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<DIV><SPAN class=205495914-06102009><FONT face=Arial color=#0000ff>As you may
know, the drug industry has completely sold out to the
liberals. </FONT></SPAN></DIV>
<DIV><SPAN class=205495914-06102009><FONT face=Arial
color=#0000ff></FONT></SPAN> </DIV>
<DIV><SPAN class=205495914-06102009><FONT face=Arial color=#0000ff>The
Pharmaceutical Research and Manufacturers of America (PhRMA) is helping the Left
outspend the opponents of Obamacare by a 3-to-1 margin. See <A
href="http://www.my60secondscoops.com/publications/id.182/pub_detail.asp">http://www.my60secondscoops.com/publications/id.182/pub_detail.asp</A></FONT></SPAN></DIV>
<DIV><SPAN class=205495914-06102009><FONT face=Arial
color=#0000ff></FONT></SPAN> </DIV>
<DIV><SPAN class=205495914-06102009><FONT face=Arial color=#0000ff>That is
probably why public support for government-run health care has increased in the
latest polls.</FONT></SPAN></DIV>
<DIV><SPAN class=205495914-06102009><FONT face=Arial
color=#0000ff></FONT></SPAN> </DIV>
<DIV><SPAN class=205495914-06102009><FONT face=Arial color=#0000ff
size=4><STRONG>Art</STRONG></FONT></SPAN></DIV>
<DIV><SPAN class=205495914-06102009><STRONG><FONT face=Arial color=#0000ff
size=4></FONT></STRONG></SPAN> </DIV>
<DIV><FONT face=Arial><FONT color=#0000ff><SPAN class=205495914-06102009><FONT
face=Arial color=#0000ff size=4><A
href="http://news.yahoo.com/s/bloomberg/20091006/pl_bloomberg/art21rgbyvra">http://news.yahoo.com/s/bloomberg/20091006/pl_bloomberg/art21rgbyvra</A></FONT></SPAN></FONT></FONT></DIV>
<DIV><SPAN class=205495914-06102009>
<H1>Pfizer Wins While CVS Loses as Senate Weighs Obama Health Plan</H1>
<DIV class=byline><CITE class=vcard>Kristin Jensen and Pat
Wechsler </CITE><ABBR class=timedate
title=2009-10-05T21:01:00-0700>Tue Oct 6,
12:01 am ET</ABBR></DIV>
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<P>Oct. 6 (Bloomberg) -- Drugmakers, hospitals and clinical laboratories are the
winners in the newest version of a plan to expand Americans’ access to health
care that’s set for a battle among Democrats in the U.S. Senate. </P>
<P><SPAN class=yshortcuts id=lw_1254829832_0>The Senate Finance Committee</SPAN>
intends to vote this week on the legislation after becoming the last of five
congressional panels to finish drafting a measure. Leaders in the Democratic-
controlled Senate must then try to combine that version with one the health
committee approved in July. </P>
<P><SPAN class=yshortcuts id=lw_1254829832_1>Pfizer Inc</SPAN>., the world’s
largest drugmaker, and hospital companies including <SPAN class=yshortcuts
id=lw_1254829832_2>Community Health Systems Inc</SPAN>. are benefiting from
agreements with <SPAN class=yshortcuts id=lw_1254829832_3>President Barack
Obama</SPAN> that will limit any threat to their profits. Insurers such as <SPAN
class=yshortcuts id=lw_1254829832_4>WellPoint Inc</SPAN>. beat back an effort to
create a government-run insurance plan, though they lost ground when the finance
panel scaled back penalties for not having insurance. Industries such as <SPAN
class=yshortcuts id=lw_1254829832_5>medical device makers</SPAN> have to
shoulder new fees. </P>
<P>“They all have to pay out something,” said Les Funtleyder, a health-care
analyst at Miller Tabak & Co. in New York. “But everybody has gotten a lot
more out of this thing than the expectations going in, which were very
negative.” </P>
<P>Unsettled Issues </P>
<P>The legislation drafted by the finance panel on Oct. 2 aims to cover millions
of the uninsured and curb health-care costs. A number of questions are
unsettled, including whether to create the government program to compete with
private insurers. The panel decided against the “public optionâ€</P>
<P>House leaders must work to combine the various versions of the legislation,
and votes must be scheduled in each chamber. If the House and Senate pass
measures, the bills would have to be merged during conference meetings before
