Healthcare's budget-cutting idea: Target drug companies

Pharma companies are accustomed to wearing a bull's-eye. It's a popular sport to take drugmakers out for a little target practice, whether the weapons-bearers are disappointed patients, transparency advocates, or Saturday Night Live writers looking for TV ads to spoof. Pharma fights back, of course; trade associations are masters of the bullet-dodging press release.

Capitol Hill is the current epicenter of pharma-related jousting. Politicians and government officials have been eyeing pharma for months, cost-cutting blades in hand. Anyone who's been watching knows drugmakers have spent millions trying to shield themselves. But the attack is now coming from pharma's flank, as Reuters reports. Other healthcare companies are going after drugmakers, hoping that cuts in pharmaceuticals spending would reduce the need to slash health spending elsewhere.

State governments are advocating drug cuts as a way to avoid cuts to their own Medicaid programs. Hospitals wary of shrinking Medicare and Medicaid reimbursements are backing broader and faster use of cheap generics rather than branded meds. And then there are the proposed rebates for Medicare Part D, which are backed by almost everyone outside the drug industry.

"Many of the players are pointing a finger at pharmaceuticals," Ethan Siegal of the research firm Washington Exchange told Reuters, adding, "If you can knock off $100-billion plus in one fell swoop, it's a very enticing thing and it's smart for other groups to point that out."

For its part, PhRMA says it's not discouraged by the "shark tank" atmosphere surrounding deficit-cutting negotiations. It's simply sticking to its guns on opposing the new rebates. "It's not a new phenomenon," SVP Matt Bennett told the news service. Still, observers say it's going to get worse before it gets better. "You'll see civil war breaking out," lobbyist John Howard predicted.

- read the Reuters story