Drug Makers to Back Baucus Plan With Ad Dollars

The drug industry’s trade group plans to roll out a series of television advertisements in coming weeks specifically to support Senator Max Baucus’s health care overhaul proposal, according to an industry official involved in the planning.

The move would be a follow-up to the deal that drug makers struck in June with Mr. Baucus and the White House. Under that pact, the industry agreed to various givebacks and discounts meant to reduce the nation’s pharmaceutical spending by $80 billion over 10 years.

Shortly after striking that agreement, the trade group — the Pharmaceutical Research and Manufacturers of America, or PhRMA — also set aside $150 million for advertising to support health care legislation.

President Obama has cited the deal with the group as signifying a new era of cooperation. But some critics say the advertising fund could be wielded against alternative approaches to health care legislation. Some House Democrats, including Henry A. Waxman of California, are seeking drug industry givebacks not covered in the deal with Mr. Baucus and the White House.

Up to now, the trade group, led by former Representative Billy Tauzin, a Republican from Louisiana, has contributed $12 million toward an advertising campaign coordinated by a coalition called Americans for Stable Quality Care. Early advertisements focused on general subjects like “Eight Ways Reform Matters to You.”

But an industry official involved in the discussions said the group and its advertising money would now be aimed specifically at the approach being pushed by Mr. Baucus, Democrat of Montana and chairman of the Senate Finance Committee.

The group’s advertising spending has been criticized by people who say drug makers should be forced to make deeper concessions than they have agreed to with Mr. Obama and Mr. Baucus.

James Love, director of the liberal nonprofit research group Knowledge Ecology International, is one of those critics. “Essentially what the U.S. got was not $80 billion,” he said, “but $150 million in Obama campaign contributions.”

The PhRMA Deal: The Plot Thickens?

"In terms of savings for you as a Medicare recipient," President Obama told a town hall attendee yesterday, "the biggest (change) is on prescription drugs, because the prescription drug companies have already said that they would be willing to put up $80 billion in rebates for prescription drugs as part of a health care reform package."

Then the president said, "Now, we may be able to get even more than that.”

That sentence -- seemingly an aside -- could be significant. Because it may indicate that President Obama does not consider himself bound by an agreement upon which the pharmaceutical industry thinks the White House has signed off.

As you may know, there have been some questions as to just what the White House agreed to in a deal Senate Democrats have cut with the pharmaceutical industry. (See our blog post from Saturday for a fuller background, with links.)

Ken Johnson, senior Vice President of the Pharmaceutical Research and Manufacturers of America, or PhRMA , tells ABC News of the president's comment that "clearly it creates a little teeth-gnashing" among PhRMA members, "but we're in this for the long hall and at end of the day remain convinced the Senate Finance Committee will produce a bipartisan bill that will serve as a blueprint for comprehensive health care reform."

In other words, PhRMA remains convinced that Sen. Max Baucus, D-Mont., chair of the Senate Finance Committee, will uphold the deal.

In June, Baucus announced that pharmaceutical companies had agreed to a deal as part of an overall health care reform package, where the companies will provide, as Baucus put it, "affordable prices on prescription drugs when Medicare benefits don't cover the cost of prescriptions," as well as kicking in some money for health care reform efforts.

Former House Energy and Commerce chairman Bill Tauzin, R-La., now the head of PhRMA, said his industry had committed a specific amount of money and part of the deal was Democrats would refrain from seeking more than $80 billion.

That would preclude, for instance, a campaign pledge by then-Sen. Obama to re-negotiate the cost of pharmaceuticals through the Medicare prescription drug benefit.

"$80 billion is the max, no more or less," Tauzin said to the New York Times. "Adding other stuff changes the deal.”

Says Johnson: "in the beginning of this process we made pretty clear the dangers of going above $80 billion; the impact it could have on research and development and the potential job losses in a very fragile economy.

Tauzin said that after the deal was reached with Baucus, he confirmed the terms of the deal with White House Chief if Staff Rahm Emanuel, deputy Chief of Staff Jim Messina, and health care reform czar Nancy-Ann DeParle.

“They blessed the deal,” Tauzin told the Times. "As far we are concerned, that is a done deal. It’s up to the White House and Senator Baucus to follow through.”

