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The Republicans look a sour lot this morning, but the pharmaceutical industry appears more than content with the health care legislation passed by the House, and with its Democratic friends in the White House and on the Hill.
Big Pharma helps foot the campaign bills of a sizeable chunk of members of Congress, and both parties generally lined up behind the insurance and drug industries from the get-go. So it should come as no surprise that the Democrats, who long ago gave up any pretence of opposing corporate power, found a way to accomodate the pharmaceutical companies on the way to passing their tepid reform. To a large extent, the "debate" over health care was a show debate, an extended round of Washington smoke and mirrors. The administration cut its deal with Big Pharma early on, and pretty much stuck to it throughout the process.
In fact, the Dems actually made the drugsters look good, celebrating the industry's generous "concessions" and "discounts" while ensuring that no real threat to Big Pharma’s profits would make their way into the final bill. The industry's main goal from the very beginning has been to fend off any government power to negotiate or seriously regulate drug prices—and this they did. Big Pharma's second big win was to prevent any measure that would have opened the way for American consumers to buy less expensive drugs abroad, especially from Canada.
At the same time, the supposed give-backs by the drug industry are projected to more than pay for themselves. The much-lauded discounts on brand-name drugs for seniors in the Medicare prescription drug program, for example, are good for Big Pharma because they discourage oldsters from switching to generics, or giving up meds they can't afford. (And just to be safe, the drug companies jacked up prices on their bestselling brand-name drugs this year.) Finally, more insured people simply means more money coming into the coffers, for Big Pharma as well as for the health insurance industry.
Confirmation of the industry analysis came early in the day from the stock market, where drug stocks initially remained level; there certainly was no rush to dump shares, which is what would happen if the bill actually represented any threat to profits. And by 1 p.m., CNN Money was reporting a rally in health care stocks.