Pharma Deal With White House on Course to Net Industry Billions

[kpete]

Source: Huffington Post


The deal struck between the pharmaceutical lobby, the White House and Senate Democrats has drastically improved Big Pharma's expected profits, a private industry report finds.

IMS Health, a company that supplies the pharmaceutical companies with sales data, predicts that new health reform legislation -- combined with a projected upswing in the economy -- will result in a net gain of more than $137 billion in total market sales over the next four years. The new assessment was contained in document obtained by the Huffington Post.

Back in March, that same firm projected a compound annual growth rate of -0.1 percent in the period of 2008 through 2013. In October, with the general outlines of health care reform clearly in place, it revised that number to a positive 3.5 percent for over the same period.

What happened in those seven months? The economy started looking up, for one, as did the overall prospects of health care reform. But the industry also won a major lobbying victory.

Read more: http://www.huffingtonpost.com/2009/11/11/pharma-deal-with-white-ho_n_353499.html

[sharp_stick]

1. Seems like common sense to me

If the country can get an extra 30 million people covered with healthcare and prescription plans the pharmaceutical industry stands to do pretty well. Add in an improving economy and it's looking even better for the industry.

[ipaint]

2. The mandate was always about a windfall for the industry.

All the benefits of a mandate with none of the price controls a government run universal ins. program with a mandate would enforce on them.

Have one's cake and eat it too. Wall street must be extremely pleased.

[John Q. Citizen]

3. Exacly. And as the costs go up, less people will be able to afford health care and we will be right

back where we are now.

Pharma will be ahead though.

[ipaint]

9. Except now we have an industry totally dependant on taxpayer cash flow to survive,

wall street addicted to the same flow of cash, the economy balanced on both their backs and americans yoked to the mandate at the bottom with the threat of NO healthcare should the whole scam collapse as a result of proposed future "incremental improvements".

Try reforming that and avoiding massive loss of life.

[sandnsea]

4. More people get health care coverage

More people can get the medication they need.

I can't figure out who people expect to provide this medication.

[Jackpine Radical]

5. It's all about prices.

Americans pay far more than anyone else in the world for pharmaceuticals, and the legislation would protect the current pricing structure, continuing to forbid the government to engage in bargaining to bring down the prices. Why do Americans buy drugs in Canada? Why does the rest of the world pay so much less for their medicines than we do?

[sandnsea]

7. The bill requires Medicare drug price negotiation

The public option will use drug price negotiation. The private plans, set up in the exchange, will still be managed by insurance companies. I have no idea how individual insurance companies set their drug prices, I imagine they negotiate.

Yes, the rest of the world has drug prices set by legislature. Shall we set the price of MRI and PEET machines and surgical equipment and vital statistic machines and every other medical product? What kind of bureaucracy will be required to do that?

[Jackpine Radical]

8. Here's what I'm talking about (from the HuffPo link):

the Obama administration agreed to oppose congressional efforts to use government leverage to bargain for lower drug prices. The White House also agreed not to shift some drugs from Medicare Part B to Medicare Part D, which would have cost the industry billions in reduced reimbursements.

[sandnsea]

10. I'll repeat. Medicare will be required to negotiate drug prices

That's in the House bill. Yes, there is the problem of the biometric drugs. It's not a perfect bill. But the distortions are just beyond the pale. There isn't any possible way you can bring 45 million people into an industry as new consumers and not expect that industry to make money.

And there's no way for an industry that accounts for 15% of our economy to not discuss changes to that industry with the government.

[leftstreet]

20. Oh. So they've opened up Medicare For All? Guess I missed that n/t

[Matt Shapiro]

22. Medicare negotiating drug prices???

It is my understanding that the bill continues the current PROHIBITION against Medicare negotiating drug prices. If you have a specific reference, I'd love to see it.

[saracat]

24. Funny. No one EVER uses the phrase "its not a perfect bill" to Big Pharma.

It is only those of us who will foot the bill who have to compromise

[excess_3]

12. c'mon, do you really believe that?

if non-US generics were allowed
in this country,

non-patented drugs would cost nothing

[sandnsea]

13. Generics cost $10 for 3 months

:shrug:

I mean good lord. How cheap do you want them to be? And where do you think they come from??

The negotiations are about patented drugs and progress has been made, more than I ever thought we'd get. Funny how nobody is cheering about the Medicare drug negotiations when that's one of the things people have been screaming loudest about for years. Nope, can't be happy about anything. Just sidestep the good news and find something else to bitch about. It's sick.

[saracat]

25. SOME generics cost that. I have a generic that costs $65 a month.

While it is true many are cheap with health insurance, not all are that cheap.

