Category Archives: Health Policy

As Washington scrambles to prepare for the largest government spending cut in modern U.S. history, no one has more at stake than the health care sector. In spite of undergoing a massive overhaul in 2010 with the passage of the Affordable Care Act (ACA), the U.S. health care system is again facing seemingly inevitable transformation as Congress moves forward with deficit reduction. For biopharmaceutical companies, this means another hard hit to the bottom line that could further exacerbate slowdowns in drug discovery and development. The biopharmaceutical industry is experiencing a bit of an identity crisis. As industry leaders tumble over the “patent cliff,” generic competitors will rapidly erode market shares long enjoyed by blockbuster products. Companies must also adjust to a changing market access environment where payers have higher expectations and more leverage to negotiate lower reimbursement rates. The still-unknown impact of ACA provisions—such as the expansion of comparative effectiveness research and establishment new panels such as the Independent Payment Advisory Board (IPAB)—have created a great deal of uncertainty about the profitability and viability of new and existing products moving forward. Despite much uncertainty, one thing is clear: the industry is undergoing a sea change where they will be expected to deliver much more with significantly fewer resources at their disposal.