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Drug Industry Pushed Obama On Health Overhaul, E-mails Suggest

After weeks of talks, drug industry lobbyists were growing nervous. To cut a deal with the White House on overhauling health care, they needed to be sure that President Obama would stop a proposal intended to bring down medicine prices.

On June 3, 2009, one of the lobbyists e-mailed Nancy-Ann DeParle, the president’s health care adviser. Ms. DeParle reassured the lobbyist. Although Mr. Obama was overseas, she wrote, she and other top officials had “made decision, based on how constructive you guys have been, to oppose importation” on a different proposal.

Just like that, Mr. Obama’s staff signaled a willingness to put aside support for the reimportation of prescription medicines at lower prices and by doing so solidified a compact with an industry the president had vilified on the campaign trail. Central to Mr. Obama’s drive to remake the nation’s health care system was an unlikely collaboration with the pharmaceutical industry that forced unappealing trade-offs.

The e-mail exchange three years ago was among a cache of messages obtained from the industry and released in recent weeks by House Republicans — including a new batch put out Friday detailing the industry’s advertising campaign supporting Mr. Obama’s health care overhaul. The broad contours of his dealings with the industry were known in 2009, but the newly public e-mails open a window into the compromises underlying a health care law now awaiting the judgment of the Supreme Court.

Mr. Obama’s deal-making in 2009 represented a pivotal moment in his young presidency, a juncture where the heady idealism of the campaign trail collided with the messy reality of Washington policy making. A president who had promised to negotiate on C-Span cut a closed-door deal with a powerful lobby, signifying to disillusioned liberal supporters a loss of innocence, or perhaps even the triumph of cynicism.

But the bargain was one that the president deemed necessary to forestall industry opposition that had thwarted efforts to cover the uninsured for generations. Without the deal, in which the industry agreed to provide $80 billion to expand coverage in exchange for protection from policies that would cost more, Mr. Obama calculated he might get nowhere.

“Throughout his campaign, President Obama was clear that he would bring every stakeholder to the table in order to pass health reform, even longtime opponents like the pharmaceutical industry,” Dan Pfeiffer, the White House communications director, said Friday. “He understood correctly that the unwillingness to work with people on both sides of the issue was one of the reasons why it took a century to pass health reform.”

Republicans see the deal as hypocritical. “He said it was going to be the most open and honest and transparent administration ever and lobbyists won’t be drafting the bills,” said Representative Michael C. Burgess of Texas, a Republican on the House Energy and Commerce Committee examining the deal. “Then when it came time, the door closed, the lobbyists came in and the bills were written.”

Some liberals bothered by the deal in 2009 now find the Republican criticism hard to take given the party’s longstanding ties to the industry.

“Republicans trumpeting these e-mails is like a fox complaining someone else raided the chicken coop,” said Robert Reich, who was labor secretary under President Bill Clinton. “Sad to say, it’s called politics in an era when big corporations have an effective veto over major legislation affecting them and when the G.O.P. is usually the beneficiary.”

In a statement, the Pharmaceutical Research and Manufacturers of America, the drug industry lobby known as PhRMA, called its interactions with the White House part of its mission to “ensure patient access” to high-quality medicine: “Before, during and since the health care debate, PhRMA engaged with Congress and the administration to advance these priorities,” the lobby statement said.

If the negotiations resembled deal-making by past presidents, what distinguished them was that Mr. Obama had strongly rejected business as usual. During his campaign, he singled out the power of the pharmaceutical industry and its chief lobbyist, former Representative Billy Tauzin, a Democrat-turned-Republican from Louisiana.

“The pharmaceutical industry wrote into the prescription drug plan that Medicare could not negotiate with drug companies,” Mr. Obama said in a campaign advertisement, referring to 2003 legislation. “And you know what? The chairman of the committee who pushed the law through went to work for the pharmaceutical industry making $2 million a year.”

Mr. Obama continued: “That’s an example of the same old game playing in Washington. You know, I don’t want to learn how to play the game better. I want to put an end to the game playing.”

The e-mails document tumultuous negotiations, at certain times transactional, at others prickly. Each side suspected the other of operating in bad faith. Led by Rahm Emanuel, Mr. Obama’s chief of staff at the time, and Jim Messina, his deputy, the White House appeared deeply involved, and not averse to pressure tactics.

In May, the White House was upset industry had not signed on to a joint statement. One industry official urged colleagues to sign: “Rahm is already furious. The ire will be turned on us.” By June, tension flared again. “Barack Obama is going to announce in his Saturday radio address support for rebating all of D unless we come to a deal,” wrote Bryant Hall, a PhRMA lobbyist, referring to a Medicare Part D change that would cost the industry.

A public confrontation was averted and an agreement announced, negotiated down to $80 billion from $100 billion. “We got a good deal,” Mr. Hall wrote.

The White House thought it did, too, and defended it against Democrats in Congress. “WH is working on some very explicit language on importation to kill it in health care reform,” Mr. Hall wrote in September.

Mr. Emanuel, now mayor of Chicago; Mr. Messina, now the president’s campaign manager; Ms. DeParle, now deputy White House chief of staff; and Mr. Bryant, now heading his own firm, all declined to comment.

The e-mails released Friday also underscored detailed discussions about an advertising campaign supporting Mr. Obama’s health overhaul. “They plan to hit up the ‘bad guys’ for most of the $,” a union official wrote after an April meeting. “They want us to just put in enough to be able to put our names in it — he is thinking @100K.” In July, Mr. Hall wrote, “Rahm asked for Harry and Louise ads thru third party,” referring to the characters the industry had used to defeat Mr. Clinton’s health care proposal 15 years earlier.

Industry and Democratic officials said advertising was an outgrowth of the deal, not its goal. The industry traditionally advertises for legislation it supports.

In the end, balky House Democrats imposed additional conditions on the industry that pushed the cost above $100 billion, but the more sweeping policies it feared remained out of the legislation. Mr. Obama signed it in March 2010. He had the victory he wanted.


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