US debt deal could hit pharma
pharmafile | August 2, 2011 | News story | Sales and Marketing | Obama, PhRMA, US, healthcare reform
The deal to raise America’s debt ceiling could have long-term consequences for the US pharma industry.
The tense stand-off between President Barack Obama’s Democrat party and the Republicans was ended in an eleventh-hour deal to avoid the country defaulting on its loans.
The debt limit will now be raised $2.4tn (£1.5tn) from $14.3 trillion, but both parties have now signed up to cutting federal spending by at least $2.1tn within a 10 year period.
President Obama had wanted to avoid deep cuts to public spending by raising taxes, but was blocked by the Republican-controlled Congress.
However the President is expected to attempt to raise new revenues by other means. One of these could be to give the government’s healthcare programme Medicare greater negotiating power on drug prices, potentially saving the country billions of dollars.
Such a move would be likely to be opposed by Republicans, but would hit pharma revenues if it were passed into law.
The US pharma industry has already spoken out against any such move. Lobby group PhRMA says the sector could lose around $20 billion in revenue if the plan were to go ahead, and lead to 260,000 job losses.
PhRMA’s Karl Uhlendorf told the Financial Times: “Our strategy will be what it has been, which is to work to continue to educate policymakers in the value and importance of the Medicare prescription drug benefit to seniors and our economy as a whole.”
A 12-member committee will be formed to discuss plans to reduce costs, meaning pharma lobbyists will face difficult debates ahead.
The government is looking to agree a plan for $1.5 trillion in cuts by November, and is taking aim at the major industries in the country to help find these savings, with the oil, gas and banking industries similarly affected.
Ben Adams
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