Monday, December 16, 2019
U.S. LOBBYISTS PREPARE TO SEIZE “HISTORIC OPPORTUNITY” IN TORY-LED BREXIT TO SHRED CONSUMER SAFEGUARDS, RAISE DRUG PRICES
December 9 2019, 6:00 a.m.
minister’s promise to leave
the European Union. Johnson has remade the Conservative Party, pushing out
longtime party members wary of a firm break from the EU, to cast the election
as a chance to build a parliamentary majority focused on finalizing Brexit.
The original Brexit referendum
that passed in June 2016 pitted populists against the establishment, with
banks funneling huge
amounts of money to oppose the referendum, which was cast as a measure to
return taxes and power to local British citizens, while restoring the
sovereignty of the U.K.’s borders against what was cast as unfair trade
and uncontrolled migration.
But the politics of the deal
have shifted over time, with hard-liners gaining power within Tory leadership
and demanding a radical break from the EU. Corporate lobbyists now see an
opportunity to use Johnson’s proposed swift exit from the EU as a way to forge
bilateral trade deals, including one between the U.S. and the U.K, that
would outsource local authority to rules set by an array of international
business interests. A wide range of industries are primed to take
advantage of the deal to evade EU consumer safeguards and drug pricing rules.
Representatives from American pork to Silicon Valley and everything in between
are trying to influence the negotiations.
Departing the EU could mean
that British consumers would no longer be protected by broad EU-wide
regulations on chemicals, food, and cosmetics, among other products. Several
international corporate groups have pushed to ensure that in the event of
Brexit, such safeguards are abandoned in exchange for a regulatory standard
that conforms to the norms of the U.S.
Consultants working
directly on the Brexit deal in London and in Washington, D.C., have
asked to limit the ability of British regulators to set the price for
pharmaceutical drugs, lift safety restrictions on pesticides and agricultural
products, and constrain the ability for the U.K. to enact its own data privacy
laws.
In January, a lengthy hearing hosted
by trade officials from both countries provided a forum in D.C. for
industry to lay out its agenda on what should happen after
Brexit. Before the hearing, two major industry groups sent letters
outlining their agendas for the Brexit negotiations in 2019.
The Pharmaceutical Research
and Manufacturers of America, the lobby group that represents the largest
drugmakers in the world, insisted that
any U.S.-U.K. deal “must recognize that prices of medicines should be based on
a variety of value criteria.” PhRMA called for changes in the way the U.K.’s
National Health Service sets price controls through comparative
effectiveness research, an effort to control the costs of drugs using
clinical research.
The Biotechnology Innovation
Organization, a lobby group for the biopharmaceutical industry, made
similar demands in a letter to trade officials for the U.K., calling to
do more in “shouldering a fair share of the costs of innovation.” BIO
suggests that in order to ensure fair treatment for drugmakers, companies
should have the right to petition an “independent body” to overrule decisions
made by the NHS.
At the hearing, Craig
Thorn, a lobbyist representing the U.S.’s National Pork Producers Council, told
the Trump administration that the proposed U.S.-U.K. deal present a “historic opportunity,”
citing his client’s desire to continue trade with the U.K. by evading EU
restrictions on certain feed additives and antibiotics used widely on American
pork. Similarly, Floyd Gaibler, a representative of the U.S. Grains
Council, said that the deal provides a window for American agriculture to avoid
the EU restrictions on pesticides that have been or will soon be banned.
Silicon Valley, similarly,
views Brexit as a chance to bypass EU-wide limits on data collection, or even
new U.K.-based rules. Several technology lobbyists have pushed to provide trade
provisions between the U.S. and U.K. that outlaw so-called
data localization requirements. Some regulators have looked at the need for
technology firms to store consumer data in local servers, to ensure that it is
not resold or abused in any way.
Other corporate demands
by U.S.-based groups are spelled out in a series of requests and
testimony made by lobbyists before the Office of the U.S. Trade Representative,
the federal agency entrusted with negotiating trade deals. Federal lobbying
disclosures show a number of interests, including Cargill, IBM, Koch
Industries, the Motion
Picture Association of America, the Ohio
Corn and Wheat Growers Association, Ford
Motor Company, the National
Association of Manufacturers, and Salesforce, have
lobbied on the potential U.K. deal in recent months.
