Following President Barak Obama’s address on healthcare reform to a joint session of Congress this week, the pharmaceutical and biotechnology industries reiterated their overall support for healthcare reform. Although not commenting in detail on specific measures offered by the President or Congressional proposals, the pharmaceutical and biotechnology industries will be important players in the upcoming weeks and months as the final proposals for healthcare reform materialize.
“Achieving bipartisan, comprehensive healthcare reform this year should be a national priority,” said Billy Tauzin, president and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), in a September 9, 2009 PhRMA release. “This is our once-in-a-lifetime opportunity to make a real difference. We will continue to be a constructive partner to help meet this goal.”
PhRMA also reaffirmed its policy commitment under which pharmaceutical companies will provide discounts for brand-name prescription drugs to address coverage gaps under Medicare, a commitment amounting to $80 billion over 10 years. Although not citing a specific dollar amount, a framework for healthcare reform proposed by the Senate Finance Committee and issued by its Chairman Max Baucus (D-MT) this week included measures to address the so-called “doughnut” hole in Medicare Part D coverage for prescription drugs. In the draft summary, pharmaceutical manufacturers would provide a 50% discount off the negotiated price for brand-name drugs covered on plan formularies when beneficiaries enter the coverage gap in Medicare, beginning in 2010. Beneficiaries would be eligible for the discounts provided they do not qualify for low-income subsidies, do not have employer-sponsored coverage, or do not pay higher Medicare premiums under Part B or Part D.
“We have not seen the actual legislative language, but the draft summary appears to include our pledge to provide $80 billion in healthcare savings over a 10-year period,” said PhRMA Vice-President Ken Johnson in a September 8, 2009 PhRMA statement. “That’s a huge commitment which will force our companies to make some very tough choices moving forward…But if healthcare reform is going to be successful, it will require a shared sacrifice, and we have stepped up to do our part.”
In a separate measure, the draft summary also contains a revenue provision under which pharmaceutical manufacturers will have to pay an annual fee of $2.3 billion beginning in 2010. The fee would be allocated and based on market share. PhRMA did not publicly comment on the measure, but in a conference call with the media on Wednesday September 9, the Biotechnology Industry Organization (BIO) indicated that it would be interested in limiting the definition of revenue to include revenues from commercial products and to exclude revenue from developmental sources such as milestone payments.
Following the President’s address, BIO reaffirmed its commitment to healthcare reform. “BIO shares President Obama’s goal of ensuring that all Americans have access to affordable, sustainable, high-quality healthcare,” said BIO President and CEO Jim Greenwood in a September 9, 2009 statement. “…Market-based reforms provide the best opportunity to achieve the goal of universal access while providing high-quality care and incentives for the discovery and development of innovative improvements throughout the healthcare delivery system.”
BIO also restated its interest to include biosimilar provisions in healthcare reform. In his statement, Greenwood pointed to biosimilar provisions in healthcare reform bills by the Senate Committee on Health, Education, Labor and Pensions and the House Energy and Commerce Committee. Biosimilar provisions were not specifically addressed in the recent draft summary issued by the Senate Finance Committee. “We urge the Congress to include this biosimilars language as they continue efforts to reform our nation’s healthcare system,” said Greenwood in the statement. “We look forward to continuing our participation in the process of healthcare reform with the goal of increasing and reducing costs while promoting the continued development of new therapies and cures.”
Healthcare reform is still very much a work in progress, and the specifics of any final measure are yet to be determined. But one thing is for sure. The upcoming fall legislative season will no doubt be eventful.