Wednesday, January 13, 2010

CMS Analsyis of Senate Legislation

On January 8th, Richard Foster, the Chief CMS actuary, released CMS' assessment of the savings and costs of the marked up Senate legislation.  It's interesting to see CMS's perspective on how the legislation will impact programs of concern to them.

Here's what's of direct interest to Pharma in terms of the 10 year impact from 2010 to 2019
  •  Medicare Pharmaceutical MFG drug discount program - +$1.9 billion.  This Costs Medicare Part D more due to the insurance effect.  Pharma of course will be subsidizing beneficiary out of pockets to the tune of 50% or more costing Pharma up to $45 billion in lost revenue (my most recent estimates).
  • Biosimilar Biologics provides savings (reduced revenue to Pharma and Bio) to Medicare and Medicaid of -$5.6 billion
  • Medicaid Rebates - Increase in Standard Rebate Level for Brands -$8.7 billion and generics -$0.66 billion
  • Medicaid Rebates - Extension of Rx Drug Discounts to enrollees of Medicaid Managed Care -$8.54 billion
  • Medicaid Rebates - Revision of drug formulation rebates -$3.05 billion

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