Generic drugmakers are predicted to be one of the big winners following US President Barack Obama’s return to the White House.
The Republicans, who have retained control of the House of Representatives, are likely to press for some changes to Pres Obama’s health reform legislation – the Affordable Care Act of 2010 (ACA) – during the negotiations on the budget deficit which are due to begin between Congress and the White House this month.
But there seems to be nothing now that will stop one of the key pillars of the ACA – the extension of health coverage to more than 30 million currently uninsured people which will start to roll out on from January 2014.
Currently, nearly 50 million people, or around 16.3% of the US population, have no health insurance. Under the Obama reforms, this number will start to decline from 2014, falling to around 27 million by 2022, by which date more than 250 million will have health coverage.
Over this time, the number of people who can afford prescription drugs – and who will need more of them as they age – is set to increase massively, and this could more than offset the branded prescription drug industry’s pledge to provide, over 10 years, $80 billion-worth of fees and discounts under the Medicare prescription drug programme, known as Part D, as part of its support for the ACA.
In return, the industry won assurances from the administration that it would not progress proposals to allow the government to use its purchasing power to negotiate prices for drugs supplied through Medicare, or permit the re-importation of US Food and Drug Administration (FDA)-approved medications back into the country from nations such as Canada and the UK, where prices are much lower.
But with an annual bill of around $2.8 trillion, the US spends far more on healthcare than many other industrialised nations, and this is due to higher prices, not better quality, according to a recent study from US policy foundation the Commonwealth Fund.
For example, it found that US prices for the 30 most commonly-used branded prescription drugs are more than double those paid in Australia, France, the Netherlands, New Zealand and the UK, and a third higher than in Canada and Germany.
In contrast, prices of generic drugs are lower in the US than in 12 other industrialised nations, and while they accounted for nearly 80% of US prescriptions written last year, they represented just 27% of the nation’s total drug spend.
So, with the Medicare and Medicaid health programmes now accounting for 25% of the federal budget, ways to reduce the nation’s drugs bill are certain to return to the table as discussions on the deficit get underway, and health insurers are expected to push for even greater use of generics to help keep premiums under control.
Commenting on the election result, America’s Health Insurance Plans’ (AHIP) chief executive Karen Ignagni urged the nation to address “the soaring cost of medical care than is driving up the cost of coverage, taking up a greater share of federal and state budgets, and threatening the long-term solvency of our nation’s public safety net programmes.”
Meantime, data released by the Federal Election Commission and reported by the Center for Responsive Politics showed that, at October 25, $1.7 million worth of political donations from pharmaceutical industry political action committees (PAC) and individuals this year had been made to Pres Obama, accounting for 48% of the total, while $1.4 million, or 42%, had been donated to Republican candidate Mitt Romney.
At an estimated cost of around $6 billion, the 2012 election has been by far the most expensive in US history, the Center adds.
