Along with the Supreme Court's decision that, for the most part, the Affordable Healthcare Act is constitutional has come a firestorm of analysis of what it means to drug companies going forward: more patients, but not as many as hoped, more fees, but those were already planned for. While the sand on this one will continue to shift a little for awhile, for now, Matthew Roden's comment may best sum it up.
"Much ado about nothing," the biotechnology analyst at UBS says in a note Thursday and reported by The New York Times.
To a very large degree, much of what the drug industry bargained for in its $80 billion worth of horse-trading will remain. The insurance mandate remains, and so do increased discounts. Moody's has gotten some play, in Forbes for example, with its dire predictions, pointing out that the act could "cost the drug industry about $85 billion over 10 years."
But the industry got some very important gifts in exchange. The original bill would have provided only 8 years exclusivity on biosimilars, but the industry managed to negotiate that up to 12 years, 50% longer. And while they will be cheaper than original biologics, they won't be discounted like small-molecule generics. Many in the industry already have alliances to tap into this market.
In a separate piece in Forbes, Matthew Herper also points out that many drug companies are now making very expensive, very high margin drugs that patients will only get if insurance helps pay for them. More people on insurance, means more revenue and even with some discounting, drugmakers make out well.
There was the decision in the court's ruling that says states are not required to expand their Medicaid programs as the law envisioned, and that the government cannot penalize them if they don't. An estimated 17 million Americans could have been added to Medicaid through that provision, The New York Times reports, about half of all the added healthcare recipients the law set out to reach.
There is debate about whether states will voluntarily expand programs, but many experts say that the generous payments the law provides to states that do, and because so many states are having to deal with the uninsured in other ways, they expect most states will fall in line on that. And that again means more patients being treated with drugs with a guaranteed payment from the government, suggesting that the industry may get at least what it bargained for.