The In Vivo blog makes a good case that the PhRMA approach has been working. But here's the problem ...
The In Vivo observers state:
"The full negative impact on the industry including cost reductions in the private market is estimated at $70 billion over ten years. Compare that to $117 billion that the health insurers are being asked to give up from reductions to Medicare Advantage payment rates and you can see why the health insurers are crying "foul" and complaining that the pain of health reform is falling disproportionately on them."
SInce brand Rx is only 7-9 percent of total health care spending does it make sense for drug spending -- which will come in the form of formulary driven rebates that ultimately hurt the mentally il and seniors the most -- to shoulder such a big chunk.
And that's just the start...
"The fact that cuts to pharma revenues are within the tolerable range combines with the industry's position against smoking to create a good climate for working with the White House, HHS and Congress on two key industry objectives: (1) a well-crafted follow-on biologics bill and (2) control over patient co-pay levels for drugs and biologics."
CBO estimates $70 billion over ten years for FOBs. A lot of the "savings" are expected to come from restricting access to drugs based on comparative effectiveness reviews. Tack on another $100 billion. That doesn't include 15 percent mandatory rebates some in Congress want to stick to drug companies for the privilege of participating in Part D. CBO estimates another $100 billion out of that. Let's round off to $400 billion over ten years or about 25 percent of total revenues for that time period. Add to that the drop off in sales due to patent losses.... As the WSJ health blog noted a while back.... "Generic competition is expected to wipe $67 billion from top companies' annual U.S. sales between 2007 and 2012 as more than three dozen drugs lose patent protection. That is roughly half of the companies' combined 2007 U.S. sales." There will be some offsets thanks to new products but with government policies slashing revenues with rebates, formularies, etc. the combined effect of all these proposals and the generic shift will be huge.
So, is PhRMA just preserving an eroding status quo in order to innovate another day or are buying into policies that will make innovation more difficult given their cumulative impact on the bottom line? It remains to be seen.
Read Article
One thing is certain, I think the In Vivo folks are -- like many so-called "stakeholders" -- confusing having a seat at the table with what is really best for the industry and the public. Especially now when the requirement for keeping that seat is suggesting that even legitimate questions about the direction of health policy are "land mines" that could block the way of the Obama heatlh care express.
Read the In Vivo Blog Here
The In Vivo observers state:
"The full negative impact on the industry including cost reductions in the private market is estimated at $70 billion over ten years. Compare that to $117 billion that the health insurers are being asked to give up from reductions to Medicare Advantage payment rates and you can see why the health insurers are crying "foul" and complaining that the pain of health reform is falling disproportionately on them."
SInce brand Rx is only 7-9 percent of total health care spending does it make sense for drug spending -- which will come in the form of formulary driven rebates that ultimately hurt the mentally il and seniors the most -- to shoulder such a big chunk.
And that's just the start...
"The fact that cuts to pharma revenues are within the tolerable range combines with the industry's position against smoking to create a good climate for working with the White House, HHS and Congress on two key industry objectives: (1) a well-crafted follow-on biologics bill and (2) control over patient co-pay levels for drugs and biologics."
CBO estimates $70 billion over ten years for FOBs. A lot of the "savings" are expected to come from restricting access to drugs based on comparative effectiveness reviews. Tack on another $100 billion. That doesn't include 15 percent mandatory rebates some in Congress want to stick to drug companies for the privilege of participating in Part D. CBO estimates another $100 billion out of that. Let's round off to $400 billion over ten years or about 25 percent of total revenues for that time period. Add to that the drop off in sales due to patent losses.... As the WSJ health blog noted a while back.... "Generic competition is expected to wipe $67 billion from top companies' annual U.S. sales between 2007 and 2012 as more than three dozen drugs lose patent protection. That is roughly half of the companies' combined 2007 U.S. sales." There will be some offsets thanks to new products but with government policies slashing revenues with rebates, formularies, etc. the combined effect of all these proposals and the generic shift will be huge.
So, is PhRMA just preserving an eroding status quo in order to innovate another day or are buying into policies that will make innovation more difficult given their cumulative impact on the bottom line? It remains to be seen.
Read Article
One thing is certain, I think the In Vivo folks are -- like many so-called "stakeholders" -- confusing having a seat at the table with what is really best for the industry and the public. Especially now when the requirement for keeping that seat is suggesting that even legitimate questions about the direction of health policy are "land mines" that could block the way of the Obama heatlh care express.
Read the In Vivo Blog Here
