PharmExec Blog

Obama Reveals Healthcare Reform Plan

Barack Obama delivers a speech at the Universi...
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The health reform proposal unveiled by the White House on Feb. 22, 2010 retains a number of provisions that directly affect drug coverage and industry revenues. The plan highlights that it will close the Medicare drug benefit “doughnut hole” by 2020 to make drugs more affordable to the elderly. Seniors will get some relief this year through a $250 rebate, and coinsurance will phase down over the next decade.

Because broader insurance coverage and gap closure will expand drug sales and industry revenue, the Obama plan also increases a proposed “assessment” on pharma from $23 billion in the Senate bill to $33 billion, starting in 2011 to avoid tax problems. Medical device makers also would have to pay $20 billion in fees over 10 years, starting in 2013.

Similar to previously approved Senate and House bills, the plan retains a boost in Medicaid drug rebates from 15 to 23 percent and authorizes discounts on drugs sold to community hospitals. Drug companies would have to fully disclose financial arrangements with doctors, and pharmacy benefit managers would report rebates and discounts on drugs, along with success in boosting generic drug use.

The proposal also seeks to curb “pay-for-delay” deals between brand and generic drug manufacturers; stipulates that effectiveness research would not influence coverage decisions; and supports establishing a pathway for follow-on biologics.

For these and most of the provisions in the White House announcement, there are few specifics or proposals for implementation.

Many key provisions in enacted Democratic legislation are featured in the plan: an insurance exchange to provide coverage options to the uninsured; tax credits to help individuals and small business pay premiums; curbs on insurance industry discriminatory practices; aid to state Medicaid programs; an individual coverage mandate (with low penalties); and cuts in rates for Medicare Advantage plans.

Most notable politically, there’s no govern-run coverage option. And the plan significantly scales back a proposed tax on high-cost “Cadillac” health plans, making up the lost revenue with a tax hike on high-income individuals. Most notable politically, there’s no govern-run coverage option.

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  1. Howard
    Posted February 25, 2010 at 7:27 am | Permalink

    The plan Obama released was so vague in details that the CBO couldn’t even score it. If the writer thinks that there is no “gov’t run option” in the detailed plan she is crazy. Both the Senate and House bills have varying levels of Gov’t interference. They are paths to single payer once “reforms” are “needed” in the years following passage. I also don’t understand what :cuts in rates for Medicare Advantage plans” means. I think what you mean is “cuts in services” or an “increase in rates”. How about providing links to the “bill” that you site?


  2. Jack
    Posted February 25, 2010 at 9:21 am | Permalink

    Like Obama’s proposal this report is vague. I am going to side with Howard but where I see a problem is that by closing the “doughnut hole” (there by making it a bizmark filled with all types of gooey progressive goodness) drug sales will increase. For that incentive, drug makers will be assessed 23 Billion in penalties. In the WSJ today, in an opinion piece (which I agree with) the point is made that Obama in not anti-business, rather he is so PRO business that he wants to have more government control of it. Most readers would be well served to read the book “Liberal Fachism” in order to more clearly see what Progressives like Woodrow Wilson and Teddy Roosevelt thought 100 years ago and the fundamental changes they tried to implement. There are very clear parrallels to what Obama’s “Fundamental Change” really means today. It is conaind in his porposals for control of education loans, his well funded civilian defense corps, direction of business priorites and is certainly contained in ANY Democratic “Healh Care” proposal.

  3. Posted April 22, 2010 at 11:30 pm | Permalink

    @Marco I know what your mean. In the current economy its hard to find a job that pays good and is stable . I have found that if you just work hard and are consistent you can succeed. Look at the author of this page , they are clearly hard working and have just been consistent over time and are now enjoying at least what would appear as somewhat of a success. I would encourage everyone to just keep hustling and moving forward.

  4. Posted June 8, 2011 at 7:59 pm | Permalink

    According to a recent poll, only 82% of Democrats would re-elect Barack Obama if they could vote today. They voted for hope and ended up with change.

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