Obama budget digs deep into pharma's wallet

The dual-eligibles rebate proposal has surfaced yet again. President Barack Obama's budget proposal includes extending Medicaid-level rebates to the 9 million seniors who qualify for the low-income health program. As usual, the idea was met with criticism from drugmakers, which have already agreed to $80 billion in new rebates as part of the healthcare reform package.

In all, new drug rebates would cost pharma $156 billion, Bloomberg reports. And John Castellani, president and CEO of PhRMA, says the proposals belie President Obama's promises to support innovation and promote job creation. "[P]roposed mandatory rebates in Medicare Part D are a short-sighted proposition that could destabilize the program and threaten hundreds of thousands of American jobs," Castellani said in a statement.

PhRMA was no more approving of a proposal to cut exclusivity on biotech drugs to 7 years from 12, as specified in the healthcare reform law. The group also cited a proposal--familiar to anyone following the Federal Trade Commission's battle against "pay-to-delay" deals between generics makers and branded pharma--that would outlaw certain types of patent settlements. "Without settlements, costly litigation could keep these generics from being available to patients for years," PhRMA said.

Meanwhile, the Obama budget also includes new user fees for generic meds and biosimilars, plus higher fees on branded drugmakers. About 45% of the FDA's budget would come from user fees and inspection costs paid by drug- and devicemakers, Reuters reports. Previously, about 30% of the agency's budget was supported by industry-paid frees.

Now, none of these measures is anything more than a proposal at this point. Lobbyists and lawmakers have fought off shorter biologics exclusivity, patent-settlement limits and dual-eligibles rebates before. And in an election year, you can bet the fight will be rough.

- read the PhRMA release
- get more from Bloomberg
- check out the Reuters news

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