Follow the Money

Near the climax of All the President's Men, Deep Throat tells Bob Woodward (Robert Redford) to "follow the money."   Since then, the line has become a mantra for political analysts who observe that, whatever the surface issues of a political dispute might be -- "religious liberty," say, or "women's health" -- the real issue lurks beneath the surface, and the real issue is always:  who gets paid.

It is in this light that Peter Schweizer at The Daily Beast brilliantly cuts through the cant of the debate surrounding the HHS mandate on contraceptions:

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. Ask more health-care analysts why the cost of medical services continues to rise so rapidly and near the top of the list is the fact that a third-party payment system won’t contain costs.

Back in 2009, many observers were surprised when Big Pharma came out in favor of President Obama’s health-care reform bill. The industry spent millions running television ads in favor of the law and industry lobbyists pushed hard for it.  One important reason they did so was the promise that with the new law they would have a new market of millions of new customers. The contraceptive mandate is a perfect example.