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“You Do Not Cut Deals with the System that Has to Be Replaced”: Ralph Nader on Secret White House Agreements with the Drug Industry

StoryAugust 14, 2009
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The Obama administration admitted last week it promised to oppose proposals to let the government negotiate drug prices and extract additional savings from drug companies. In return, drug companies reportedly pledged to reduce costs by up to $80 billion. The White House has tried to back off the reported agreements, but the drug industry says it expects the White House to uphold its pledge. We speak to former presidential candidate and longtime consumer advocate Ralph Nader. [includes rush transcript]

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This is a rush transcript. Copy may not be in its final form.


President Obama is headed to Belgrade, Montana today and Grand Junction, Colorado tomorrow, on Saturday, for a pair of town hall meetings on his healthcare reform legislation. The meetings are part of a final public relations push by the President to answer critics of reforming the healthcare system before the Obamas go on vacation.

While much of the media coverage has focused on right-wing criticism of the bill, there is also growing concern by advocates of reform that the Obama administration secretly made concessions to the healthcare industry and drug companies.

A recent article in Business Week was titled “The Health Insurers Have Already Won.” The piece details how UnitedHealth and rival carriers have maneuvered behind the scenes in Washington and shaped healthcare reform for their own benefit.

Meanwhile, the Huffington Post has obtained a memo that shows the White House and pharmaceutical industry have secretly agreed to precisely the sort of wide-ranging deal that both parties have been denying over the past week. The memo says the White House agreed to oppose any congressional efforts to use the government’s leverage to bargain for lower drug prices or import drugs from Canada and also agreed not to pursue Medicare rebates or shift some drugs from Medicare Part B to Medicare Part D, which would cost Big Pharma billions in reduced reimbursements. In exchange, PhRMA, the Pharmaceutical Researchers and Manufacturers Association, the lobbying association for the drug companies, agreed to cut $80 billion in projected costs to taxpayers and senior citizens over ten years.

On Thursday, NBC reporter Chuck Todd questioned White House Press Secretary Robert Gibbs about the White House-PhRMA deal.

    CHUCK TODD: Stepping back a minute on the PhRMA deal, are we to believe that PhRMA didn’t get anything for their agreement on the $80 billion, that they did not get anything in return from the White House, any pledges, promises, winks, nods, whatever? Are we to believe nothing was promised to them?

    ROBERT GIBBS: Well, again, I simply was responding to what the question was about a memo, that I think both sides have —

    CHUCK TODD: Read the memo a minute.

    ROBERT GIBBS: — have decided —

    CHUCK TODD: Can you answer that question? Can you answer that question? Would they — can you say for sure they were promised nothing in return?

    ROBERT GIBBS: I can assure you that we’ve come to an agreement to seek some savings from the pharmaceutical industry as part of comprehensive healthcare.

    CHUCK TODD: And at what point are you going to release then the facts of the deal with them and with the hospitals —

    ROBERT GIBBS: Well —

    CHUCK TODD: — and with a couple of these stakeholders that have come here —

    ROBERT GIBBS: I think —

    CHUCK TODD: — made these pledges?


    CHUCK TODD: And you guys have been —

    ROBERT GIBBS: I think some of this is going to be written into legislation that we’ll hopefully see going through Congress relatively soon.

    CHUCK TODD: Should we — you know, why not release it now? Why not say what it is now?

    ROBERT GIBBS: Again, as I said yesterday, some of that agreement — some of those agreements are up on the Finance Committee website.


That’s the White House spokesperson Robert Gibbs being questioned by NBC, Todd, the White House correspondent.

Well, to talk more about the healthcare legislation, we’re joined by former presidential candidate, longtime consumer advocate, Ralph Nader.

Ralph, you have looked at what came out in the Huffington Post. Explain what it is now that we’re understanding is the deal that the White House has, well, denied over the last week.

RALPH NADER: What is emerging here is what was being planned by the Obama White House all along, which is they would only — they would only demand legislation that was accepted by the big drug companies and the big health insurance companies.

You can see this emerging over the last few months. President Obama has met with the heads of the drug companies and the health insurance companies. Some executives have met with President Obama four to five times in the White House in the last few months. He has never met with the longtime leaders of the “Full Medicare for Everybody” movement, including Dr. Quentin Young, who is a close friend of his in Chicago; Dr. Sidney Wolfe, the head of the Health Research Group of Public Citizen; Rose Ann DeMoro, the leader of the fast-growing California Nurses Association — not once in the White House.