another round of votes. </P>
<P>While the <SPAN class=yshortcuts id=lw_1254829832_6>Senate Finance
Committee</SPAN> had intended to vote as early as today, it will wait another
day or two to give the <SPAN class=yshortcuts id=lw_1254829832_7>Congressional
Budget Office time</SPAN> to complete an analysis of the measure’s costs, said
Scott Mulhauser, a committee spokesman. </P>
<P>Here are the potential industry winners and losers so far: </P>
<P>Potential Winners </P>
<P>DRUGMAKERS: New York-based <SPAN class=yshortcuts
id=lw_1254829832_8>Pfizer</SPAN> and other pharmaceutical companies overcame
attempts to torpedo a deal they made with <SPAN class=yshortcuts
id=lw_1254829832_9>Finance Committee Chairman Max Baucus</SPAN> and Obama that
limits their contribution to the overhaul to $80 billion over 10 years. Baucus
joined with all the panel’s Republicans and Democrats <SPAN class=yshortcuts
id=lw_1254829832_10>Robert Menendez</SPAN> of <SPAN class=yshortcuts
id=lw_1254829832_11>New Jersey</SPAN> and <SPAN class=yshortcuts
id=lw_1254829832_12>Thomas Carper</SPAN> of Delaware to uphold the agreement
with the drug companies. London-based <SPAN class=yshortcuts
id=lw_1254829832_13>AstraZeneca Plc</SPAN> has its U.S. headquarters in
Delaware, while Menendez represents Whitehouse Station, New Jersey-based <SPAN
class=yshortcuts id=lw_1254829832_14>Merck & Co</SPAN>., among other
companies. </P>
<P>The issue may still come up on the floor because some senators want the
industry to contribute more to cut costs and raise revenue. If the
pharmaceutical makers can keep the deal in place, they’ll come out ahead in
the debate, analysts said. </P>
<P>“If you look at drug spending over the next 10 years, it will be something
like $4 trillion,” said <SPAN class=yshortcuts id=lw_1254829832_15>Uwe
Reinhardt</SPAN>, a Princeton University economist who specializes in health
care. “Well, $80 billion out of $4 trillion; what a bargain.” </P>
<P>LABORATORIES: <SPAN class=yshortcuts id=lw_1254829832_16>Quest Diagnostics
Inc</SPAN>., <SPAN class=yshortcuts id=lw_1254829832_17>Laboratory</SPAN> Corp.
of America Holdings and Celera Corp. escaped $700 million in annual industry
fees proposed by Baucus. Before the committee began work, the Montana Democrat
shifted that assessment to <SPAN class=yshortcuts id=lw_1254829832_18>health
insurers</SPAN>, bringing the total fees to $6.7 billion for an industry led by
Minnetonka, Minnesota-based <SPAN class=yshortcuts
id=lw_1254829832_19>UnitedHealth Group Inc</SPAN>. and Indianapolis-based <SPAN
class=yshortcuts id=lw_1254829832_20>WellPoint</SPAN>. </P>
<P>Madison, New Jersey-based Quest, Burlington, North Carolina-based LabCorp and
Alameda, California-based Celera would also benefit from provisions in all of
the committees that encourage greater use of disease screening. And increased
preventive care may boost providers as a whole. </P>
<P>Newly covered people “will be hungry for health care, and in the medium- and
long-term this will be a win for the entire industry,” said <SPAN
class=yshortcuts id=lw_1254829832_21>John Sullivan</SPAN>, director of research
and a health-care strategist at Leerink Swann & Co. in Boston. </P>
<P>HOSPITALS: <SPAN class=yshortcuts id=lw_1254829832_22>Community Health
Systems</SPAN> of <SPAN class=yshortcuts id=lw_1254829832_23>Franklin,
Tennessee</SPAN>, Nashville, Tennessee-based HCA Inc. and hospitals across the
nation may end up winners after a deal in which they pledged $155 billion in
cost savings largely survived. As part of that agreement, payments for taking
care of charity cases would be reduced only if certain insurance coverage levels
are met, insulating hospitals, said Paul Heldman, senior health-policy analyst
at the Potomac Research Group in Washington. </P>
<P>One area of worry for hospitals has been Baucus’s proposal to set up an
independent panel to advise on Medicare rates, potentially lowering payments to
health-care providers.