It’s not just U.S.-based
interest groups seeking to retool corporate standards through a hard Brexit.
The Institute of Economic Affairs, a major conservative think
tank in London, has met repeatedly with Conservative Party leaders and
American trade officials to shape a new U.S.-U.K. trade deal that mirrors the
demands of industry groups.
Peter Allgeier, a former U.S.
trade official, testifying on behalf of the Institute of Economic Affairs at
the hearing earlier this year, called for rules that relax regulatory standards
and bring the U.K. in line with an American approach to business. “In areas
such as food safety and automobile standards, rigid prescriptive EU standards
have stifled innovation and impeded U.S. exports,” said Allgeier.
Allgeier has worked
closely with Shanker Singham, a consultant known as the “Brexiteers’
Brain” for his expansive influence over Tory trade strategy and Johnson’s
approach to Brexit. Singham holds a position with the Institute of Economic
Affairs as the organization’s director for trade policy.
The two men are also
consultants to business interests while they help guide the direction of
Brexit. In an email to The Intercept, Allgeier said that his “list of
clients is proprietary information.” Singham, who did not respond to a request
for comment, works with
the European lobbying firm Grayling, which represents pharmaceutical
firms such as AbbVie, Bayer, and Johnson & Johnson, according to EU
disclosures.
The potential for a Brexit
deal to serve as a corporate Trojan horse became a campaign issue last month
when Labour Leader Jeremy Corbyn highlighted documents detailing ongoing
negotiations between representatives from the U.K.’s Department for
International Trade, trade officials from the Trump administration, and
industry, discussing the ongoing U.S.-U.K. trade agreement. “We are talking
here about secret talks for a deal with Donald Trump after Brexit,”
Corbyn declared,
citing the potential for higher drug costs and privatization of the NHS.
Dean Baker, a senior economist
with the Center for Economic and Policy Research, noted in an email to The
Intercept that such regulatory demands by industry are “always part of trade
deals.” Baker said that U.S. trade to the U.K. is relatively trivial, at around
2.5 percent of GDP, making incentives for rushing a trade agreement relatively
small.
“On the other hand,” Baker
wrote, “paying higher prices for drugs and being unable to regulate the
Internet is likely to impose very substantial costs.”
“A government weighing these
factors carefully would almost certainly refuse a deal, but a Johnson
government that made Brexit front and center is likely to feel strong political
pressure to have a deal with the hope few people will pay much attention to the
content,” Baker noted. “Johnson could tout the deal as a big success. People
would only see the negative effects years down the road.”
PRIVATIZATION AT THE NHS? AMERICAN BUSINESS INTERESTS SEEK GROWING SHARE OF U.K.’S HEALTH SYSTEM
December 10 2019, 10:28 a.m.
PRIVATIZATION OF the
National Health Service, the marquee health system of the United Kingdom that
provides essential health care services, has become a point of contention in
the general election, as voters head to the polls on Thursday.
Labour Party leader Jeremy
Corbyn alleges
that his opponents, led by the Conservative Party’s Boris Johnson, are
intent on continuing a push to privatize NHS services, placing the cherished
health agency up for sale to predatory interests based in the United States
known for shifting costs to consumers and for reaping profits through providing
lower standards of care often at higher costs. Late last month, Corbyn released
a set of over 400 trade documents between the U.S. and the U.K.,
purporting to show the U.S. seeking “total market access” to the U.K. health
care market. The Tories adamantly reject the claim. Over the weekend,
after an allegation of Russian interference surfaced, Corbyn refused
to disclose the source of the documents.
The back and forth, as it
played out in the British press, was focused on the documents Corbyn
released and has largely left out the track record that American
health care companies have in seeking to capitalize on recent NHS
privatization schemes. Publicly available corporate presentations
and transcripts of investor calls with health care executives suggest that
the American health care industry has long had its sights on harnessing a wave
of privatization and outsourcing at the NHS — both measures sought by senior
Conservative Party officials.
Acadia Healthcare Company, a
firm based in Franklin, Tennessee, owns the Priory chain of hospitals in
the U.K. The company has repeatedly boasted to
investors that it continues to see revenue growth from its NHS operations.
