TimManBlog

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Crony Capitalist Contraceptives

Peter Schweitzer has an excellent article on the recent controversy over the health care mandate requiring employers to provide contraceptives free of charge, free of copays.  As one might expect, the driving force is money, not morals.  I’ve copied the gist of the argument below. (read the whole thing here.)

You’ve heard of crony capitalism? Well this is America’s first example of crony contraceptives.

Forget for a minute the religious question and look at who wins big here: Big Pharma. This mandate is not really about condoms or generic versions of “the pill,” which are available free or cheap in lots of places. This is about brand-name birth control drugs and other devices that some consumers swear off because they are too expensive. The Health and Human Services (HHS) mandate requires health-insurance companies provide contraceptive coverage for all “FDA approved contraceptive methods.” It does not insist on generics. And it does not offer any cost containment.

What’s more, the mandate prevents health-insurance companies from having copays or deductibles for the benefit. This is the perfect set up for Big Pharma. Since the drugs will be paid for by a third party (insurance companies, who will pass the cost on to employers and the rest of us), the consumer won’t worry about the price. Expensive brand names will no doubt see demand rise.

So how does Big Pharma get such a sweet deal? Read on:

It’s important to point out that among President Obama’s biggest financial backers are precisely the Big Pharma companies who benefit from the mandate.  Sally Sussman, head of government affairs for Pfizer, is one of his biggest campaign bundlers, who co-hosted a fundraiser for Obama on Thursday night. Pfizer sells numerous contraceptives that now must be covered by health-care plans.  Obama’s financial ties to the pharmaceutical industry run deep. During the 2008 presidential campaign, he collected three times more in contributions from pharmaceutical manufacturers than John McCain, according to the Center for Responsive Politics.  And he will no doubt win the money race again during this election cycle.

There’s more:

Back in the nation’s capital, Big Pharma has spent a lot of money over the past couple of years, keeping an army of lobbyists employed. As Tim Carney of the Washington Examiner pointed out last year, since the Obama administration took office, “the drug industry’s $635 million in lobbying exceeds that of Wall Street and the oil and gas industry, combined.” And the lesson seems to be clear: it is money well spent. Not only did they get largely what they wanted from Obama’s health-care-reform law (no caps on drug prices, no reimportation from Canada); now, President Obama’s mandate is broadening the market for their products. With drug prices so high, the best way it can increase demand for its products is to get the federal government to mandate payment for it.

Of course, also consider the following, but remember that crony capitalism on the federal level causes far greater damage than can be done on the state level:

President Obama’s not the only one who has mandated certain health-care requirements for the benefit of companies with which he has close ties.  Back in 2007, Texas Gov. Rick Perry signed an executive order that required school girls in Texas be vaccinated with Gardasil, which fights against a sexually transmitted virus linked to cervical cancer (the full cost of the three-shot vaccine is $360). Again, forget the culture war politics for a second.  Instead of looking at the bedroom, follow the money to the corporate boardroom: Gardasil is produced by pharma giant Merck, whose chief lobbyist in Texas at the time had been Perry’s chief of staff.  Merck was a campaign contributor, and had also made contributions to the Republican Governors Association while he headed that organization. Again, a corporation supports a politician who in turn issues a mandate that creates a bigger market and larger profits for its product.

Obamacare is all about Crony Capitalism. So is Obama’s energy policy — subsidizing major donors through those donors’ green energy companies. Barack Obama’s Presidency is as fraught with failure as Jimmy Carter’s was, but at the same time it is as corrupt as Richard Nixon’s.

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