By Sven Larsen (@zemoga)
What will the Pharma industry be like in 2010?
Even though there are only 10 days left in 2009 I don’t think that’s a question anyone can accurately answer. Not because there’s a lack of experts who could make educated guesses. But because events continue to transpire that cloud the crystal ball for all of us.
The events that took place in Washington this past week could be game changers for everyone in our field. If health care reform does pass the Senate on Christmas Eve (an event that looks more and more likely), it will be a major victory not just for the Obama administration but also for the Pharma industry (which has heavily supported the reform movement). But the real question is how long Pharma and the Government will remain allies.
Last Tuesday, the House narrowly rejected a bill allowing for the importation of prescription drugs from countries like Canada and the UK. However, this legislation has a very real chance of making it back on the docket again. Only next time, if health care reform has already been passed, lawmakers may not be so quick to provide concessions to our industry.
It’s worth noting that this legislation had majority support and if just a handful of Senators change their minds, it could open up a real threat to big and small pharmaceutical companies alike. The White House hasn’t pressed the issue of importation (thanks to the industry’s support of the reform effort and the $80 billion in concessions offered up earlier this year) but given Obama’s on the record support for lower prescription drug costs, this may only be a temporary reprieve. And given the combination the terrible reputation of “Big Pharma” and the upcoming Congressional elections it seems almost inevitable that the issue will be back in the public eye in a big way in 2010.
So how do we deal with the issues of downward pressure on revenues, new legislation and the numerous other complications all these changes bring? I think the only answer for the industry is to be proactive.
Lower prescription drug costs are coming one way or the other. It seems ridiculous, that importation would be the means by which this occurs. As an industry, we need to reach out the administration and find a way to bring costs down without endangering more American jobs and tax revenue. Can we work with the government to use stimulus funds or other programs to identify and develop new revenue streams? Can we find a way to subsidize expensive research and development costs so that these expenses aren’t passed along to the consumer in the form of higher prices? And can we find a way to show average consumers that Pharma companies are on their side, providing real value and benefits to them (building consumer loyalty so that they don’t automatically gravitate to cheaper foreign options)?
There’s no question that we’ve got our work cut out for us and the only thing we can accurately predict is big changes are coming in 2010.
Have you started rethinking your strategy yet?