Billy Tauzin, the former Louisiana congressman, is resigning as president of the drug industry trade group Pharmaceutical Research and Manufacturers of America amid internal disputes over its pact with the White House to trade political support for favorable terms in the proposed health care overhaul.
As the industry’s top lobbyist, Mr. Tauzin brokered the deal with the White House and Max Baucus, chairman of the Senate finance committee, last summer to limit the drug industry’s total costs under the proposed health care overhaul to $80 billion over 10 years.
Mr. Tauzin’s departure is the latest unexpected fallout of the Republican upset in the Massachusetts Senate race, which abruptly transformed the health care overhaul from a near-inevitability to a daunting cause.
Like almost every other seasoned Washington player, Mr. Tauzin, who makes $2 million a year, bet the health care on board early – only to watch it come to a screeching halt.
Under his direction — and amid some protests from its board — the organization had backed up its end of the deal by spending more than $100 million on television advertising to promote the plan.
But after the health care overhaul stalled when Democrats lost the Massachusetts Senate seat, some industry leaders felt the trade group had gone too far giving concessions and could lose on some important legislative issues without gaining the protection it had sought.
The terms and nature of the group’s deal with the White House deal was initially undisclosed by either Mr. Tauzin or the Obama administration. But when Congressional liberals began to press to take more out of the industry — potentially by allowing importation of cheaper drugs from Canada or permitting Medicare to bargain for lower drug prices — Mr. Tauzin publicly accused the White House of failing to stand for its end of a quid pro quo.
The arrangement — confirmed by White House officials and later in Congress — became a source of controversy among liberals who faulted the administration for giving away too much and Republicans who had traditionally been supported by the pharmaceutical industry. It contributed to the perception that the Democrats were negotiating the terms of the health care overhaul in secret meetings.
But the deal was also controversial within the drug industry, people familiar with the group’s deliberations said, because some on its board questioned whether the agreement would pay off for them. And when the Republican victory in the Massachusetts Senate seat put the brakes on the health care process, many in the trade group known as PhRMA grumbled that it had all been for naught, these people said.
Informed Thursday night of Mr. Tauzin’s plans to resign, Kathleeen Jaeger , president of the Generic Pharmaceutical Association, which sometimes crossed swords with PhRMA, said she was surprised. “He has done a fantastic job for the brand pharmaceutical industry,” she said. “Billy is a master of politics and policy.”
Officials for the trade association and the White House declined to comment.
A friend of Mr. Tauzin, speaking on condition of anonymity, defended his role, arguing that it was not his fault the overhaul went off track. This friend said Mr. Tauzin, who is 66, was leaving the trade group job voluntarily to pursue other activities before he retired. Mr. Tauzin will remain with the organization until June to help pick a successor.
Mr. Tauzin represented Louisiana in Congress for a quarter century first as a Democrat and then later after switching to the Republican party in 1995. He served as chairman of the House Commerce Committee when it recommended expanding drug benefits to senior citizens in Medicare.
Leaving for the PhRMA job after that, Mr. Tauzin drew some criticism for his Medicare work in Congress, but he insisted the PhRMA job had not been offered to him until he had decided to leave Congress and accepted another job, with the motion picture trade association. Mr. Tauzin announced his new job and left the House with a year left in his term. In 2007, the Democrats added a new provision to the House ethics code known as the “Tauzin rule,” which specifically bars a lawmaker from negotiating deals for future employment while still on the job.
Mr. Tauzin said he took the PhRMA job after he learned he was diagnosed intestinal cancer. He has often credited pharmaceutical drugs used to fight that cancer for saving his life.