"Everyone Knows Obama Supports Entitlement Cuts — Here’s What They Are
"Republicans are beginning to acknowledge that President Obama indeed supports and has even proposed cutting spending on Medicare and Social Security.
“He certainly understands that you can’t fix the country without adjusting entitlements to fit the demographics of our country,” Minority Leader Mitch McConnell (R-KY) told reporters in the Capitol on Thursday after Obama met with Senate Republicans."
"In the first category are a number of provider-side cuts to Medicare spending listed in Obama’s budget (.pdf).
The most significant of these would align the rebates Medicare receives for prescription drugs with higher rebates that Medicaid receives for the same drugs."
The best estimate is that it will cut an average of 30% off the price of every drug marketed and sold through Medicaid, in the US.
All studies on this has shown that this will DRASTICALLY impact the business plans of all Pharma in the US.
Going forward - no pharma will be silly enough to invest in research and development for "2nd best" drugs / treatments as they are almost just as expensive to develop as first-to-market / best-in-class drugs and with much less profit in the market to share with the makers of those drugs it doesn't make sense. So all drugs in the current pipelines and all those going forward in the future will have a much higher hurdle to cross as they move down it. Will it be clearly clinically superior to those (my be multiple drugs in the market as it is currently structured) or the one (as soon as the market reaches equilibrium if the new regulations are enacted) enough to knock the current front runner out of the market. In product development its called the "King of the Hill Model". This legislation will essentially force the "King of the Hill" dynamics model into existence as it will make it economically inflatable for multiple "Princes" to "Share the Hill" and kept there by expensive Marketing and Sales operations.
Ans also, the market dynamic for justifying "2nd best drugs" in order to hold the price on the Best-in-Class / Market Leaders is almost completely gone.
So, the end of the current market structure of Pharma in the US is nye.
"Republicans are beginning to acknowledge that President Obama indeed supports and has even proposed cutting spending on Medicare and Social Security.
“He certainly understands that you can’t fix the country without adjusting entitlements to fit the demographics of our country,” Minority Leader Mitch McConnell (R-KY) told reporters in the Capitol on Thursday after Obama met with Senate Republicans."
"In the first category are a number of provider-side cuts to Medicare spending listed in Obama’s budget (.pdf).
The most significant of these would align the rebates Medicare receives for prescription drugs with higher rebates that Medicaid receives for the same drugs."
The best estimate is that it will cut an average of 30% off the price of every drug marketed and sold through Medicaid, in the US.
All studies on this has shown that this will DRASTICALLY impact the business plans of all Pharma in the US.
Going forward - no pharma will be silly enough to invest in research and development for "2nd best" drugs / treatments as they are almost just as expensive to develop as first-to-market / best-in-class drugs and with much less profit in the market to share with the makers of those drugs it doesn't make sense. So all drugs in the current pipelines and all those going forward in the future will have a much higher hurdle to cross as they move down it. Will it be clearly clinically superior to those (my be multiple drugs in the market as it is currently structured) or the one (as soon as the market reaches equilibrium if the new regulations are enacted) enough to knock the current front runner out of the market. In product development its called the "King of the Hill Model". This legislation will essentially force the "King of the Hill" dynamics model into existence as it will make it economically inflatable for multiple "Princes" to "Share the Hill" and kept there by expensive Marketing and Sales operations.
Ans also, the market dynamic for justifying "2nd best drugs" in order to hold the price on the Best-in-Class / Market Leaders is almost completely gone.
So, the end of the current market structure of Pharma in the US is nye.