PharmaTech Talk reports what's in the new FY 2014 budget proposal that's in favor of Big Pharma? Not much apparently. First off, it appears FDA will be losing more money for drug oversight. Any added resources they will get will have to come from pharma user fees, i.e. they will pay as they go.
Pharma will also be asked to pay for more of the Medicare drug benefits, especially to help the government close the Medicare Part D "donut hole". The proposal is for pharma to increase discounts from 50% to 75% in this category -- which should cost them about $11 B over 10 years.
What else is in the grab bag? Well, under Medicare Part B pharma will be asked to to accept a reimbursement rate of ASP plus 3% instead of the current 6%. This will cost them another $9 B over 10 years.
Obama also proposes to extend Medicaid drug rebates to Medicare dual eligibles. This should cost pharma $3 B more next year and a tidy $142 B over 10 years. Couple this to a ban on pay-for-delay and ring the cash register to the tune of another $740 M next year and $11 B over 10 years. This is suppposed to increase generic drug use.
Further, there is a proposal to cut the exclusivity period for biosimilars from 12 years to 7 years. That's expected to be worth $3 B in savings.
Add it all up. Looks like potentially $176 B over 10 years. Put that in your patent cliff and smoke it! Then take 2 aspirin and call me in the morning.
Posted by Bruce Lehr Apr 17th 2013.