Next, thoughts turn to Conference in January where the details of the final healthcare reform legislation will be ironed out for a vote by both the House and the Senate prior to sending the legislation to President Obama's pen for inking. History should be made by February.
The House, still irked by the deal Reid apparently cut with Pharma, will likely seek further concessions from the industry.
Waxman has already stuck a provision to extract more from Pharma's pilling machines by allowing states to negotiate directly with Pharma on behalf of very low income seniors. Now toss in the fact that the Senate's version of the legislation only closes the Donut Hole by $500. However, Reid has pledged full Donut Hole closure so you have a deal in the making. Close the Donut Hole but include more price concessions by Pharma (prior blog on this topic here ). Also on the table is how fast the Donut Hole will be closed. The House version has it closed 2019. Will conference negotiations speed up the closure of the Donut Hole or slow it down? My guess is the legislation signed by Obama will reflect the House Donut Hole closure time line but perhaps incorporate the previously reported 75% discount in the hole rumored earlier in December.
Watch carefully for what Conference does with new Medicare Beneficiary care requirements associated with wellness, treatment plan requirements and most importantly medication management services. I blogged on the Senate's inclusion of these in the final 358 pages of changes to the original Senate draft here. These requirements could very well represent a nice revenue upside for Pharma in terms of incremental Rxs driven by increased diagnosis rates of various chronic disease states and most importantly help chip away at poor medication compliance, an issue that costs the industry 30% of it's revenue each year.
Lastly, I have my eye upon employer mandates and personal penalties for the uninsured. Final details here could influence the percentage of the uninsured who sign up for insurance and therefore the magnitude of the insurance affect opportunity for Pharma. Massachusetts, which put in place a play or pay approach 3 or so years ago has about a 70% rate of insuring the previously uninsured.
Other "hits" to the Pharma industry seem pretty well intact in both the House and Senate legislation such as the Medicare Advantage and dual eligible claw backs on rebates.
Once again Happy New Year to all and check back often for, news, new takes and detailed analysis of Healthcare Reform's impact on the Pharma Industry.
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