Healthy Skepticism Library item: 16272

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Herper M
Why Pharma Wants ObamaCare
Forbes 2009 Aug 20
http://www.forbes.com/2009/08/19/pharmaceuticals-obamacare-reform-business-healthcare-washington.html

Abstract:

There are reasons it could be good for drug companies—and they’re not what you think.

Full text:

Despite all the Sturm und Drang emanating from town hall meetings, there’s still a very good chance some kind of health care reform bill will pass this year. And one of the biggest forces working toward that goal is America’s biggest pharmaceutical companies, which are expected to pour as much as $150 million into advertisements supporting the reform effort.

If that last sentence makes you flash back to Bill Murray’s line in Ghostbusters about the end times, mass hysteria, and dogs and cats living together, you’re not alone. On Tuesday, John Boehner of Ohio, the House Republican leader, issued an open letter in which he implored drug companies “to halt this short-sighted, misguided campaign and listen to the American people, rather than continue to collaborate on an effort to spin them.”

The only reason anybody is shocked is because they weren’t paying attention. The truth is that the drug industry is fundamentally different than it was in 1993, when Big Pharma was a powerful enemy of Hillary Clinton’s 1,000-page plan to reform health care. This time, drug companies aren’t likely to be hurt by any politically feasible plan and are unlikely to contribute to growing health care costs. This might even repair their broken reputation, at least a little. And whatever landscape emerges from health care reform may actually be more hospitable to drug companies.

The reason: The drug industry has transformed from a business that tries to sell pills to the masses to one that markets very expensive treatments to small groups of sick people—and that changes everything

It’s hard to overstate how much the drug business has changed in 16 years. When the Clintons tried and failed to push through their health-care reform plan, pharmaceutical companies were on the cusp of a new age in which they would sell powerful pills to the masses. The books Listening to Prozac and Prozac Nation were about to be published, and the clinical trials that would establish the lifesaving benefit of cholesterol-lowering statin drugs like Zocor, from Merck, and Pravachol, from Bristol-Myers Squibb, wouldn’t come out for another year. The rule change by the Food and Drug Administration that paved the way for television ads for drugs didn’t come until 1997.

A slew of new medicines, coupled with advertising and a public faith in technology, led to a golden age of profits for drugmakers. An example of how profitable the drug business became: U.S. sales of industry top-seller Lipitor, the Pfizer cholesterol drug, peaked in 2007 at nearly $9 billion, about the same as Hollywood’s domestic box office take that year.