Obamacare Debate at the DTC National
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| ?I prefer a private system to squeeze costs…? -Bob Ehrlich |
Yes, I know Obamacare is not the name of the health reform act. I was reminded of that by one of the speakers supporting the law. That being acknowledged I will continue to use the term throughout this column and probably in many future columns. It is Obama?s law, pushed through by him so why not give him full credit.
Despite my opposition to the law for lack of cost control, experts at the conference seemed to believe it is a net positive for the drug companies. This is based on the addition of at least 30 million new customers who will get insurance under the law. New customers mean more profits, even if the prices are reduced through the deal brokered by the drug lobby.
?Good for the drug industry? is something that can be debated. It is good if these new covered patients get branded drugs. Many of these patients will be covered under Medicaid so I am not sure that there will be a flood of new branded scripts written. There will be some but it is not so clear to me how low income people will be a boon for branded drugs.
Is it good that government will play the role of effectiveness judge? Many drug companies may get some bad news if these panels decide older drugs are much more cost effective than new brands. Their findings will be widely disseminated and this may cause current users to be switched by private plans.
The experts we had discussing Obamacare said our current system was not sustainable. I totally agree that our fee for service system encourages over-reliance on excess tests, procedures, and other treatment. The issue is not whether the system needs to be changed but how it can be changed. What more government involvement means is more bureaucracy, mostly well meaning but usually inefficient and inept.
None of us really have any control over Obamacare at this point. It is likely in the hands of one Supreme Court Justice. That is Kennedy, who is the swing vote. If it is upheld, then the drug industry will live with it. Perhaps effectiveness panels will provide extra motivation to research more breakthrough drugs and that would be a good thing. On the other hand, all the experts agreed that the future of healthcare will be on cost control whether or not Obamacare remains the law of the land. Private markets will also be forced to squeeze cost out of the system.
For drug makers, they will see the squeeze in either system. That means drug companies are going to need to provide added value both in their drugs and in their follow up care. Consumers love branded drugs as long as someone else pays for most of the cost. That is changing through higher co-pays and that trend will continue.
My conclusion is I prefer a private market system to squeeze costs and increase coverage. If we have Obamacare I fear huge cost overruns. After all, government run programs rarely cost less than expected. These bureaucrats are not generally good business people and I have zero confidence that Obamacare can work financially. Many on the left hope that we evolve to a government single payer system. If Obamacare does not control costs, then there will be a push to nationalize healthcare. My cynical nature tells me this is the real plan. Full government control will mean less innovation and slower progress fighting disease. We will end up with adequate care for all. America can do better if we allow the free market to work. We will know in a few months.
Bob Ehrlich, Chairman
DTC Perspectives, Inc.
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