Branded Pharma (Merck) Revenue Benefits, As The ACA of 2010 Has "Half-Closed" The Donut Hole

Tonight, most major media outlets are highlighting the slowing growth in overall US health care spending, as delineated in the latest comphrensive US health-care spending report, out of US Health and Human Services Department's CMS -- The New York Times, the PBS Online Newshour and the Wall Street Journal among them. However, I've seen no extended media coverage of how the Affordable Care Act of 2010 (or "Obamacare," if you prefer!) has benefitted brand name pharma manufacturers' bottom lines. Mr. Frazier mentioned it in passing tonight, at the JP Morgan conference in San Francisco -- but only in passing.

While I understand the political sensitivities here -- multi-billion dollar branded pharmas appearing to reap a large benefit from Obamacare, while small employers claim to be unduly suffering from it -- Mr. Frazier should be highlighting the fact that this means that many more hundreds of thousands of real people of modest means can now afford life saving branded medications, year round. That should be celebrated -- even if it means that pharma's political manuevering in late 2009 is once again dragged back into the spotlight.

It does also mean that Obamacare, or the ACA of 2010, was -- in part -- a real piece of reform, of the delivery system.

Rather than quoting the media -- I'll quote the actual HHS/CMS report (reprint page 92):

. . . .[T]he Affordable Care Act offered a 50 percent discount on brand-name prescription drugs to Medicare Part D enrollees whose out-of-pocket spending for drugs reached the coverage gap, or “doughnut hole.” This provision led to somewhat greater use of brand name drugs by Medicare beneficiaries in 2011 and decreased the amount that Medicare beneficiaries spent out of pocket on drugs. Other provisions affecting Medicare expenditures in 2010, 2011, or both years included coverage for new preventive services and reduced costsharing requirements for existing ones, together with lower payment rate updates for hospitals and certain other providers. . . .

As ever, much more to come -- as the ACA implementation provisions really get rolling, here in 2013.



The historical backgrounder video: