Health Companies’ Momentum May Cut Right Through Reform Savings
Health companies have done better than the rest of corporate America during the past decade, MarketWatch/Seattle Times reports. While profits at the S&P 500 companies declined slightly over 10 years, "[d]ata compiled by MarketWatch show that the 52 health-care companies in the index are about to close out the decade with average profits that nearly tripled." Despite Congress' efforts to overhaul the health system, analysts say "that level of moneymaking seems unlikely to change anytime soon" because "there just aren't many reform proposals that would take a significant bite out of health-care profits (Britt, 11/25).
With that in mind, lawmakers have been eyeing the pharmaceutical industry, PharmExec reports. "Congressional leaders clearly believe that pharmaceutical companies can afford to contribute more than $80 billion [already committed] to support health reform [in part because] the boost in coverage to some 40 million potential customers is a 'sweetheart deal' that will increase sales more than enough to cover those losses." House Democrats are considering a bill that could allow the government to negotiate for Medicare drug prices for the first time, costing the industry another $40 billion over 10 years (Wechsler, 11/24).
Meanwhile, new research suggests another possible pricing controversy. "Medicaid pharmacy costs for the blood-thinning drug Plavix jumped at around the same time the drug's maker started advertising it to consumers -- even though the number of people prescribed the drug didn't change," a study in the Archives of Internal Medicine suggests, ABC News reports (Harding, 11/24).