The industry's decision to agree to $80 billion in concessions to the White House was heavily criticised by House Republican Leader John Boehner.
Writing to his former colleague Billy Tauzin, who now heads the Pharmaceutical Research and Manufacturers of America (PHRMA), he called the deal a short-sighted bargain that leaves your own customers and employees behind.
Boehner added: "When a bully asks for your lunch money, you may have no choice but to fork it over. But cutting a deal with the bully is a different story, particularly if the 'deal' means helping him steal others' money as the price of protecting your own."
Obama has made it a priority to cut healthcare costs and see all Americans covered by medical insurance.
His administration sought a deal with the US industry association PHRMA, agreed last month, that will see an $80 billion cut in government spending on medicines, and this has been followed by a deal with three leading hospital groups. Overall, it is expected to save $155 billion in spending over 10 years, mainly by lowering charges for services to the poor and elderly.
But Boehner argues that reduced costs will threaten new research and leave customers with poorer quality services. He says pharma has chosen the deal at the expense of the American people in the hopes of favourable treatment and future profits.
He implored Tauzin, who previously served as a Republican congressman from Louisiana and chairman of the Energy and Commerce Committee, to abandon PHRMA's $150 million health care advertising campaign that supports the Obama administration.
As a further blow, he highlighted remarks from House Democratic leaders that they are not bound by the $80 billion deal between White House and PhRMA, and that they could push for further concessions.
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