To determine whether Big Pharma’s $80 billion contribution to the Big O’s health reform movement represents a magnanimous gesture or a negotiation ploy designed to save $20 billion, it’s worth taking a moment to review pertinent history.

Sixteen years ago, the pharmaceutical industry teamed up with Big Insurance and providers to sink HillaryCare.

This time ‘round, it has chosen to defend its interests by sitting at the table, in part because that’s what  everyone else did.

Its interests are to maintain drug prices and profit, which means insurers and providers would be left to take the cost-reduction hit.

Big Pharma loves the idea of universal health coverage, since enabling the uninsured to gain access to its products will increase sales by some $18 billion per year.

It’s also a fan of payment schemes that foster disease prevention, since they pump up sales of its cardiac and diabetes drugs.

Big Pharma has spent lavishly to push this agenda. Company disclosure reports reveal it poured $47.4 million into lobbying efforts in Q1, 2009 alone, up 36% from last year.

AZ Chief Executive David Brennan told the Wall Street Journal that since prescription drugs account for “just about 10% of the overall cost” of US spending health care, the cost cutters ought to look elsewhere.

Pfizer Chief Executive Jeffrey Kindler’s against a Medicare-like public insurance plan that would enact “price controls” on drugs, robbing the industry of just rewards for the risk associated with drug development.

Meanwhile, the industry has bumped prices on many drugs more than 15% in the last quarter, according to data from Credit Suisse, in all likelihood to squeeze out every penny from its pills before its patents perish and policymakers pare prices.

Still, Big O spokesperson Linda Douglass praised the industry for playing in the band. Big Pharma is “agreeing we can no longer live with the status quo. It wasn’t that way 15 years ago,” she reasoned.

The Pharmaceutical Research and Manufacturers of America (PhRMA) has agreed to cut prices on drugs purchased by Medicare in a symbolic gesture designed to show support for the Big O’s scheme to overhaul America’s Rube Goldberg health system.

In effect, Big Pharma is pledging to cut $80 billion off its charges to the Feds over the next 10 years, according to a Washington Post post source who requested anonymity. 

“We applaud the president’s efforts on health care reform and are pleased to participate to expand access to medicines to seniors and disabled persons,” Kevin Sharer told the Post. Sharer was the chairman of PhRMA before becoming CEO at Amgen.

The proposal would affect 3.4 million elderly and disabled Americans that fall into the “doughnut hole,” a coverage gap in which Medicare patients end up paying the sticker price for brand-name drugs after incurring $2,200 in partially subsidized drug costs and before reaching a $5,100 outer limit, at which point the subsidies kick-in once again.

The proposal is that Big Pharma will offer 50% discounts to Medicare recipients that have fallen into the “doughnut hole,” and throw in some perks to bring the total cuts to $80 billion.

“This is real money on the table,” the source told the Post.

Big Pharma’s offer leaves the Big O to find another $920 billion to pay for the cost of the overhaul. Apparently he has made some serious coin in this regard by ordering inspections of the couches occupied by foreign dignitaries during White House visits.

Obama had hoped to snag $100 billion from Big Pharma, and some insiders feel the latter’s $80 billion offer amounted to a public negotiation ploy designed to save the industry the difference. 

“There was a great deal of sticker shock” regarding the $100 billion proposal, according to a Big Pharma executive who also spoke on conditions of anonymity.