[SOS]

14. We should set the price of an MRI.

Let's learn from Japan.
In Japan, the government provides the MRI machine to the hospital or clinic.
The prices of these machines have come down dramatically over the years.

The government then sets the price of an MRI at $98.

In the US MRI's are around $2,000.
We could save $40 billion a year, simply by nationalizing this one test.

[sandnsea]

17. The public option will negotiate those prices

But that wasn't my question.

My question was should we create a bureaucracy to legislate the cost of medical equipment, diagnostic equipment, right down to thermometers?

[CanSocDem]

21. Yes.

That 'bureaucracy' will make all that equipment safe, reliable and available to everyone. Something it isn't, currently.

.

[ncliberal]

18. My last MRI was much higher than $2000.

The total cost for the MRI and radiologist was around $6000 4 years ago and that was at a neurology clinic at UNC. The cost is the reason my last MRI was 4 years ago and I have not had one since despite the fact that I have MS and am supposed to get them more often.

I am in my 30s, have MS and Fibromyalgia and no insurance. Needless to say, the health care issue is extremely important to me and very few politicians will be getting my vote in the future after this whole debacle.

[truedelphi]

23. A video posted here several weeks ago

had a speaker saying that our drug prices are hiked up 2,000 to 8,200 percent.

SO if they manufacture the pills you need, say 1,000 for four cents and charge you $ 182.00 to receive a mere one dozen, WHY!?!

In large part it is because the Lobbysists own the congress and the guy at 1600 pennsylvannia. And they only need us voters every few years.

[fascisthunter]

6. yes, let's reward bad behavior with our money

because we know full well, how much the insurance industry deserves it. Disgusting...

[Red1]

11. Really No Secret

Health care reform? Gettin it done? No problem...what you do;
-bring in all the ceos of all the pharmy corps
-all nongenerics are price reduced by 85%

Um, of course prior to all that, you tell the ceos
-any excuses like operating costs, loss of incentive, lose people
--officals are taken an hung up along pennyslvania avenune.

[lonestarnot]

15. What a deal egh...

[ProSense]

16. Not only is this no secret, this seems like spin to cast reform as a win for industry

"Branded drug price increases are expected to continue," the firm concluded, before citing the specific reforms of the PhRMA deal.

America's Affordable Health Choices Act of 2009 (HR 3200) has proposed several changes to the Medicare Part D program that would impact federal spending. Firstly, it would create a new rebate program that would require manufacturers of brand-name drugs to pay the federal government a rebate equaling 15% of the average manufacturer price. The finer details of the rebate will be determined as the reform legislation develops. Secondly, it would phase out the doughnut hole by simultaneously extending the benefits initial coverage limit and lowering the catastrophe threshold at specified rates leading to removal of the doughnut hole by 2022. Thirdly, as the doughnut hole is being phased out drug makers would be required to provide beneficiaries who are not eligible for the low-income subsidiary programme with a 50% discount on their spending in the doughnut hole for covered branded drugs. This initiative could create new business for pharmaceutical companies and also give seniors a price break, but only if they were paying full price on the brand product in the first instance. For pharmaceutical companies the agreement will lead to a loss if the senior was paying full price, but a win if the senior was not buying brand products at all. By making branded drugs in the doughnut hole more affordable patients may be able to afford to continue with treatment.

As explained by The New Republic's Jonathan Cohn (who got the IMS document first):

Health reform, as currently envisioned, wouldn't merely bring coverage to the uninsured. It would also fill in the "donut hole" in Medicare Part D--the gap in coverage that leaves beneficiaries with serious health problems paying for hundred if not thousands of dollars in out-of-pocket prescription costs.

In addition, because it will take several years to close the donut hole, reform relies on voluntary discounts from the pharmaceutical industry to make drugs more affordable in the intervening years. But those discounts would apply only to name-brand drugs, not generics.

Put it all together, and you have more demand for name-brand drugs.

The structure of health care reform, as IMS goes on to note, will have benefits for the federal government, which could save an estimated $30 billion from 2010 through 2019. Patients, meanwhile, would be paying higher premiums -- roughly five percent more by 2011 -- in return for what the report calls greater "protection against incurring higher drug costs." The real beneficiaries of reform, however, would evidently be the pharmaceutical industry.

IMS's conclusions are one of the clearest affirmations yet of various media reports that PhRMA is coming out of its negotiations with the White House and the Senate as a big winner -- though, as Cohn notes, the numbers IMS uses are simply projections and they may not necessarily bear out.

link

(emphasis added)

Closing the donut hole is huge. Add to that the savings the the federal government would realize. Bottom line is that they seem to be spinnng the fact that more people will be in the system as a negative.

[Orwellian_Ghost]

19. Business as usual

K&R