That's the $64M question I got asked by a client this week and also on the panel at Pharma Marketing today (I'll add the link here later).
We don't know the complete impact yet because no bills have been passed, although much has been debated, often furiously, both in Washington and amongst ordinary people in forums, social media and on the street. Debate is a good thing, it means people care and are energised and involved in the decision making process.
After some thought, here's my simplified perspective:
In general terms, I think we may well see some major impact on Pharma marketing in the following key areas:
1) Coverage expansion – increased coverage for all Americans means that there may well be increased volumes in prescriptions, but also a shift in payer mix.
The companies who develop an optimised reimbursement and formulary strategy will do well here.
2) Government rebate plans and pricing – increased volumes may lead to pricing controls.
Companies need to plan for this going forward. Expensive treatments are more likely to be limited compared to cheaper alternatives. The gravy train of premium priced new therapies, irrespective of effectiveness, is likely to slowed.
3) Comparative effectiveness – the stimulus package included plans for funding of comparative effectiveness under ARRA.
The results of this approach could change which drugs are approved on formularies, based on CER. Companies with solid health economic data for their products are likely to do better.
4) Follow-on biologics – Congress is likely to include a provision in the reform bill for a new FDA pathway for the approval of biologics. Current proposals seek to limit biologics to 12 years of exclusive use.
Companies will need to plan ahead both for existing biologics on the market and future ones in R&D. The new laws will limit future profits if enacted and allow generics to be used earlier. Currently, drug therapeutics have protection for 17 years.
5) Prohibition of branded/generic settlements – proposals to limit settlements between branded manufacturers and generics companies may speed up the availability of generic competition.
Marketers will need to develop life cycle management plans earlier to maximize new formulations and indications prior to the introduction of generics. This will favour large manufacturers over smaller players because they have the resources and budgets to speed up development to make up for lost of future earnings.
6) Sunshine laws – proposals requiring manufacturers to declare relationships with physicians will increase transparency are included in several reforms and enactment of a similar approach already exists in 6 States by law.
This will impact Pharma companies through systems changes and increased compliance controls and oversight.