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Health care industry

Pharmaceutical Industry Secures Major Wins in President's Health Care Law

Strategic Insights

— 1 min read

The U.S. drug industry has fended off significant restrictions in The President's health care law, securing major wins that will benefit its bottom line. The law's passage will bring an estimated 32 million uninsured Americans into health coverage, creating a surge of new business for the industry. Lobbyists successfully defeated proposals to allow importation of low-cost medicines, have Medicare negotiate drug prices, and require industry rebates for Medicare and Medicaid beneficiaries.

Key Takeaways:

  • The Pharmaceutical Research and Manufacturers of America (PhRMA) led a carefully planned and well-financed lobbying strategy to secure major wins for the industry.
  • The industry defeated proposals to allow importation of low-cost medicines and to have Medicare negotiate drug prices with companies.
  • Lobbyists also defeated efforts to require more industry rebates for the 9 million beneficiaries of both Medicare and Medicaid.
  • The industry won 12 years of protection for costly brand-name biotech drugs against cheaper generic competitors, a boon for products that comprise 15 percent of pharmaceutical sales.
  • Starting next year, the industry will have to provide 50 percent discounts to Medicare beneficiaries in the "doughnut hole" gap in pharmaceutical coverage.
  • The price cuts, combined with increasing federal subsidies, will encourage more elderly people to purchase more drugs.

Statistics:

  • The estimated 32 million uninsured Americans will gain health coverage under The President's health care law.
  • 9 million people are beneficiaries of both Medicare and Medicaid.
  • 15 percent of pharmaceutical sales come from costly brand-name biotech drugs.
  • $4.5 million: the earnings of former Louisiana Congressman Billy Tauzin in 2008, the most recent figure available.

Sources:

  • "Emerging Healthcare Solutions, Inc." (Pink Sheets: EHSI)
  • "The Pharmaceutical Research and Manufacturers of America"
  • Biotech Week editors and staff with other reports
  • "Copyright 2010, Biotech Week via NewsRx.com"

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