Turns out that the White House's deal with Pharma might actually pay off. Mike Allen has the details:
A new coalition this morning is launching $12 million in TV ads to support President Obama’s health-reform plan, in the opening wave of a planned tens of millions of dollars this fall. The new group, funded largely by PhRMA, is called Americans for Stable Quality Care. It includes some odd bedfellows: the American Medical Association, FamiliesUSA, the Federation of American Hospitals, PhRMA and SEIU. [...]
The group’s campaign is likely to mean that White House supporters keep the upper hand on the airwaves. PhRMA’s participation is key, because the group has promised to kick in as much as $150 million for advertising and grass-roots activity to help pass the president’s plan. But the new group could provoke complaints from the left. The debut ad is mean to shore up support among the conservative House Blue Dog Democrats, and to target swing senators. So it’s airing in Alaska, Arkansas, Colorado, Indiana, Louisiana, Maine, Montana, Nebraska, Nevada, North Dakota, South Dakota and Virginia. The first buy is expected to run for two weeks, with a weekly spend of around $3 million.
it's a bit unclear whether Pharma alone will be responsible for that $150 million. But let's say it will be. That's a serious investment. By political campaign standards, it's huge. But by national industry standards, it's piddling.
Consider the sums involved. The White House's original request from Pharma was for $95 billion in savings. That was a number the government considered reasonable enough that Pharma might agree to it voluntarily. Many liberals in Congress wanted far more. But let's imagine that an unfettered and successful political process would have resulted in $95 billion in savings. The deal then, wherein Pharma agrees to an $80 billion cut in return for offering political support, means that the industry spends $150 million to save $15 billion. That a 100-fold return on its investment.
The White House was probably right to make the deal. This was never going to be easy. And passing the bill is a lot better than not passing a bill with $15 billion, or even $500 billion, more in savings. But it does give you a sense for why industries pump so much money into Washington. This town either needs a lot more money in it, so $150 million isn't quite so impressive, or it needs a lot less. But the present situation, where politics runs on money but not very much of it, creates almost comically lucrative investment opportunities.
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