Overhaul may cost drugmakers more than expected

Bloomberg BusinessWeek: The health overhaul legislation will likely cost drugmakers $25 billion more than the $80 billion the industry anticipated when it agreed to back the Democratic-led effort, according to Wall Street analysts. "The extra costs will come from expanding drug rebates through Medicaid, the U.S. insurance program for the poor, [Leerink Swann & Co executive] John L. Sullivan said today at a Bloomberg conference in Chicago." He added that the "[i]ndustry is being asked to shoulder a significant amount and it feels like that which industry will be shouldering is at risk of rising" (Nussbaum, 4/27).

The Wall Street Journal: The new health law also includes opportunities for drug firms. "The health-care overhaul established a regulatory pathway for the Food and Drug Administration to approve follow-on biologics. The provision gives original biologics 12 years of market exclusivity before a successor version can be approved." The drugmaker is planning to capitalize on this. "Pfizer aims to develop biologics that belong to the same class as original biotech drugs but are new therapies that seek to be safer, more effective or easier to use, company officials said" (Rockoff and Loftus, 4/28).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.