That’s all you need to know to realize that the deal that’s being cut here is from Obama to Senator Baucus, the Blue Dog senator from Montana, who is cutting a deal, largely in private, with right-wing Republican senators and getting it through the Senate and presenting Henry Waxman and John Dingle and others in the House with a fait accompli. So whatever they pass in the House will be watered down in the Senate-House conference. And what we’ll end up with is another patchwork piece of legislation, allowing huge and expanded profits for the health insurance companies and the drug companies, and continuing this pay-or-die system that has plagued this country for decades, a system that takes 20,000 lives a year, according to the Institute of Medicine of the National Academy of Sciences. That’s about fifty to sixty people who die every day.

The big mistake that the Obama administration made was they did not have continual public congressional hearings documenting the greed, the fraud, the $250 billion in billing fraud and abuse alone that the GAO years ago has documented. They didn’t document the $350 billion of waste, the overhead of Aetna and UnitedHealthcare and other health insurance companies with their massive executive salaries and bureaucracies. They did not document the deaths, the injuries, the sickness that hundreds of thousands of Americans go through every year because they can’t afford healthcare. And by not doing that, by playing this behind-the-scenes game with these executives from the big health-industrial complex, they were vulnerable to the split in their own party in the House, with the Blue Dog Democrats emboldened by an apparently wavering and indecisive President Obama, and they made sure that they were placed on the defensive.

And, Amy, when you’re on the defensive in a battle like this, with all these right-wing websites and Swift-boat-type people filling town hall meetings around the country, it’s very hard to get back on the offense. And when you’re cutting deals, as Obama is, with these big corporations, you will never focus the public attention on the sources of the abuse and cruelty.


Ralph Nader, President Obama is going to be in Montana today. Democracy Now!, we traveled through Helena, Missoula, Bozeman, other parts of Montana in April. There was a very strong progressive healthcare movement, healthcare activists, throughout Montana. But the senator who really is in charge of this healthcare reform, Max Baucus from Montana, let’s just say wasn’t their hero. The Montana Standard reported he’s received more campaign money from health and insurance industry interests than any other member of Congress in the past six years. Nearly a fourth of every dime raised by Baucus and his political action committee has come from groups and individuals associated with drug companies, insurers, hospitals, medical supply companies, and other health professionals. The significance of this?


Well, the significance is that Obama is being undermined by his own party in Congress, because the Blue Dogs are getting far more money from these corporations and campaign contributions than the so-called liberals in the Democratic Party.

But, you see, I say “undermined” — I’m not quite sure that Obama is objecting to this. He has set the whole atmosphere of catering to these giant corporations. He has made every mistake that the Clintons made in 1993, ’94 with their health insurance plan, except that he’s leaving Michelle Obama out of it. He’s made every mistake.

You do not cut deals with the system that has to be replaced, which is the health insurance system and the monster costs imposed by the drug corporations, all of which are getting huge taxpayer subsidies, by the way.

So, what Obama failed to do, because he’s never done it when he was campaigning, he did not pay adequate and due regard to the folks that brung him to the White House. He has not mobilized the progressive base in this country. He has not done anything but, you know, humor the labor unions. And as a result, he doesn’t have a base out there.

You point quite clearly to, or you imply, that there a lot of people for a single payer, a full Medicare-for-All system. And that’s true. Every poll has shown a majority of the American people, majority of doctors, majority of nurses, are for the single-payer system.

So why isn’t the President of the United States, who was elected in large part by these same people, why isn’t he representing them in Congress and in the White House? Because he is not a transforming leader. He is a harmony ideology person. He’s a concessionary person. He wants any bill with the label “health insurance reform” on it, no matter what. He’s not even willing to draw the line and say there will be no bill, I will veto any bill that doesn’t have a vigorous public option, not a phony public option that will allow — that will allow people to be dumped into the public option when they’re the sickest and leave the healthiest people for the profiteering insurance companies.


Ralph Nader, last week we interviewed Democratic Congress member Henry Waxman, chair of the House Energy and Commerce Committee, you know, absolutely key in healthcare. And I asked him why he withdrew his support for HR 676, the bill to create a universal, single-payer healthcare system. Take a listen.

    REP. HENRY WAXMAN: A single-payer bill does not really have a chance to pass the Congress. It would be a radical transformation of our healthcare system. Some people could say, “That’s fine, we should do it.” But I don’t think the Congress would have any realistic chance of passing a bill like that. You’d have to take all the insurance coverage that’s provided on the private sector and switch it over to the government. There would have to be massive taxes, increases, to make up for the lost money that’s now being spent by employers for their employees. And by the time we would be through trying to accomplish something like that, the Republicans would demonize it. So what President Obama suggested was a practical compromise way to accomplish the goals that we wanted.

    There are other ways to get universal coverage, as well. Senator Wyden and Bennett had an approach that would end employer coverage by in effect giving people an opportunity to go buy private insurance. That would work. I have some misgivings about it, but it also is a radical transformation of healthcare.