On Friday, White House press secretary Robert Gibbs seemed to confirm the deal, saying, "we feel like $80 billion is -- is an appropriate amount. And I think the -- I don't have the statistic in front of me, but I think the House bill has $85 billion in it, so I would argue that we're all in the same ball park."

Asked a reporter: "there is a deal that you won't squeeze any more?"

Said Gibbs: "Well, I hate to blow our cover here, but we announced it publicly."

"But there had been some reports saying you privately told Democratic senators that there is no such deal," Henry said.

"I don't know where that's coming from," Gibbs said. "I don't what that's being based on."

But then the White House seemed to back off the notion that it had agreed to an $80 billion limit.

"The White House, Senate Finance Committee and PhRMA agreed that PhRMA would contribute $80 billion to lower costs as part of the health insurance reform legislation that the President expects to sign this year," Linda Douglass, the communications director of the White House Office of Health Reform, told ABC News Saturday.

Asked if the deal precludes the government engaging in direct negotiations for the Medicare prescription drug benefit, Douglass said "that issue was not discussed" during the White House negotiations with PhRMA.

The president's comments yesterday would seem to indicate that he's not on board with any $80 billion limit.

Says Johnson: "People need to recognize that $80 billion is a huge investment by our companies, and will require them to make some very difficult choices. It's not loose change found in the sofa, it's real money that carries some consequences for our companies."

Drug industry, Pfizer lead in health lobbying

WASHINGTON — The drug industry's trade group and one of the nation's biggest pharmaceutical companies reported spending more money than other health care organizations on lobbying in the second quarter of this year.

With the fight over President Barack Obama's effort to revamp the nation's health care system escalating, the Pharmaceutical Research and Manufacturers of America said it spent $6.2 million lobbying in April, May and June, according to reports to Congress due Monday. Pfizer Inc., the New York-based producer of numerous drugs, ranked second in the health care sector at $5.6 million.

In reports filed by 11 p.m. Monday, 22 health-related associations and companies had reported spending at least $1 million each lobbying during the quarter.

The stakes are huge for the health industry. Congressional Democrats are pushing legislation that could cost roughly $1 trillion over the coming decade, paid for in part by cuts in federal health care programs such as Medicare. Lobbyists have been flooding Capitol Hill for months, and many interest groups have already invested millions of dollars in ad campaigns favoring or opposing various portions of the emerging bills.

According to the nonpartisan Center for Responsive Politics, the health sector reported spending $127 million in lobbying during the first three months of this year, more than any other area.

It can take many days for all the reports to be filed. In the second quarter of 2008, 28 health care concerns reported spending at least $1 million lobbying.

Of the thousands of reports filed by Monday evening covering lobbying on all subjects, only three organizations reported spending more during the second quarter than PhRMA, the drug industry trade group. The American Coalition for Clean Coal Electricity reported spending $11.3 million lobbying at a time when Congress is considering energy legislation. The U.S. Chamber of Commerce, the nation's largest business group, reported spending $7.4 million, and the General Electric Co. reported $7.2 million in lobbying expenditures.

Including its latest report, PhRMA has now spent $13.1 million lobbying so far this year. Pfizer has reported $11.7 million in lobbying expenses for 2009.

Other top lobbying spenders among health-related organizations for this year's second quarter included the American Medical Association, $4 million; Eli Lilly and Co., $3.6 million; the American Hospital Association, $3.5 million, and the Blue Cross and Blue Shield Association, $2.8 million.

Also, GlaxoSmithKline, $2.3 million; CVS Caremark Inc., $2 million; Bayer Corp. and America's Health Insurance Plans, representing the health insurance industry, $1.9 million each; Novartis and the Biotechnology Industry Organization, each $1.8 million, and Metlife Group Inc., $1.7 million.

Also, Sanofi-Aventis U.S. Inc. reported spending $1.6 million in the second quarter; Johnson & Johnson Services Inc. $1.6 million; Merck & Co. Inc. $1.5 million; F. Hoffman-La Roche Ltd. and its affiliates, $1.5 million; the American College of Radiology Association, Wellpoint Inc. and Astrazeneca Pharmaceuticals LP, each $1.2 million, and Siemens Corp. and UnitedHealth Group Inc., $1 million each.

