Health Reform Challenges Biotech Industry - Pressures to reduce healthcare spending generates proposals to spur competition, cut costs. - BioPharm International

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Health Reform Challenges Biotech Industry
Pressures to reduce healthcare spending generates proposals to spur competition, cut costs.


BioPharm International
Volume 22, Issue 8

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Just as troubling may be the many provisions tucked into health reform legislation that could affect manufacturer operations, even without generating specific savings. The House bill, for example, includes "sunshine" provisions that require biopharmaceutical companies to disclose virtually all payments and gifts to physicians and healthcare providers; information that will be disclosed to the public. The industry has supported federal sunshine legislation, but in return wants national standards and common reporting requirements that preempt a growing number of state disclosure policies. Waxman opposes federal preemption and proposes to permit states to continue disclosure policies that exceed Congressional requirements.

In addition, there's drug reimporting. The Senate recently approved language in a budget bill that permits the purchase of lower-cost drugs from Canada through the Internet. While that may not fly, Senate leaders have promised to bring up a proposal from Sen. Byron Dorgan (D-ND) to allow the important of prescription drugs from Canada, Europe, and other developed countries. That was put on hold a few months ago by reluctance to including it in the tobacco reform legislation, but it remains on the table.

There's strong support for legislation to authorize comparative effectiveness research (CER) to improve medical treatment decisions, but just how payers and insurers will use the resulting information has been a hot-button issue on Capitol Hill. There has been a heated debate over the structure of a CER governing body and its authority, and also whether Congress should prohibit the use of CER reports in making coverage decisions. Democrats prefer to keep language on the use of CER fairly vague, while Republicans raise the specter of healthcare rationing and government interference without explicit restrictions on the use of CER data to determine treatment. The recent Institute of Medicine report on CER priorities includes several topics seeking to compare the effectiveness and costs of pharmaceuticals to other treatments, reinforcing those who consider cost-effectiveness a valid CER research subject.

Probably the most contentious health reform issue is whether to establish a government-sponsored public health plan to provide coverage for individuals without access to employer-based insurance. Insurers and employers insist that a public plan will end private insurance, while providers fear more extensive government price-setting. Pharmaceutical companies have become more alarmed about the public plan because of legislative language that authorizes government negotiation of drug prices for therapies covered by a government-sponsored plan.

Even without a public plan, Congress is likely to establish some kind of federal health board with the authority to make many of the difficult decisions on payments and benefits, including drug coverage and cost-effectiveness. Many of the details in reform legislation will be hammered out on Capitol Hill this fall by a committee formed to reconcile differences between House and Senate bills. There will be considerable horse-trading and maneuvering, with everyone keeping a sharp eye on costs and coverage.

Jill Wechsler is BioPharm International's Washington editor, Chevy Chase, MD, 301.656.4634,


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