Americans move one step closer to healthcare for all
Posted on 22. Mar, 2010 by Handbaglady in News
The USA moved one step closer this week to healthcare for all, (despite no Republican support(!) with the approval of President Obama’s 10 year health reform bill. This is fantastic news for the estimated 32 million uninsured Americans and also for Obama himself but what does this mean for the pharmaceutical industry as a whole?
The Pharmaceutical Research and Manufacturers of America (PhRMA) welcomed the bill stating that although not perfect, it was a step closer to providing Americans with access to free, good quality healthcare coverage and services. This view was echoed by President Obama who stated: “This legislation will not fix everything that ails our healthcare system, but it moves us decisively in the right direction.”
Pharmaceutical companies will now pay more in fees than originally proposed; the planned annual levy of $2.3 billion has been replaced with yearly fees, which will rise gradually to $4.2 billion in 2018, after which they will decline to a regular annual total of $2.8 billion.
However to counter that, a number of industry-opposed initiatives were dropped from the final bill. These include a requirement for government / industry price negotiations for the Medicare prescription drug programme, allowing consumers to buy re-imported prescription drugs from overseas and also a ban on ‘pay for delay’ deals between brand-name and generic drug companies.
An additional advantage for the industry is that by 2020 the bill will close the ‘doughnut hole’ coverage gap. The doughnut hole gap is when the programme stops paying a beneficiary’s prescription drug costs after they reach $2,830 in any single year and then starts to pay again when the person’s own expenses exceed $4,550. Pharmaceutical companies contribution to this will be around $3 billion annually over nine years, but they will retain many customers who, having reached the doughnut hole in the past had switched to generic versions of their brand-name drugs, reduced their medications or simply stopped taking them altogether.
President Obama could now sign the bill into law as early as Tuesday 23 March.
The issue of US healthcare reform has always been a thorny one. It has been widely reported that President Obama has struggled to articulate his vision for healthcare reform so this latest victory has been widely praised and taken as positive proof that change can happen.
The New York Times reported today that: “On this one, he is the President he was supposed to be, the President of change you really can believe in. Barack Obama hasn’t always been better than the opposition. This time he is.”
Handbaglady
23. Mar, 2010
Interesting to see in today’s Financial Times (and all the other business papers) that pharma shares rose considerably (e.g. 71/2p to GSK’s) after months of uncertainty following the success of yesterday’s Bill.
neilcrump
23. Mar, 2010
You can also get a T-shirt to celebrate: http://www.cafepress.com/ilovemytshirts/7102701