AARP to Endorse Offer Of Drugmaker Price Cuts

AARP, the nation's largest seniors lobby, will give its blessing today to an offer by drug manufacturers to contribute $80 billion over the next decade to reduce the cost of comprehensive health reform, in part by discounting the price of Medicare prescriptions.

Barry Rand, chief executive of AARP, will join President Obama at the White House to announce the endorsement of an organization that boasts 40 million highly engaged, politically active members.

"This is an early win for reform and a major step forward," Rand said in remarks prepared for delivery at the event.

After weeks of secret talks, the pharmaceutical industry trade group voted Friday to dedicate $80 billion to lowering the price of medicines sold to seniors and the government. The unusual offer by the Pharmaceutical Research and Manufacturers of America (PhRMA) is part of its effort to convince skeptical lawmakers that it backs major health-care legislation.

Though the agreement represents a fraction of the total cost of health-care reform, it has been managed for maximum public relations exposure.

News of the PhRMA vote leaked out Friday night. On Saturday afternoon, Senate Finance Committee Chairman Max Baucus (D-Mont.) put out a news release announcing that he had "secured an $80 billion commitment" from drugmakers. Yesterday, AARP let it be known it supported the action. Today, cameras will be invited to record the White House ceremony celebrating the accord.

When the Medicare prescription drug benefit approved by Congress went into effect in 2006, it left a coverage gap that charges seniors the full cost of medications once a patient has received $2,700 worth of drugs, until the total reaches about $6,100. At that point, "catastrophic" coverage kicks in and covers nearly all drug expenses.

"The existence of this gap in coverage has been a continuing injustice that has placed a great burden on many seniors," Obama said over the weekend.

Under the proposal, seniors who fall into the coverage gap known as the "doughnut hole," would pay half price for all brand-name medicines. The discounts could save 3.5 million retirees up to $1,700 a year, according to AARP. In addition, the full price of the drug would count toward a person's out-of-pocket total, thus maximizing the insurance benefit.

"Millions of Americans who fall into the coverage gap stop taking their medications because they cannot afford them," according to Rand's written remarks. "They will have a new opportunity to lead a healthier life."

Some wealthy beneficiaries -- perhaps those earning more than $85,000 a year -- would probably continue to pay full price, according to an industry source.

It was not immediately clear how much of the $80 billion would benefit Medicare beneficiaries directly and what portion would accrue to the federal treasury. The offer is contingent upon enactment of a sweeping health-system overhaul.

For the past week, Obama and congressional Democrats have struggled to overcome anxiety that extending health coverage to tens of millions of uninsured Americans may cost the nation more than $100 billion a year. While surveys show a majority of voters are eager for broad changes to the nation's health system, polls also indicate growing unease over the rising deficit and the financial burden of a series of industry bailouts.

Several senators appearing on talk shows yesterday voiced concerns about the health costs and challenged Obama's support for a government-run insurance program that would be created to compete with private insurers.

"So we're in the position of dialing down some of our expectations to get the costs down so that it's affordable and, most importantly, so that it's paid for," said Sen. Charles E. Grassley of Iowa, the ranking Republican on the Finance Committee.

Pharmaceutical group spent $6.9M lobbying in 1Q

The pharmaceutical industry's main trade group spent more than $6.9 million lobbying in the first quarter on aspects of health care reform, the country's new health secretary and other issues, according to a recent disclosure report.

The Pharmaceutical Research and Manufacturers of America spent $3.6 million on lobbying in the year-ago period. The group's members include Pfizer Inc., Merck & Co., Johnson & Johnson and more than two dozen other U.S. and foreign companies.

PhRMA lobbied on healthcare-related aspects of the 2010 federal budget, the federal stimulus plan, the budgets of health-related agencies, measures on health information technology and a proposal requiring research comparing effectiveness of different medical treatments.

The group also lobbied Congress on the confirmation of Kansas Gov. Kathleen Sebelius as secretary of health and human services, ahead of her approval by Congress on April 28.

The trade group lobbied on multiple bills to allow generic versions of expensive biologic drugs, patent law reform, and a proposal to try a pilot program to provide expertise in patent cases to local district justices.