<P>“If it becomes a bureaucratic organization that is insulated from the
everyday practice of health care, it will not achieve its promise as a
health-care innovator driving payment reform, but rather, become a cost-cutting
tool,” said Ralph de la Torre, chief executive officer of Boston-based <SPAN
class=yshortcuts id=lw_1254829832_24>Caritas Christi Health Care</SPAN>, New
England’s second-largest <SPAN class=yshortcuts id=lw_1254829832_25>hospital
network</SPAN>.
<P>Still, the commission so far doesn’t look too threatening, Heldman said.
Hospitals “come out net winners,” he said.
<P>Potential Losers
<P><SPAN class=yshortcuts id=lw_1254829832_26>PHARMACY BENEFIT MANAGERS</SPAN>:
Under a Senate finance panel provision, pharmacy benefit managers such as
Woonsocket, Rhode Island-based <SPAN class=yshortcuts id=lw_1254829832_27>CVS
Caremark Corp</SPAN>. and <SPAN class=yshortcuts id=lw_1254829832_28>Medco
Health Solutions Inc</SPAN>. of <SPAN class=yshortcuts
id=lw_1254829832_29>Franklin Lakes, New Jersey</SPAN>, would have to disclose
rebates from drugmakers if they participate in Medicare’s <SPAN class=yshortcuts
id=lw_1254829832_30>prescription- drug program</SPAN> or in new health-insurance
exchanges. The managers act as middlemen between insurers, pharmacies and
drugmakers.
<P>Unions, consumer-advocacy organizations and independent pharmacists have
alleged that benefit managers pocket much of the rebates they receive from drug
manufacturers and retail pharmacies instead of passing them on to insurers and
consumers. The provision is “unfriendly” to benefit managers, though the dollar
impact “is unknown because we don’t know how big the rebates are,” Funtleyder
said.
<P>DEVICE MAKERS: The medical-device industry, which includes companies such as
Minneapolis-based <SPAN class=yshortcuts id=lw_1254829832_31>Medtronic
Inc</SPAN>. and Natick, Massachusetts-based <SPAN class=yshortcuts
id=lw_1254829832_32>Boston Scientific Corp</SPAN>., would be forced to pay $4
billion in annual fees, based on market share, starting in 2010 under Baucus’s
plan. The industry will keep trying to fight those fees as the legislative
process goes forward.
<P>Senators and governors from states where device makers are based, including
<SPAN class=yshortcuts id=lw_1254829832_33>Senators Amy Klobuchar</SPAN> and
<SPAN class=yshortcuts id=lw_1254829832_34>Al Franken</SPAN>, Democrats from
<SPAN class=yshortcuts id=lw_1254829832_35>Minnesota</SPAN>; <SPAN
class=yshortcuts id=lw_1254829832_36>Republican Senator Richard Lugar</SPAN>
from <SPAN class=yshortcuts id=lw_1254829832_37>Indiana</SPAN>; and <SPAN
class=yshortcuts id=lw_1254829832_38>California Governor Arnold
Schwarzenegger</SPAN>, have lobbied for a reduction in the levy.
<P><SPAN class=yshortcuts id=lw_1254829832_39>JPMorgan Chase & Co</SPAN>.
analyst Michael Weinstein said on Sept. 23 the industry was in talks to reduce
its fee to below 2 percent of its U.S. sales of $120 billion. Neither the <SPAN
class=yshortcuts id=lw_1254829832_40>industry trade group</SPAN>, Advanced
Medical Technology Association, nor the <SPAN class=yshortcuts
id=lw_1254829832_41>Senate Finance Committee</SPAN> would confirm such talks.
