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. 
Albeit it would seem like Pharma's commitment of $80 billion in concessions over 10 years is still in place although increased taxes of $10 billion could raise this to a $90 billion commitment.

• Uninsured will be required to purchase insurance from health exchanges and employers with over 50 employees will need to offer insurance.  Subsidies for the uninsured to purchase healthcare seem to be slightly richer than the Senate plan.  This is good news for pharma as my calculations show a gain of almost $10 Billion for pharma if 70% of the uninsured who are American citizens are insured with decent pharmaceutical Rx coverage. 
• Taxes on pharma remain, as well as for device companies.  Taxes on pharma will increase by $10 billion over next ten years beyond those in the Senate plan.
• Medicaid rebates move from 15.3% to 23.1% and are recaptured from dual eligibles and Medicare Advantage Enrollees as in the Senate's plan
•  Donut hole closure by 2020 for Medicare starting with a $250 cash payment for beneficiaries reaching the Donut hole in 2010.   Suspect Pharma will be asked more than the 50% agreed to earlier.  Good news is long-term upside for induced demand after full removal of the Donut Hole after 2020.
• Free prevention and personalized care plan for Medicare Beneficiaries should up provide some addition pharma volume. 
• Streamlined Biosimilar FDA regulations for Biologics (likely what was in the House and Senate plans.  Exclusivity period unknown at this point.  Obama favored a shorter exclusivity than 12 years).
• PBMs and exchanges must report pharma discounts and rebates and use of generic drugs
• It would appear the bill seeks to end authorized generics

But don't get too excited... Comprehensive Healthcare Reform still remains a long shot especially the coverage of the uninsured as this certainly makes up the bulk of the reported $950 billion.