    AMY GOODMAN: So, why did you support it for so long?

    REP. HENRY WAXMAN: Well, I wanted to argue that this was a way to cover people, and it’s the way many countries provide health insurance. And if we were starting from scratch in this country, we might well decide that that would be the way for us to go, but we have right now a system that’s been in place since World War II, where most people have their insurance through their jobs. And we thought it would be much too disruptive and people would be much too anxious, if we took things away from them with the promise that they’re going to get something else. And I didn’t think Congress could pass it.


That’s California Congress member Henry Waxman, chair of the Energy and Commerce Committee. Ralph Nader, your response?


Well, first of all, Henry Waxman is going to be shoved aside even on his modest proposal, because the deal is being cut between Obama, Baucus, Grassley, Enzi in the Senate. And he’s not going to have much left, given the rebellion in his own ranks by the right-wing Democrats, even to put forth what he is proposing, which is a huge step backward from HR 676, which was the single-payer bill that he was on for a long time before he dropped out, before Nancy Pelosi and Obama, in effect, persuaded him to drop out.

But, you know, this business of “it‘s impractical, they don’t have the vote,” well, these are self-fulfilling prophecies. How many times could that have been said to the civil rights movement, to the women’s rights movement in the past? Well, they didn’t have the votes in Congress. So did these advocates of civil rights and the women’s rights movement, did they back down? No, they worked. They fought. They were transforming leaders. These people are concessionary leaders.

Let’s give Henry Waxman some slack here. He says that Full Medicare for All is too disruptive and too fast. Alright, why don’t they set a system that’s described in an interview with the New York Times yesterday of Dr. Marcia Angell, who was formerly editor of the New England Journal of Medicine? She says the following: you could do Medicare, step by step. Right now Medicare kicks in at age sixty-five. In the first stage, you could take it down to fifty-five years or older, and then take it down to forty-five years or older. They don’t even want to do that.

That’s why the people who are building this movement called, which confronts each senator as they’re going in and out of meetings and puts it on their website, that’s why they say there’s no piecemeal. They don’t want piecemeal. They want a continuation of the present system with more co-pays, more deductibles, enormous inflationary cost, and the fraud that’s enormously pervasive in the billing system, and the waste in the administrative bureaucracies of these health insurance companies.


Ralph Nader, I wanted to get your comment on the Whole Foods CEO, John Mackey, who wrote a piece in the Wall Street Journal, an editorial criticizing Obama’s plan to create a government-funded public healthcare option, dismissing the single-payer healthcare system of countries like Canada and Britain. He said he doesn’t believe in, quote, “an intrinsic right to health care, food or shelter,” and said those are best provided through, quote, “market exchanges.” Again, this is the CEO of Whole Foods, John Mackey. Single Payer Action, the group you just mentioned, is calling for a boycott now of Whole Foods.


Well, first of all, you know, he’s a libertarian, very right wing. And there is going to be announced a boycott of Whole Foods, because he is a clear menace to the fundamental system of community caring that should be a trademark of our country. We should care for one another. To leave it up to the market leaves it up to the funeral directors. Twenty thousand people a year, at least, are dying because they can’t afford health insurance. Nobody dies in Canada or Belgium or France or England or Germany because they can’t afford health insurance, because they’re insured from the day they are born.

And right now, people don’t have choice of — free choice of doctor and hospital when they’re under these HMOs. What’s happening here is a Goebbels-type propaganda attack on Full Medicare for All, accusing Full Medicare for All of everything that the present system is furthering: rationing of care by these HMOs, number one; bureaucracy, number two; huge cost increases, number three; and making the taxpayers subsidize their profiteering corporate greed.


Ralph Nader, we only have a few seconds, and I just want to ask, if you were President Obama today, what exactly would you do?


I would go for full Medicare for everyone, because people understand Medicare. Forty-five million people get it. They have free choice of doctor and hospital. It’s a three percent administrative burden, compared to 20 to 25 percent for the Aetnas and the private health insurance bureaucracies. It’s something that people understand. It’s something we should have had in 1964; instead of just for the elderly, it should have been across the board. That’s what I would go for. It’s supported by a majority of the people, majority of the doctors, majority of the nurses. It’s clear. It’s understandable. It doesn’t deal with unenforceable deals like the so-called drug industry —


And the polls that show that people who want to stay with their doctor are not going to support something like this?


No, because they get a free choice in doctor. See, all this is simply taking —


Five seconds.


— the health insurance industry, replacing it with a government insurance system, as in every Western country.


Ralph Nader, thank you very much for being with us, longtime consumer advocate.

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