PhRMA also lobbied on legislation regarding the safety of medicines imported from other countries, reauthorization of the State Children's Health Insurance Program, pricing of drugs sold under the Medicaid program, and proposed requirements to disclose consulting and speaking fees and other payments to physicians.

Other lobbying targets included bills on international patent protection and trade adjustment assistance, according to a disclosure report filed April 20 with the House clerk's office.

Besides Congress, PhRMA lobbied the Department of Health and Human Services and several of its agencies, the Commerce Department, the Patent and Trademark office and the U.S. Trade Representative.

Among those registered to lobby on the trade group's behalf in the first quarter were: Jennifer Swenson, former legislative director for Sen. Pat Roberts, R-Kan.; Matt Sulkala, former senior legislative assistant to Rep. Allen Boyd, D-Fla.; Valerie Jewett, former legislative director to Rep. Rodney Frelinguysen, R-N.J.; Michael Woody, formerly a professional staffer on the Senate Health, Education, Labor & Pensions Committee; and David Boyer, who had served in about a half-dozen positions in the Food and Drug Administration, the White House and elsewhere.

Pharmaceutical bus offers prescription help

Don Frye is covered by Blue Cross Blue Shield as well as Medicare, but there are still some prescriptions he can’t get filled under those plans.

So, on a hot Thursday afternoon, the Bozeman man sat on board a large, orange bus parked in the Bozeman Library parking lot.

The bus is sponsored by a consortium of pharmaceutical companies and aims to help people who can’t afford their medication by filling prescriptions for free or nearly free.

People like Frye walked onto the bus, answered a few questions about what medication they needed and what means they had to pay for prescriptions, and then were given information on what assistance the pharmaceutical companies could offer.

Jeff Trewhitt, a spokesman for PhRMA, the lead lobbying group for the pharmaceutical industry, said the bus was a way to consolidate the efforts of 40 companies that each has an individual assistance programs.

“We want the people who need these medications to get them,” Trewhitt said.

The industry Trewhitt works for has come under fire for the cost of its product and size of its profit margin. In Washington, lawmakers are eyeing ways to knock down the costs of drugs.

Thus, some have seen the bus n which TV personality Montel Williams pitches on advertisements broadcast nationwide n as a public relations ploy for an embattled industry.

The May issue of Health Affairs reports that a survey of the various assistance programs offered by drug companies “found much variability in their structures and application processes.”

“Most cover one or two drugs. Only 4 percent disclosed how many patients they had directly helped, and half would not disclose their income eligibility criteria,” the article says. “A better understanding of (patient assistance programs) might clarify their role in improving access to medications, the adequacy of existing public programs, and their impact on cost-effective medication use.”

As a whole, the Partnership for Prescriptions Assistance has helped 20,000 people in Montana and 6 million in all, Trewhitt said.

And Trewhitt said good publicity is not the aim, and that in terms of health care costs, pharmaceuticals are hardly the problem.

“Ten cents of every health care dollar” goes to medication, he said.

Also, prescriptions are a lot cheaper than the surgeries and hospital stays that can be avoided.

“It’s that there are too many people who are uninsured, and when you don’t have coverage, all health care is expensive,” he said.

Could the industry do more to lower the cost of prescriptions?

“We feel we have a cost-effective product,” Trewhitt said.

“We have set up these programs to lend a helping hand,” he said.

For Frye, he was happy to have the chance to see what assistance might be available.

“It’s good for us. We’re just seeing what’s available,” he said.

A Fierce Fight Over Free Lunches For Physicians

Your doctor just put you on a new medication — the latest, cutting edge drug, he says.

Does it make a difference that the company that makes it just bought him lunch?

The answer to that question lies at the heart of a contentious national debate that is now playing out at the state Capitol. Lawmakers are considering a proposal that would outlaw most gifts — including meals — to health care providers from drug or medical-device makers and require the disclosure of any drug or device company payments to physicians exceeding $1,000.

The proposal comes as the ties between doctors and drug and medical device companies, once an accepted hallmark of medicine, face increased scrutiny. Several states, including Vermont, New Hampshire, Maine and Massachusetts, have already clamped down on the financial relationships, banning most gifts outright or requiring drug companies to disclose payments to doctors.

