Industry Changes and Challenges

To expand coverage amidst the economic crisis, Obama will look for ways to cut healthcare costs.
Dec 2, 2008By: Jill WechslerPharmaceutical TechnologyVolume 32, Issue 12, pp. 30-36

President-elect Barack Obama promised to reshape the nation's healthcare system to provide coverage for millions of uninsured Americans. His strategy is to expand federal and local government programs that provide care for individuals and children and to require employers to "play or pay" to support insurance for workers. During the campaign, Obama stopped short of backing a mandate for universal coverage as advocated by many Democrats, but his proposals still raise the prospect of increased government involvement in the nation's healthcare system.
Expanded coverage fits the main goals of pharmaceutical manufacturers. Third-party payment for healthcare services and products, which shields consumers from the real cost of medicines, has boosted drug use during recent decades. With the establishment of the Medicare Part D drug benefit four years ago, millions of seniors who previously paid for medicines out of pocket gained coverage for a significant portion of drug expenditures. The Part D program has been a boon to the pharmaceutical industry, but it also has put the spotlight on drug costs and value and has justified increased Congressional scrutiny of drug pricing, marketing, safety, and effectiveness.
Although many voters cited healthcare as an important election issue, the need for a new economic stimulus package will take priority over healthcare reform. Under pressure to address rising unemployment and low economic growth, Obama is expected to look for limited changes in the healthcare arena for the time being.

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