Pfizer’s Bad Political Bet

Kim Strassel has another good article in today’s WSJ:

The sight of ObamaCare on life support has many Democrats disappointed. It could be worse. They could be Pfizer CEO Jeffrey Kindler.

 

The twin events of an Obama presidency and a financial crisis rattled corporate America. Public anger put companies on the defensive. A liberal president vowing to punish firms that didn’t aid his agenda got companies scared.

 

Fortune 500 execs could stand up for a free market that benefits consumers and shareholders, or hitch their cart to the new Democratic majority. Pfizer’s Mr. Kindler is a case study in the hitch-and-hope mentality—a CEO who became the motivating force behind Big Pharma’s $80 billion "deal" on reform, and industry support of ObamaCare. With that health agenda burning, the choice isn’t looking so grand.

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Mr. Kindler surely believed Democrats would treat his industry gently. The strategy: The industry would pledge $80 billion to reform. In return it would get greater volume and a requirement that people buy brand-name drugs. Democrats would also fight against drug reimportation and forgo price controls.

 

No one pushed harder than Mr. Kindler. The CEO made no fewer than five trips to the White House last year. He was the man prodding Pharmaceutical Researchers and Manufacturers of America head Billy Tauzin every step. He wrote an op-ed with the SEIU’s Mr. Stern demanding reform. He pressed the industry’s $150 million ad campaign promoting ObamaCare, rolled out with liberal activist groups.

 

Critics warned the legislation would lead to a government takeover and price controls. They warned Democrats would take the money and double-cross them. None of it fazed the industry, right up until ObamaCare imploded.

 

Mr. Kindler and Co. are left with the ashes. Having got this far (with Big Pharma’s help), Democrats are more desperate than ever to pass "something." It won’t include any upside for drug companies. There is talk instead of "popular" stand-alone legislation, including reimportation, Medicare price controls, and slashing the industry’s 12-year exclusivity on biologics.

 

Big Pharma can’t count on former conservative protectors. Republicans were sympathetic to its decision to "sit at the table," but grew furious when it engaged in active advocacy of the Democratic agenda. One House Republican staffer predicts the next time drug companies "ask us to stand in front of the train," the answer will be: "Since you were so happy to work with Democrats, call them. Go on, go: Call Rahm [Emanuel]. Call [Henry] Waxman."

 

Public anger over ObamaCare doesn’t help the industry’s reputation. Many Americans now view drug companies in the same light as "crony capitalist" banks or energy firms that turn to government to bolster the temporary bottom line. Pfizer’s stock price has been decent (due mostly to Mr. Kindler’s business restructuring), but the industry faces threats from a slowdown in innovation.