Corporations strike back

Ahhh, now we see what the reason for all those exorbitant profits were really for -- bad weather.

“Business Mobilizes to Defend Turf; Firms Plot Campaigns to Counter Effects of Democrats' Agenda,” by John D. McKinnon and John J. Fialka, Wall Street Journal. 1/4/07.

The industries that expect to take the biggest hits from the new Democratic Congress are scrambling their marketing, public-relations and advertising forces to shore up their defenses.

Eager to demonstrate a sharp contrast with Republicans who dominated Capitol Hill for 12 years, new Democratic leaders are vowing to raise the federal minimum wage; reduce oil-company subsidies; give the government bargaining authority in purchasing Medicare prescription drugs; shrink student-loan fees; and impose mandatory controls on emissions of carbon dioxide and other so-called greenhouse gases that contribute to climate change.

The worried industries and their trade groups are responding by hiring new lobbying talent, planning mass-market ad campaigns and, in some cases, focusing on getting goodies attached to legislation that they would rather see killed but know they can't stop.

The petroleum industry, for example, is preparing an ad campaign that seeks to justify oil companies' huge size -- and profits. The drug industry is weighing a mass-media counterattack of its own, emphasizing the good performance of the Medicare prescription-drug program. Student-loan titan Sallie Mae is rallying grass-roots support from college administrators. Small-business representatives are talking up tax breaks to offset what appears to be an inevitable increase in the minimum wage.

Many businesses "are gearing up to respond" both to unfriendly legislation and to the prospect of congressional investigations, says George Crawford, a former top aide to new House Speaker Nancy Pelosi. Now with the law firm of King & Spalding in Washington, he has attracted some big new clients in recent months, including Exxon Mobil Corp. and drug maker Amgen Inc. (more at WSJ)

Well, seems they cannot make it without help, and they are ready to buy it anywhere. And now for Pharma:

Article – “Democratic Plan to Require Drug Price Negotiation Lacks Maximum Leverage,” by Drew Armstrong and Alex Wayne, CQ Today. 1/4/2007.

A Democratic proposal to require the government to negotiate drug prices for Medicare beneficiaries is not as far-reaching as the new majority indicated before taking power, according to a draft bill circulated Thursday.

The measure would require the Health and Human Services (HHS) secretary to negotiate prices for drugs on behalf of Medicare’s Part D benefit, which provides pharmaceutical coverage to seniors. It is a top health priority for the agenda of House Speaker Nancy Pelosi, D-Calif., in the first 100 hours of the new Congress.

But under the draft bill, the government would not be able to establish an exclusive formulary of which drugs were available to the plans. Without a formulary or authority to charge different co-payments for drugs, the HHS secretary would not have as much leverage to obtain discounts. Formularies can exclude drugs from coverage or provide coverage on less-favorable terms.

Under the current Medicare law (PL 108-173), the secretary is forbidden from negotiating prices on behalf of beneficiaries. HHS administers the Part D benefit.

Some Democrats had discussed creating a government-run Medicare drug plan that would compete with private plans. Another idea was to create a system for negotiating drug prices modeled on the one used by the Veterans Affairs Department.

The draft bill would not go that far.

A House Democratic leadership aide said that despite the lack of formulary language, the government would still have plenty of bargaining clout, citing successes with drugs such as Cipro and FluMist — a view endorsed by lobbyists and aides familiar with the draft. (more at CQ).

Ok, with all that breathless prose, we are supposed to think corporate America is not ready for a full out total assault on the Democratic congress? Duh. And these cites show just how arrogant they really are. The Dems cannot seem to force a full negotiation on industry, try as they might.

Look for a messy, mean and sloppy, not to mention bloody, two more years, and beyond. I tell you we got to neuter those corporations.

Comments

I don't think the corporations will mind being neutered

as long as they can still make a shitload of money.

This all seems about right to me. Business is in the business of business, as it should be, and government is in the business of regulation. If each does its job well, though the goals may be in tension, the result ought to be a (positively) dynamic economy and more than enough social justice for all.

And we don't really expect the businesses to stand still and take their medicine, nor should we. They're supposed to be making money, and most regulation doesn't do that for them. Let's just not forget who's boss.

(That would be you and me.)