Pharma Faces New Political Landscape

Republican gains in Congress create uncertainty for healthcare reform, drug regulation, and biomedical research.
Dec 02, 2010


Jill Wechsler
The Republican wave that swept many long-standing Democrats out of Congress and state houses last month raises unusual challenges for pharmaceutical manufacturers. While the slow pace of economic recovery and continued high unemployment were the top issues stirring voter discontent, healthcare reform emerged as a deciding factor when unhappy Americans went to the polls.

With new leaders controlling the House of Representatives, and Democrats holding a narrower majority in the Senate, Republicans will be looking to deliver on promises to cut government spending and to repeal or revise what they call "Obamacare." This will not be an easy task, as many provisions of the Affordable Care Act (ACA) are highly popular, including closing the doughnut hole in the Medicare drug benefit, requiring insurers to cover patients with pre-existing conditions, and providing tax credits for small businesses purchasing employee coverage. There's broad support for approving similar versions of biotechnology therapies that will be more affordable for patients, a provision championed by consumers and biopharmaceutical manufacturers alike.

To satisfy candidates who ran successfully against Obamacare, the new House leaders are gearing up for a vote to repeal healthcare reform early next year. This move would largely be a symbolic gesture because it's unlikely to pass the Senate or override Obama's veto pen. Drug companies and insurers are anxious to extend coverage to the 30 million uninsured Americans in order to expand markets, and the individual mandate is key to achieving this goal; without some penalty for being uninsured, consumers will wait until they are sick to purchase health insurance, and premiums will rise. The worst-case scenario for biopharmaceutical manufacturers is that the promised expansion in healthcare coverage evaporates, leaving companies with added fees and rebates, and considerable uncertainty about reimbursement for new therapies that are costly to develop.