Industry reaction to federal healthcare reform is mixed

Pharmaceutical CommercePharmaceutical Commerce - March 2010

With the passage, in the House on March 20, of HR 3590, officially “The Patient Protection and Affordable Care Act of 2009” (already being tagged as “PPACA”), much of the regulatory action of healthcare reform will move to the Dept. of Health and Human Services, and CMS, FDA and the Centers for Disease Control specifically. There will continue to be rear-guard actions by the Senate, and several states, to block some of its provisions, but the Washington consensus seems to be that the battle is over.

Organizations involved in pharmaceutical development and distribution have a mixed bag of pluses and minuses to consider. The major thrust of the law has been health insurance policy and not pharmaceuticals—undoubtedly a result of the decision, early on, of PhRMA to be supportive of the reform bill as long as drug importation was off the table. “Today’s important and historic vote in the House will help to expand health care coverage and services to tens of millions of Americans who are uninsured and often forced to forego needed medical treatments,” reads the PhRMA statement.

Biopharma companies providing products to Medicare Part D patients will forgo an estimated $85 billion in revenue over the next 10 years as part of a way to eliminate the “doughnut hole” in coverage, and increased rebates to states and the federal government for Medicaid patients. Branded pharma manufacturers will also get hit with a $2.5-billion tax on sales to federal agencies purchasing drugs (Sec. 9008).

“The bill includes a historic provision which creates a pathway to enable [FDA] to approve biosimilars,” said Jim Greenwood, executive director of BIO, who also called The Therapeutic Discovery Project Tax Credit a “ critical provision that will provide some financial relief to research-intensive, small biotechnology companies that continue to suffer from tight credit markets.”

The Generic Pharmaceutical Assn (GPhA), however, was disappointed in the 12-year term allowed for biosimilars, although GPhA president Kathleen Jaeger notes that “the good news is that more Americans will have healthcare coverage and more seniors will have access to generic medicines.”

The National Assn. of Chain Drug Stores (NACDS) likes the expansion of medication therapy management (MTM) programs, saying that it fits with its vision “that pharmacy will own the issue of medication adherence,” and the revision to pharmacy reimbursement revolving around calculations based on average manufacturers price.

HDMA, which was also against drug importation (which fell out of the legislation late last year), offered a less-than rousing endorsement of the legislation, with HDMA president John Gray saying that it was glad that key issues “were debated.”

It’s worth noting, too, that the key concepts of the Physician Sunshine Act, introduced in Congress last year, were incorporated (Sec. 6002): beginning in 2013, any payment made to a physician by a manufacturer will be publicly reported; penalties for noncompliance start at $1,000 per non-reported incident. The Pharmaceutical Marketing Research Group noted that these provisions do not include fees paid to participate in market research. A similar reporting requirement will go into effect in 2012 regarding drug samples (Sec. 6004).

Finally, comparative effectiveness research, one of the elements chewed up during last summer’s debates, lives on in the form of a new Patient-Centered Outcomes Research Institute (Sec. 6301), to be formed as a nonprofit corporation, while the Federal Coordinating Council for Comparative Effectiveness Research (which was legislated only a year ago) ceases to exist.

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