US Pharma does not expect industry increase with health care reform

A recent Reuters article reported that the USA's pharmaceutical research and biotechnology companies do not expect an industry increase as a result of broader insurance coverage proposed in health care reform. Manufacturers have pledged to contribute $80 billion over a decade to help pay for an expansion of health insurance, an agreement reflected in legislation pending in the Senate, the article noted.

Commenting on this, David Brennan, chief executive of Anglo-Swedish drug major AstraZeneca and current chair of the Pharmaceutical Research and Manufacturers of America (PhRMA, said:.'While 39 million additional Americans may begin receiving health care insurance coverage under the proposed legislation, the industry's gain would 'depend primarily on the access' extended to the new enrolees.'

"If it's private sector coverage in the existing programs where we compete, then we'll have an opportunity," he said. Mr Brennan also stated that generic drugs make up about 70% of prescriptions, and "we compete in a much smaller segment of the market than we did before."

Higher rebates paid to the government, discounts on some drugs offered under Medicare and other parts of the $80-billion pledge will "happen relatively quickly," while "it's going to take a couple years for a system to form that gets new people" covered with insurance, Mr Brennan added.

The overall impact on the industry will depend on final details, but so far "there is not an obvious upside" that makes up for those cuts, Mr Brennan separately told the recent Reuters Health Summit in New York.