<P>Mixed Picture
<P>INSURERS: Baucus’s panel scaled back fines for people who fail to buy
insurance. It cut the top penalty for failing to comply with an individual
insurance mandate to $750 per adult, from $1,900 per family. It also waived the
penalties in 2013, the first year that federally backed health-insurance
exchanges would be in place, phasing them in through 2017.
<P>The industry has already agreed to changes such as accepting any new client
regardless of a <SPAN class=yshortcuts id=lw_1254829832_42>preexisting
condition</SPAN>, and new programs to encourage preventive care. Insurers such
as UnitedHealth and <SPAN class=yshortcuts id=lw_1254829832_43>WellPoint</SPAN>
are depending on the mandate to buy insurance to give them a new crop of
healthier clients to make up for the extra costs. Lower penalties might hurt
them.
<P>“They’re going to get more expensive patients, and they’re not going to be
able to spread the cost of those patients over a broader mix of people,” Heldman
said.
<P>The panel passed an amendment from <SPAN class=yshortcuts
id=lw_1254829832_44>Senator Maria Cantwell</SPAN>, a Washington Democrat, that
would allow states to get federal funds to negotiate and buy insurance for
lower-income people. That may pose a threat to Medicaid managed-care companies
such as St. Louis-based <SPAN class=yshortcuts id=lw_1254829832_45>Centene
Corp</SPAN>., Funtleyder said.
<P>Still, insurers also won a critical victory earlier in the week when Baucus’s
panel voted down a proposal to create the government-run insurance program. The
idea is still alive in the House and in the Senate health committee’s proposal.
<P>“The public plan was always the nuclear scenario for managed care,” Sullivan
said. “Without it, the changes are all something the industry can learn to live
with.”
<P>BIOTECH COMPANIES: Thousand Oaks, California-based <SPAN class=yshortcuts
id=lw_1254829832_46>Amgen Inc</SPAN>. and rivals such as Cambridge,
Massachusetts-based <SPAN class=yshortcuts id=lw_1254829832_47>Biogen Idec
Inc</SPAN>. so far have held off many of the most profit- threatening
provisions.
<P>An amendment from <SPAN class=yshortcuts id=lw_1254829832_48>New York Senator
Charles Schumer</SPAN> on biotechnology drugs, which are made from living
organisms, essentially created “an even playing field,” Heldman said. While the
amendment was designed to encourage greater use of generics, it would result in
doctors getting paid at the average price of the copycat drug plus 6 percent of
the brand-name product, not as great an incentive as it might have been, Heldman
said. “You get the higher markup regardless of which drug you use,” Heldman
said.
<P>At the same time, one Senate committee and another in the House would give
biotech drugs 12 years of protection from generic competition, less than the
seven years of exclusivity sought by the <SPAN class=yshortcuts
id=lw_1254829832_49>White House</SPAN> as a way of bringing prices down. Those
measures also create a pathway for approval of the first generic biologics.
<P>Makers of generic drugs such as Lake Forest, Illinois- based <SPAN
class=yshortcuts id=lw_1254829832_50>Hospira Inc</SPAN>. are looking for changes
that would tighten the rules and not allow biotech companies to get another 12
years of exclusivity for slight changes to their medicines. Hospira CEO
Christopher Begley said greater use of generic biologics would cut costs by 30
percent.
<P>“Big biotech has suffered because investors have been so nervous during this
debate,” said Leerink Swann’s Sullivan. “A resolution of the bill will make a
big difference since investors can assess if there has been any real damage.”
<P>To contact the reporters on this story: Kristin Jensen in Washington at <A
rel=nofollow><FONT color=#4485be>kjensen@bloomberg.net</FONT></A> ; Pat Wechsler
in <SPAN class=yshortcuts id=lw_1254829832_51>New York</SPAN> at <A
rel=nofollow><FONT
color=#4485be>pwechsler@bloomberg.net</FONT></A></P></SPAN></DIV></BODY>
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