Now Connecticut has joined the fray, with a proposal that has touched off a fierce fight.

On one side: consumer advocates, health care watchdogs and some doctors who say industry gifts, no matter how small, can influence doctors to prescribe expensive, new drugs instead of less-costly generics. This drives up health care costs and potentially harms patients, they say.

"Patients need to know that their doctors are writing prescriptions based on the best scientific evidence and in the patient's best interests, and not because of pressure from drug companies," Dr. Stephen R. Smith, a New London physician, said in written testimony on the bill.

On the other side: the Connecticut Pharmacists Association, and pharmaceutical and biotech industry groups, who say existing federal rules and industry ethics make a state law unnecessary. A new pharmaceutical industry code of ethics, for example, has prohibited gifts like sporting event tickets or trips to Las Vegas, leaving the industry to give small gifts, like meals, that representatives say are simply a way to fit drug company representatives into a doctor's busy schedule.

"It's preposterous that a physician would advise against his best professional judgment because of a free sandwich," said Paul Pescatello, president and CEO of Connecticut United for Research Excellence, a trade group for the state's bio-pharmaceutical and life science companies.

Extensive Ties

There's little question that the interactions between doctors and the pharmaceutical industry are extensive.

The industry spends billions of dollars a year on marketing to doctors, and studies have indicated it reaches nearly all of them. A survey of physicians, reported in the New England Journal of Medicine in 2007, found that 94 percent said they had some type of relationship with the industry. Most of the relationships involved receiving meals or free drug samples, but doctors also reported receiving tickets to sporting events, payments for serving as a speaker and reimbursement for travel and meeting admission costs.

The dispute is whether the gifts affect the decisions doctors make when it comes to patient care.

Critics of the gifts say the implications are enormous: doctors may feel pressure to prescribe the drugs pitched during a free lunch, even if they are no more effective than cheaper generic drugs or not the best for a particular patient.

The proposed marketing limitations have drawn the support of state Attorney General Richard Blumenthal, the Connecticut Center for Patient Safety and the Consumers Union, the publisher of Consumer Reports.

State Senate President Pro Tem Donald E. Williams Jr. sees the proposal as a way to lower health care costs, which he said is critical to making the system more accessible and affordable.

"When we look at the gift ban, what we're really talking about is finding ways that can discourage the prescribing of more expensive prescription drugs where less expensive generics could be just as effective," he said.

Supporters of the bill cite studies that show relationships with drug companies may influence doctors to prescribe the company's drugs — even if other drugs may be more beneficial.

Citing that research, the prestigious Institute of Medicine last month offered a set of wide-ranging recommendations aimed at eliminating the influence of industry marketing on medicine. The institute recommended, among other things, eliminating all gifts from the industry to doctors and having Congress create a national reporting program to require all pharmaceutical, medical device and biotech companies to make public all payments to doctors and medical groups.

Reforms Unneeded

But opponents of the proposed bill say state action is unnecessary, in part because federal anti-kickback rules and voluntary professional and industry codes of ethics already address payments to doctors. A new code of ethics by the Pharmaceutical Research and Manufacturers of America took effect in January and limits the types of gifts allowed, they say.

In testimony on the bill, the trade group, known as PhRMA, characterized meals provided to health care providers as "professional courtesy" and a way to make sure that pharmaceutical representatives and their educational materials can be fit into doctors' busy schedules.

Pescatello said additional regulations could be cumbersome for smaller biotech companies that might have to hire a law firm or assign an employee to make sure they are complying. It would hit particularly hard at a time when the industry is facing a tough economy, less money from venture capitalists and the uncertainty of potential federal health reform.

"They don't see having another regulatory scheme to comply with as useful," he said.

PhRMA has argued that the bill could potentially discourage drug development and access to clinical trials in Connecticut.

The Connecticut State Medical Society has also raised concerns with the bill. Dr. William A. Handelman, the society's president, said it was somewhat insulting to imply that small gifts like pens or meals would corrupt doctors, but that banning such trivial items was not something to fight over.

But Handelman said he had concerns about the disclosure requirements, which he said could add significant workload to medical practices and may not give the public a complete picture of how the money is used.