Acadia CEO Debra Osteen, on an investor conference call last month discussing
the firm’s U.K. assets, said that her company is “well positioned to take
advantage of future demands across our service lines.”
Steve Filton, the executive
vice president and chief financial officer of Universal Health Services, a
Pennsylvania health care company, presented
last year at the Global Healthcare Conference hosted by UBS, the Swiss
investment bank. In 2014, UHS made an acquisition into the U.K. market,
purchasing Cygnet Health Care, and continued an acquisition spree to
become one of the largest operator of privately-run psychiatric hospitals
in the NHS system.
“What we like about the UK is
a system that, for those of you familiar with the UK health care system, the
National Health Service is effectively the insurer for the entire British
population,” Filton said, according to a transcript of his 2018 remarks.
Filton noted that as the NHS
pushes to “outsource more and more of those patients to the private
sector,” a dynamic that UHS is poised to benefit from, the firm
stands “to capture a lot of that.”
Cynthia Brinkley, an executive
with Centene Corporation, the St. Louis-based health insurance giant,
noted “the UK market provides an interesting and we think potentially very
exciting example of a healthcare system where policymakers are signaling their
interest in making transformational change,” speaking at the company’s annual
investor day conference three years ago.
In 2016, Centene purchased a
controlling stake the Practice Group, a UK firm providing primary care and
outpatient services such as ophthalmology. Earlier this year, Centene further
invested $50
million into Babylon Health, a British health care startup that
currently provides artificial intelligence services to the NHS.
Tenet Healthcare, the
U.S.-based hospital chain, has filed investor presentations describing
how the “UK is an increasingly attractive market,” citing a new push towards
privatization and patient demand. Tenet spun off its U.K. division to NMC
Health, a company based in the United Arab Emirates, last year.
Other giants of the U.S.
health care industry have built a stake into the NHS market. UnitedHealth, the
health insurance provider, owns Optum, which provides a range of management
services to the NHS. HCA Healthcare, the for-profit hospital
chain once led by Sen. Rick Scott, R-Fla., also owns several hospitals in
the U.K.
Investigations from The
Guardian show that private firms have received about £15
billion in contracts for the NHS over the last five years, a rate of
privatization that increased markedly following the
end of Labour control of government. In 2012, the coalition Lib Dem-Tory
government passed the
Health and Social Care Act, which lifted the cap on the amount of money
hospitals could spend on private sector care, from 2 percent to 49 percent.
The wave of privatization has
left scandals in its wake. Undercover reporting earlier this year
revealed videos of
staff mocking and busing mentally disabled patients in facilities owned by
Cygnet, the Universal Health Services-owned firm. Other reporting, including a
yearlong investigation by
BuzzFeed News, found widespread complaints that Cygnet staff neglected patients
in their care. Priory, the health care company owned by Acadia, was fined £300,000 this
year over the death of a 12-year-old at a NHS hospital run by the firm, a
scandal that has led to rumors that
Acadia may try to sell off the firm.
Last Friday, Johnson again
rejected claims that the NHS would face further privatization, telling a radio
program that the service is “not
for sale.”
Despite claims by Tory leaders
that NHS privatization is not on the table, the current circle of Johnson
allies remains close to the privatization debate. Dominic Cummings, a
political adviser who serves as the most senior aid to Johnson, previously
worked for Babylon Health, a potential conflict of interest highlighted by
the media in October. The Mirror has reported on
several Tory MPs who have either received campaign contributions from private
health care interests, or have served as consultants to firms that would
benefit from further outsourcing.
The playbook for NHS
privatization was articulated in a manifesto released in
2011 by Tory backbench MPs Liz Truss, Priti Patel, Dominic Raab, Kwasi
Kwarteng, and Chris Skidmore. The lawmakers, at the time relatively obscure
members of the party, argued in the document, titled “After the
Coalition,” that a newly empowered Conservative Party should one day move to
make “two thirds” of hospitals “privately or not-for-profit,” arguing such
reforms could capture the “extra efficiencies private companies can provide.”
Raab and Patel, notably, further articulated a
plan to place more health care costs on the individual.
As journalist Solomon
Hughes has reported,
the same group of backbench MPs behind the manifesto are now are all
ministers in Johnson’s reshuffled cabinet, placing the once radical group
firmly within reach of implementing their goals.
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