Dems plans bad for pharma
Mark S. Senak, JD
January 01 2008
January has kicked off the 2008 election cycle, with the Iowa caucuses and New Hampshire primaries taking the lead. The latest Kaiser Family Foundation tracking polls find that healthcare ranks as the second-highest concern among voters. Many on the Republican side are aimed at the base, which is less energized about healthcare than illegal immigration and security concerns. But, as the general election draws closer, healthcare will once again be predominant among all the candidates.
Currently, the overwhelming focus of the candidates' plans is centered on insurance reform that will bring the uninsured into the covered category. Hillary Clinton, John Edwards and Barack Obama went to great lengths to create comprehensive plans that touched on issues beyond insurance, notably into pharmaceutical market reforms in key domains that proponents hope will drive down costs.
Considering cost, there is a perception that higher costs in healthcare are directly attributable, at least in part, to the cost of Rx drugs. To address that problem, a number of proposals, in a democratic future, would have a real chance at becoming policy. First, and most direct, is the infringement on pharmaceutical marketing. This could come in the form of a ban, such as that proposed by Edwards, on DTC advertising for the first few years. Because marketing costs are perceived as such a huge portion of overhead for pharmaceutical companies, the inhibition of DTC, it is thought, would logically lead to a reduction in cost. He positioned safety as a consideration for curbing DTC.
Marketing curtailments also appear at the state level, with proposals to restrict the sale of prescription data to pharmaceutical companies. It is not inconceivable that a national statute could be proposed and gain support.
The other two domains that impact pharmaceutical marketing will be importation and Medicare Part D reform. You may see proposals allowing the federal government to negotiate pricing for the Part D formulary, the object of which is to drive costs down. While Part D reform tends to cut across party lines—with Democrats favoring reform and Republicans, especially Rudy Giuliani and Mike Huckabee, trending toward allowing the market to establish standards—importation is an issue that candidates on both sides of the aisle have favored. For example, John McCain backs importation to drive down costs, while Giuliani cites it as a safety risk. It is notable that Giuliani Partners, his consulting firm, represents large pharmaceutical interests, making stands against company positions unlikely.
Republican-backed proposals are much more goal-oriented than the process-oriented Democrats. But there is little doubt that a Democratic win in November would result not only in significant insurance reform but in a great push to bring generics to market more quickly, create a negotiation process for Part D, establish a regulatory pathway for follow-on-biologics that may not be very protective of intellectual property and an overall curtailment of DTC and other marketing practices, as well as a real drive to create mechanisms for the importation of drugs, thereby creating new competition to push prices down.
Mark S. Senak, JD, is SVP, public affairs, Fleishman-Hillard and author of the blog Eye on FDA (www.eyeonfda.com)