It's not clear whether or when the legislature, saddled with a massive budget mess and nearing the end of the session, will take action on the proposal, which passed the public health committee by a vote of 21-9 in March.

Smith, a family physician at the Community Health Center of New London and a board member of the National Physicians Alliance, which is campaigning to reduce marketing influence on the profession, said he's concerned about the proposal's chances against the powerful PhRMA lobby in the waning days of the legislative session.

Smith sees the regulation as an important step in restoring trust in the profession, which he said has been eroded by cases involving doctors with conflicts of interest who may have financial stakes in products or tests they recommend for their patients.

"I think there's been a recognition on the part of medicine as a profession that we have lost our credibility with the public," he said.

Beware those at the health-care reform table

THE WHITE House recently held a summit to discuss health-care reforms. Present around the table were six major industry players that have been, in one form or another, part of the problem health care has had in this country. I will refrain from using the analogy of a fox guarding the hen house but instead will try to put the issue in a proper light.

The faces around the table represented the American Health Insurance Plans, the Pharmaceutical Research and Manufacturers of America (PhRMA), the American Medical Association, the American Hospital Association, the Service Employees International Union, and the Advanced Medical Technology Association.

Of great interest and amusement is a gentlem

an representing the pharmaceutical industry. Former congressman Billy Tauzin played a pivotal role in bulldozing the Medicare Modernization Act of 2003 - the prescription drug benefit - through Congress. Shortly after the bill was passed, he became the highly paid president of PhRMA.

Of interest also is the participation of the American Medical Association. A pale reminder of its previous robust past, the AMA represents merely one third of American doctors. It is more in tune and comfortable with what medicine once was than what it is now.

The genesis of this extraordinary meeting in the White House is interesting. According to published reports, the major insurance companies approached the Obama Administration and offered to squeeze $2 trillion from health-care expenditures over the next 10 years. The White House, to its credit, did not salivate over this significant offer but insisted that the proposal would have to have a broad acceptance by all the major players in health care.

Why all of a sudden the pangs of conscience among those who have in the past thumbed their noses at any effort to reform health care in this country? For one, the mood of the country has changed since Hillary Clinton's ill-fated effort to reform health care at the beginning of her husband's first term as president in 1993. Health care has become very expensive and increasingly out of reach for a good number of Americans. Coupled with the fact that President Obama is determined to overhaul the antiquated system and deliver on his campaign promise, the usual villains have very little choice.

They are adamantly against any kind of government-sponsored public health plan that would be available to middle-class Americans. Health insurers are fearful that such a plan would cut into their profits and just might drive them out of business. A great majority of Republicans and quite a few Democrats are against a government-sponsored plan. They are quick to point an accusing finger at the single-payer plans that are in place in most industrialized countries. In reality, this is nothing but fear mongering.

Ours is the only industrialized country that spends $6,102 per person on health care every year, or 15.3 percent of the U.S. economy. Other industrialized countries spend a little more than half that amount and people in those countries live longer, have better health, and are generally more satisfied with their health care. And they do not have a whopping 16 percent of their population without health coverage as we do.

According to World Health Organization, we are 37th in health care among 191 countries of the world; Italy and France get the top spots. We are 33rd in death rates for children under the age of five and we rank lower than some Saharan Africa countries for immunization. It is, simply put, a national disgrace.

Already, interest groups are getting active to thwart any effort at reforming the system. A new group, Conservatives for Patients' Rights (with an amusing abbreviation of CPR), is touting "free choice" in health care. This is akin to appointing Genghis Khan to oversee human rights. In a previous incarnation, this group was behind the notorious Harry and Louise television ads that helped sink Hillary Clinton's 1993 efforts. They would certainly like to swift-boat any effort to reform health care.

President Obama has called the recent White House meeting a watershed event in the long and elusive quest for health-care reform. I hope he is right, but so far no specifics have emerged from deliberations. We will have to see if the group coming to the White House brought some real gift for the American people or merely another bunch of new and improved Band-Aids.

Our President will be best advised if he would brush up on Virgil's Latin epic on the Trojan War and a particular wooden horse of the same name.

