February 12, 2010 – The drug industry’s chief lobbyist and spokesman, former Louisiana Congressman Billy Tauzin, is resigning from his post as president and chief executive of Pharmaceutical Research and Manufacturers of America (PhRMA).
“In January 2005, after a full year successfully battling a killer cancer, I was given a second chance at life, and appropriately chose to commit my next five years to the life-saving work of the people whose miracle medicines had just saved my own,” Tauzin said in a statement released today. “I now believe it is time I move on and hand the mantle of leadership of this great organization to others as passionate as myself.”February 12, 2010 – The drug industry’s chief lobbyist and spokesman, former Louisiana Congressman Billy Tauzin, is resigning from his post as president and chief executive of Pharmaceutical Research and Manufacturers of America (PhRMA).
There was immediate speculation that Tauzin’s bold and controversial deal with the Obama administration to contribute $80 billion in industry money toward health care reform had undermined his credibility among the PhRMA board and its members.
The 2009 deal was lauded as a major breakthrough by the White House and other groups favoring reform, because the drug industry had historically opposed efforts to overhaul the nation’s costly health care system.
During the negotiations, Tauzin reportedly won a promise from the White House and Senate Finance Committee Chairman Max Baucus (D-Mont.) that the reform legislation would not require additional financial concessions from drug makers. Tauzin was also told that the legislation would prohibit reimportation of cheaper drugs from Canada and Europe, The Los Angeles Times reported.
The concessions included a commitment to help close the donut hole coverage gap for Medicare beneficiaries and to agree to an increase in the Medicaid rebate percentage. The Medicaid rebate percentage is used to determine not only rebates that drug makers must give to the Medicaid program but also the discounts that manufacturers are required to provide under the 340B program.
Deal with Democrats backfired
After the PhRMA-White House deal was announced, however, Tauzin was immediately criticized by lawmakers from the left, which accused the drug industry of not giving up enough; and from the right, which claimed he was siding with the wrong team.
When liberal members of Congress began pushing for additional industry tradeoffs — including lower Medicare prices and reimportation rights — the criticism grew louder. Some PhRMA board members began questioning whether the pact with the White House would ultimately hurt their member companies despite the expected surge in insured patients.
The election of a Republican in the Massachusetts Senate race last month and subsequent health reform collapse brought additional complaints from PhRMA members “who grumbled that it had all been for naught,” The New York Times reported.
If Tauzin ruffled some PhRMA feathers, it appears his services and connections on Capitol Hill will still be in demand. After leaving his $2-million CEO job, the former congressman will continue to serve as a consultant for his former employer.