Friday, February 26, 2010

In the Wake of the Healthcare Summit

Yesterday's Healthcare Summit held few surprises.  As widely speculated, the 7 and 1/2 hour session largely turned into a Capital Hill version of a TV reality show.  Obama opened laying out an agenda to consider the various objectives of Healthcare Reform.  Alexander for the GOP followed forcefully urging the Democrats to scrap their plans and start anew citing backing of the American people.  He further requested that the Democrats pledge not to take the bills through Congress utilizing the reconciliation process and warned them of the consequences of it.

The opening comments set the stage for the remainder of the meeting.  Sure there were some agreement on various objectives but not on form and substance of how to make it happen.  For example, all agreed that Americans should not be denied coverage due to pre-existing conditions.  The GOP  agreed that some regulation on the insurance industry would make sense.  Coburn (R) put forth an idea to send investigators as fake patients into MDs offices in an attempt to root out Medicare fraud and abuse.  Both sides agreed that this was a good idea.  But that was as far as agreement really got. Agreement on some objectives and some minor points.

Huge positional gaps exist over coverage of the uninsured. Dems want to spend up to 3/4 of a trillion dollars over next 10 years to cover 30 million. The GOP covers about 3 million (Boehner bill as reviewed by the CBO).  In terms of approach, Dems want exchanges, many Repub proposals want to open up state regulations so that insurance companies can more easily enter other state markets (easier said than done due to large market entry barriers).  Some Repub proposals do include exchanges.  Republicans tend not to favor pay or play schemes nor do they want government mandated benefit packages. Repubs also favor establishing high risk pools.  There was also a big discussion on budget impact of the plan.  Dems say it will reduce the budget (due to increased taxes and large cuts in the Medicare Advantage programs).  Repubs point to the huge cost of the current Dem proposals.  Nothing new here.  This posturing has been ongoing ever since the COB released the financials around the House and Senate bills.

An interesting area for the Pharma industry was the filling of the Donut Hole.  Dems want it filled.  The GOP appeared to come out against it due to the additional costs of the benefit.

What happens next?  It will depend on the polls.  The spin machines are already churning with soundbites filling big media channels.  If we see a favorable tick toward approval of comprehensive healthcare reform, the Democrats will be emboldened and pursue reconciliation.  Obama did not mention the R word (reconciliation), but it was pretty clear that he implied that it was an option for the Democrats and hence a threat. Don't be surprised if Obama takes a couple of minor republican ideas and amend his proposal with them for window dressing.  

If public opinion does not tick upward toward the Dems, we still will see movement forward but perhaps less aggressive as the Democrats have little political capital left to lose and can roll the dice hoping that they can spin whatever gets passed as good for the voting public.

Monday, February 22, 2010

Obama's Plan Good News for Pharma

My first take on what's in Obama's plan for Pharma...Looks a lot like merged House and Senate Plans more toward the Senate plan.  Good news for Pharma in the short-run as it appears that a significant number of the uninsured would be covered and in the long-term the Medicare Donut Hole would be closed. 

Thursday, February 11, 2010

Healthcare Reform Already Underway

With our politicians stilling sorting through the aftermath of the Massachusetts stunner, I thought I would comment on Healthcare Reform recently enacted and it's impact on pharma and the LifeSciences Industries in general.  Part I, here, will cover what's in some major legislation and Part II, later, will cover the implications for Pharma and the LifeSciences Industry.

Let's start with the American Recovery and Reinvestment Act of 2009

Tuesday, February 9, 2010

Biosimilars - Part IV - Key Success Factors

This is the last installment of the Biosimilar series.  In Part I, I covered aspects of healthcare reform legislation geared to define and streamline the FDA regulatory approval pathway of Biosimilars.  In Part II, I reviewed the presence of high entry barriers to the emerging Biosimilar market, and in Part III, I discussed the potential size and dynamics of the developing Biosimilar Markets.  Here, in Part IV, I'll list five key success factors for participant success in the emerging marketplace.  So here's my list...
  1. Strong Marketing Acumen - Picking the right product opportunities

Friday, February 5, 2010

The Uninsured and Pharma Industry Revenue

The press is finally picking up on why the Massachusetts Brown victory is not a victory for pharma (I blogged here about it in January) at least in the near-term.  The industry will most likely lose the "insurance effect" of the uninsured gaining insurance while still seeing the downsides of the legislation including the commitment to help close the Donut Hole over the next 10 years. Here are the details of my own estimate of what the industry stands to lose, or fails to gain without extension of insurance to the uninsured.

Indeed it's about a $9 billion annual loss to the industry's top line or 3% of the total market sales.  Of course at the bottom line this would have had much more substantial impact, as high as a 10% lift,

Thursday, February 4, 2010

Biosimilars - Part III - The Market

With news of Teva's accepted FDA submission for Neutroval, a biosimilar to Amgen's Neupogen, it's high time to dust off the key board and write Part III Biosimilars - The Market.   Part I of my Biosimilar Series covered pending Healthcare Reform legislation to streamline biosimilar approval.  Part II - Biosimilars, High Entry Barriers, discussed the presence of very substantial entry barriers to the registration, manufacturing and marketing of biosimilars. Part III Biosimilars - The Market... will discuss the likely size of the market and the facets of competition which will likely develop.

Data suggests that top selling Biotech drugs will