’m here giving this speech and not under the ground somewhere being visited by a tourist.”

Specifically citing Medicare and general health care spending, Clinton said “we’ve got a lot of out of whack systems.”

He explained the US spends 17.2% of its gross domestic product on health care, while many other nations spend a significantly smaller percentage. Clinton cited Switzerland as a health system, basically a publicly funded system delivered by the private sector that offers supplemental services as well, that spends roughly 11.5% of its GDP; conservatives have frequently cited the Swiss system as a model for the US. “Incidentally, the Swiss plan is most like the one Hillary and I proposed in 1993-1994.”

While Clinton demonstrated his intellectual flexibility, he also put his political, scene-stealing skills, purposefully or not, on full display.

After Christie's address, which was very well received by the audience, the lights went down and an introductory video with music came on while Christie was still on stage thanking his gracious hosts. Then Clinton took his time appearing on the stage. Why? He was chatting with Governor Christie.

He then joked that he was going to say some nice things about Governor Christie but given the current vitriolic political environment, it would only help to dim his future in politics.

Clinton was scheduled to speak from 10:30 to 11:10 in the morning. His remarks ended at around 11:50am, leaving about 10 minutes for the next panel, which featured a number of high profile industry scientific experts, including AstraZeneca President of R&D Martin Mackay and Alkermes CEO Richard Pops.

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