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New healthcare proposals re-open talk of drug importation
It remains to be seen how much of an election issue healthcare will be over the course of this year; the Republican Congress’ never-ending attempt to repeal Obamacare (specifically, the individual mandate for healthcare insurance) hasn’t been a top-of-mind issue when immigration, anti-terrorism and women’s health issues seem to dominate the conversation, especially among Republican candidates. Nevertheless, the Trump campaign, fresh off its electrifying wins during Super Tuesday, has issued a bullet-point list of reforms, starting with—no surprise—a repeal of Obamacare.
For the US pharma industry, however, there is cause for concern. The just-released list includes this:
Remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products. Congress will need the courage to step away from the special interests and do what is right for America. Though the pharmaceutical industry is in the private sector, drug companies provide a public service. Allowing consumers access to imported, safe and dependable drugs from overseas will bring more options to consumers.
It’s widely recognized that the unlimited prices that can be charged in the US for new drugs are, in effect, the US’ way of funding new drug development for the world; and that pricing (at least for branded drugs) is generally lower outside the US. The pharma industry has steadfastly maintained that these revenues support the continued research into new cures; reduce the revenue, and you reduce the pace of drug development.
Forestalling drug importation was one of the key concessions the Obama administration made back in 2010 when the Affordable Care Act was passed; and while that was clearly of benefit to the industry, it’s almost never mentioned that the industry made its own concession to rebate revenues that would, in effect, pay for a 50% reduction in the “doughnut hole” portion of Medicare Part D, which was valued at $32 billion over 10 years at that time. (The now much-reduced doughnut hole compelled seniors to pay all of their drug costs between an upper and lower threshold.)
Hillary Clinton, the leading Democratic candidate, is also on record with reforms of drug-pricing policy, including proposals to allow importation and to cap, in some fashion, the revenue derived from higher-priced drugs. Thus, the pharma industry faces both leading candidates, at this time in the election cycle, who seek to corral pharma industry revenues and profits.