Biotech Values

[DewDiligence]

PhRMA Chief, Billy Tauzin, Resigns

http://online.wsj.com/article/SB10001424052748703382904575060120849661894.html

›FEBRUARY 12, 2010
By ALICIA MUNDY

WASHINGTON—The pharmaceutical industry's top lobbyist has decided to resign after taking criticism for his support of the White House's now-teetering plan to overhaul health care.

Billy Tauzin, president of the Pharmaceutical Research and Manufacturers of America, calculated that an overhaul was likely to happen and it was better to work with Democrats, people familiar with his thinking said. But his position grew shakier after Democrats' loss in a U.S. Senate race in Massachusetts endangered the legislation's chances.

His resignation is effective June 30, PhRMA said in a statement late Thursday.

Mr. Tauzin, a former congressman from Louisiana, took the PhRMA job in January 2005 and was one of the highest-paid industry representatives in Washington with an annual salary of about $2 million.

Last June, he brought drug makers into an alliance with the Obama administration on the health overhaul. The industry announced a deal in which drug makers would contribute $80 billion over a decade in savings, in part by cutting prices of some drugs to close a coverage gap for seniors on Medicare.

The deal brought some quick dividends for the industry. In his campaign for the presidency, Barack Obama supported the importation of cheaper drugs from Canada and said the federal government should be allowed to negotiate Medicare drug prices directly with drug makers.

The Obama administration stopped advocating those stands as the health-overhaul effort gained strength and PhRMA came aboard.

However, Mr. Tauzin's dealings with the administration drew denunciations from a number of business representatives and Republicans who said PhRMA shouldn't support what they described as a government takeover of health care.

The House minority leader, John Boehner of Ohio, sent a scathing letter to Mr. Tauzin last August, calling the deal with the White House a "short-sighted" bargain with a "bully" which he identified as "Big Government." Mr. Boehner said the deal helped government "steal others' money at the price of protecting your own."

Mr. Boehner could not be reached for comment.

Under Mr. Tauzin, PhRMA, which had given mostly to Republicans, increased its political contributions to Democrats, creating a nearly equal split between the two parties.

Mr. Tauzin said it was his own decision to resign, saying he wanted to explore other interests after more than five years on the job.

David Brennan, the chief executive of AstraZeneca PLC and chairman of PhRMA, praised Mr. Tauzin. "We are grateful to Billy for his strong leadership and many accomplishments at PhRMA during these past five years, including his efforts to bring about health-care reform," Mr. Brennan said.

During debate last summer on the health overhaul, Mr. Tauzin fought back against efforts by some Democrats including Rep. Henry Waxman of California to increase Medicare rebates by drug makers, which would have cost them billions of dollars more than their agreement with the administration.

Kathleen Jaeger, president of the Generic Pharmaceutical Association, said, "I think he's done a terrific job for them and been a strong advocate for brand-name drug makers." The Democrats' health overhaul would guarantee 12 years of sales exclusivity for brand-name biologics—complex drugs derived from human proteins—which is longer than many Democrats and the generic industry had sought.

However, that provision is now up in the air along with the rest of the overhaul.‹