Adversaries team up on health care

Two of the nation’s most influential health care adversaries are uniting to promote key portions of health care reform but leave unaddressed the debate’s most controversial element: the creation of a public insurance plan.

The consumer group Families USA and the trade association Pharmaceutical Research and Manufacturers of America are launching a multimillion-dollar lobbying campaign to push the package of reforms, which includes expanding Medicaid. The partnership could significantly reshape the debate over health care reform.

The groups will begin asking Congress this week to expand Medicaid eligibility to cover more of the nation’s low-income families, provide income-adjusted subsidies for middle-class families and cap out-of-pocket expenditures for people with insurance, POLITICO has learned.

The proposal could bolster the chances of expanding the Medicaid program, an option that Senate Finance Committee Chairman Max Baucus (D-Mont.) and the committee’s ranking Republican, Sen. Chuck Grassley of Iowa, are reportedly discussing.

Indeed, a stamp of approval from the groups could give all three ideas more political currency among both parties. Families USA is influential among Democrats, and PhRMA holds sway over many Republicans.

It’s not the first time the two groups have partnered. Families USA and PhRMA supported expansion of children’s health care coverage and spent $35 million during the two-year campaign to pass it.

Their new planned lobbying and media blitz could also change the dynamic of the debate over whether to create a public health insurance plan that would compete with private coverage — a tremendously controversial proposal that Families USA and PhRMA fiercely disagree on.

Not surprisingly, the two groups have very different ideas about how their reform proposals will affect the public plan debate.

Families USA’s founding executive director, Ron Pollack, said the reforms provide the cornerstones for broader health care reform, including a debate over the public plan option.

But PhRMA President Billy Tauzin makes it no secret that he hopes the proposal “helps us avoid the debate over whether a public plan is needed to get people this coverage.”

“The last place I want to be in is where we’re fighting over a public plan. It takes us all the way from the table, and that’s not a good thing,” Tauzin said. “That’s the place we would have to draw a line in the sand because we know what it causes, we know what it results in, and if it results in lack of access, that’s exactly the wrong way to go.”

PhRMA and critics of the public plan option argue that it would lead to government-run health care. Supporters argue that it’s crucial to providing universal coverage.

But that’s not to say that PhRMA believes the proposal it’s pushing is perfect. Medicaid is still a government-regulated program with price controls and less-than-robust drug coverage. But the group hopes that the proposals will spur Medicaid reform.

U.S. consumer group, drug companies want Medicaid expanded

WASHINGTON - A leading consumer group and a trade association representing major drug companies said on Tuesday they would spend millions to promote three changes to the U.S. healthcare system, including expanding government insurance for the poor.

Families USA and the Pharmaceutical Research and Manufacturers of America (PhRMA) said they would launch a multimillion-dollar advertising and lobbying campaign to get lawmakers to expand Medicaid insurance to more people, provide subsidies for moderate income individuals and families to buy insurance and cap out-of-pocket expenses for low- and middle-income people with insurance.

Ron Pollack, executive director of Families USA, said at a news conference with PhRMA chief Billy Tauzin that the groups, often on opposite sides of issues, had found areas of agreement that were "designed to make sure nobody's left out of the system."

Families USA has attacked drugmakers' prices and advocated importation of cheaper medicines and other policies opposed by PhRMA, which represents Pfizer Inc, GlaxoSmithKline PLC and Merck & Co Inc and other companies.

Despite lingering differences on some major issues, Tauzin said there was "a lot of common ground."

Soaring health care costs, rising unemployment and millions of uninsured Americans are putting pressure on lawmakers to reform the health care system in the United States.

PhRMA and Families USA did not address a major question facing lawmakers about whether a government-run plan would be part of the mix of insurance options that will be available to Americans.

Democrats want a public plan, but insurers and Republicans argue that private companies would be unable to compete with a potentially cheaper government-run option.

Senate Democrats who are drafting health insurance legislation are aiming to have bills ready for consideration by early June.

Drugmakers could expand their markets if more people had health insurance, but they could also face government efforts to lower drug prices.

Tauzin said pharmaceutical companies were concerned about a call for lower drug prices in Medicaid, which he called "an extremely regulated area of healthcare" that needed changes.