March 21, 2010 marked the next step in health care reform through the passage of HR 3590 and the reconciliation bill HR 4872. A generalized summary of its impact on pharma are noted below:
· Pharma keeps its $80B agreement to provide savings and rebates. Its fees, to be divided among companies, will be delayed from 2010 to 2011 but increasing from $2.3B a year to $2.7B.
· Wider insurance coverage should increase market (32M more insured).
· The House sought to fully close the doughnut hole, but the bill maintains the industry 50% discount. The government will pay for another 25% discount.
· Rejected Obama’s plan to end “pay for delay” settlements between generic and brand name drug makers.
· Also discards an earlier provision that would have extended a hospital drug discount program.
· Biologics won a 12 year period of exclusive sales for brand name drugs before generics would be allowed.
· Fees for medical device makers are also delayed to 2013, rather than 2010. Their industry tax was also reduced from $40B to $20B and other than an overall industry fee, there is now a 2.9% sales tax.
· Hospitals compromised in allowing the $155B, 10 year deal to lower government payments from Medicare and Medicaid in exchange for an expected increase in insured customers.
· The provision to expand the drug discount program to help certain rural and children’s hospitals was dropped.
· Legislation didn’t include provisions to allow Americans to buy re-imported drugs from abroad and to let the federal government negotiate drug prices.
· AHRQ give authority to provide grants to implement medication management services for treatment of chronic diseases.
· CMS is tasked with determining whether simplified summaries of benefits and risks of prescription drugs on labels or print advertising would improve health care decision making.
· A nonprofit Patient Centered Outcomes Research Institute shall be funded to further the drive toward cost effective high quality medical care.