Pharma critical of Obama budget

pharmafile | February 15, 2012 | News story | Research and Development, Sales and Marketing IPAB, Independent Payment Advisory Board, Medicare, Obama, PhRMA, US, healthcare reform 

President Obama has unveiled a new budget which aims to cut the US deficit by $4 trillion over the next decade, and includes cuts to health insurance programmes.

The budget for 2013 will see $364 billion cut from spending on Medicaid, Medicare and other healthcare programmes over a ten year period.

Savings will be made by cutting Medicare drug rebates, reducing payments to doctors and hospitals, and higher costs for better-off retired patients.  State governments will also carry a greater burden of Medicaid costs, and anti-waste and fraud measures will be extended.

The President also reiterated his aim to promote entry of biosimilar drugs onto the US market, and to clamp down on patent settlements which delay generic launches.

The moves have been greeted by stern criticism from PhRMA, the US pharma lobby group.

PhRMA’s president and chief executive John Castellani said: “Despite President Obama’s many pronouncements to support innovation, advance biomedical research, promote job creation and control healthcare costs for seniors, his 2013 budget proposal flies in the face of these important goals.

“Specifically, proposed mandatory rebates in Medicare Part D are a short-sighted proposition that could destabilise the programme and threaten hundreds of thousands of American jobs.

Castellani quoted one recent estimate which said a $20 billion per year reduction in biopharmaceutical sector revenue would result in 260,000 job losses in the US, and said Obama’s plans would have this affect. He added that PhRMA was worried by moves to reduce data protection for biologics.

“The biosimilars provision of the healthcare reform law – the only provision in the law to garner strong bipartisan support – achieves an essential balance. It provides appropriate incentives to support future medical advances. It supports high-value jobs that are critical to our nation’s economic recovery.  And, it provides savings by creating the first pathway for federal regulators to approve biosimilars.

Castellani also defended patent settlements, which he maintained prevented costly litigation which would keep generics off the market for longer than under the present system.

PhRMA is also concerned by a new government agency which will regulate Medicare costs from 2013, the Independent Payment Advisory Board (IPAB). The pharma industry says the 15-strong committee’s power are too broad, and fear it could enact sweeping Medicare changes.

The industry says it wants to see IPAB scrapped entirely, and opposition to its introduction is said to be growing in Congress, including some from Obama’s own Democrat party.

Andrew McConaghie

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