In 2003, Tauzin helped shepherd through one of the great corporate giveaways in American medicine: President George W. Bush’s Medicare Part D prescription-drug plan.
The rationale for Part D was noble enough. It was designed to ease the squeeze on seniors who saw fixed incomes eaten up by the cost of their prescription drugs, which were rising at a double-digit clip.
But instead of running the government-subsidized program through Medicare, where it could have been administered at a fraction of the price, Republicans handed the job to the insurance industry. They also teamed with Democrats such as Baucus and Sen. John Breaux (D-Louisiana) to ban Medicare from negotiating prices.
That meant that instead of using Medicare’s massive size to extract price breaks, taxpayers would have to pay whatever drug makers felt like charging the insurers. According to the Congressional Budget Office, it amounted to a $137 billion giveaway over ten years.
When the bill took effect, drugmakers saw a 34 percent spike in profits. By then, not surprisingly, Tauzin had left Congress to become president of the Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry’s trade organization. Breaux left a year later to open a lobbying firm, where he received a $300,000 contract to lobby for Big Pharma.