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,
as marketing and sales, R&D and administration costs wouldn't have changed and costs of goods for many products are quite small. Further, pharma companies with an unusually high percentage of their portfolio geared to younger patients (the uninsured are largely made up of those under 50 years old) would have seen a much greater jump in their top and bottom lines than the industry average.

So here's I arrived at the almost $9 billion annual figure...

Sources and notes accompany the estimate above are shown below.