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Mar 9, 2010

Why Healthcare Reform is So Difficult

  • There is a simple reason why healthcare reform is so hard to do-there has to be winners and losers. We have had many months of discussion on how to pay for healthcare reform such as cuts in Medicare, price concessions from Big Pharma, more insurance competition across state lines, tax on “cadillac” insurance plans etc etc. And despite a “done deal” on how to legislate “biogenerics” we have a recent push by Waxman and now the Op-Ed below in the New York Times from March 8 targeting biologic drugs for “an easy way to save money” by allowing only five years of protection from generics. The biotechnology industry thought that this storm has passed but the effort by Congress to find money keeps it in play. The pros and cons of biogenerics have been presented ad nauseum but the issue with biogenerics is jobs and new product growth for a very successful industry.

    Will Congress cut protection for biologic drugs to five years with the risk of stifling R&D innovation?

    Op-Ed Contributors – Why We Need Generic Copies of Biologic Drugs – NYTimes.com

    Raygent » Waxman Power Play to squeeze Biotech for “biogenerics".

    At the recent JPMorgan Conference in January there was in-depth discussion of the effect of healthcare reform on the industry and one surprising consensus was that with 30 Million more people insured most participants would benefit. For example labs, acute care hospitals and drug companies would be winners because of more customers. Commercial PBM’s would also benefit while agents selling health insurance would be losers because of health exchanges and insurance oversight by government. Impact on physicians would be mixed depending on the specialty and new reimbursement rates; radiologists might lose while primary care would gain.

    So we cannot have healthcare reform without somebody losing. The phalanx of lobbyists march on Washington with big budgets and selective politicians defend their “pet” industry as Congress approaches the final vote.
    The truth is that although reform of some kind is urgently needed nobody wants to pay and the Republicans have the easy argument to trash reform or move in tiny steps because they will say unless money is found taxes will go up.


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