Ryan Grim has a good tick-tock on the failure of the Dorgan amendment last night, delivering a huge victory for the pharmaceutical industry and a blow to consumers who could have saved over $100 billion in prescription drug costs. 30 Democrats and Joe Lieberman ended up voting against this amendment, preserving a backroom deal between PhRMa and the White House to limit their exposure to profit reductions in the overall health care bill.

Grim confirms that the linchpin to this treachery was a deal discussed by Senate leadership the night before, as I surmised previously:

One of those things that developed in the intervening period: a deal to kill the Dorgan amendment in exchange for closing the so-called doughnut hole — the period of time when Medicare recipients must pay the full cost of drugs.

HuffPost asked Sen. Sheldon Whitehouse (D-R.I.), who is generally supportive of reimportation but voted against, why he did so.

“The colloquy yesterday, between Leader [Harry] Reid and Chairman [Max] Baucus and Chairman [Chris] Dodd, did not happen in a vacuum,” said Whitehouse, carefully choosing his words. A colloquy is a public conversation on the Senate floor that often is used to ratify a deal struck in private.

What was the subject of the colloquy?

“Closing the doughnut hole,” said Whitehouse. A senate Democratic aide confirmed that the doughnut-hole move was largely made in exchange for votes to kill Dorgan’s amendment. “That was more or less the arrangement,” he said. (The White House did not immediately respond to a request for comment.)

The night before the amendment, Harry Reid, Max Baucus and Chris Dodd engaged in the colloquy, promising that they would use the conference committee process to close the doughnut hole for prescription drugs through Medicare Part D completely, rather than the current 50% reduction that’s in the Senate bill. The AARP immediately lauded this promise in a glowing letter.

Thank you for your commitment—and that of Chairmen Baucus and Dodd—to closing the Medicare Part D coverage gap or “doughnut hole” by 2019 during the upcoming House-Senate conference committee on health reform legislation. We understand, given Senate constraints, that this action must wait until conference.

However, the pharmaceutical industry has no recollection of this deal, has not signed off on it, and would presumably fight it with the same vigor that they fought (and succeeded in fending off) the Dorgan amendment:

Ken Johnson, senior vice president for the Pharmaceutical Research and Manufacturers of America (PhRMA), said that if Congress or the White House wants to close the doughnut hole, they haven’t talked to him about it. He did, however, leave the door open for further negotiations.

“We have had absolutely no discussions with anyone in the Senate or the White House about how they plan to pay for closing the doughnut hole. It’s a laudable goal, but we are already committed to providing a huge amount of money to help seniors who hit the coverage gap, and no one has asked us to date to provide any additional funding,” he said in an e-mail to HuffPost.

So 31 Senators in the Democratic caucus traded away $106 billion dollars in savings for consumers – and $19 for the federal budget according to CBO – for an empty promise that hasn’t even been agreed to?

This is quite incredible. For the White House and the Senate leadership to keep touting the savings to consumers and the government in the health care bill, while rejecting an amendment which would also save consumers and the government, borders on the ridiculous. And they are justifying it by making a promise that has not been confirmed.

The doughnut hole should be closed, of course. But that’s not a good reason to stop a way to provide cheaper prescription drug prices for all Americans.

UPDATE: Just to give you a sense of the up-is-down logic on all this, here’s Harry Reid’s statement on the reimportation bill, from yesterday. It’s the worst kind of political optics to have all leading Democrats defending this nonsense:

“There was a time when this legislation was a critical step toward helping more Americans access affordable, safe prescription drugs.

“That time was when Republicans ran our government with the philosophy that even as more Americans lost their health care – even as fewer Americans could afford the skyrocketing cost of medicine – even as more seniors skipped and split the pills they need to stay healthy – Republicans said, Nothing to see here. They pretended everything was just fine the way it is.

“And against their strong opposition to doing anything – anything – to help the millions of Americans who had, and continue to have, no security or stability in their health care, we proposed legislation similar to the amendment before us, and I supported those efforts.

“But then a great thing happened last November. The American people demanded that their leaders take this country in a new and better direction, one that recognizes the real pain they feel and works to relieve it.

“That is why one of our first and most important priorities has been this comprehensive health care reform. And included among the timely and urgent improvements in our bill are changes that will make prescription drugs more affordable.

“In our upside-down health delivery system, those who are hit hardest with the most expensive prescription drugs, hospital stays and doctor visits are those whose lives most depend on it. They are those without any health insurance. That’s why our bill gets to the root of the problem by making sure the uninsured can afford and access good coverage.

“First, the health reform bill now on the floor will ensure nearly every American – including 31 million who today have nowhere to turn – will be able to afford quality health insurance. Among other things, that means they will pay less out of their own pockets for the prescriptions they need.

“Second, when we strengthen Medicare – as this bill does – we will close the coverage gap, known as the ‘doughnut hole,’ that today prevents so many seniors from affording their medications.

“Both of these existing improvements to our terribly broken health care system will make prescription drugs more affordable for millions of Americans who rely on them every day. And that will make the re-importation of drugs from other countries far less necessary.

“Because of this good bill, this amendment before us today is simply unnecessary. It is not the best way to ensure Americans can both get the prescription drugs they need, and get them at an affordable price. Our underlying bill, as it currently reads, is the best way.”