David Brennan, Chairman of Pharmaceutical Research and Manufacturers of America (PhRMA) and CEO of AstraZeneca Pharmaceuticals (AZ), presented at a healthcare roundtable organized by Senate Finance Committee Chairman, Senator Baucus (D-MT) to give the industries view on health care reform.

Brennan acknowledged AstraZeneca’s support of Chairman Baucus to realize comprehensive, bipartisan health care reform. He further agreed with the Senator from Montana’s goals for health care reform by asserting that American’s and public officials need to work together. The CEO and recently elected PhRMA chair called for new ideas in health care reform, and not ideologies. He specifically addressed five issues.

1.     Reform must promote quality care for all through increased health coverage and quality care for the uninsured and the under-insured through increased access to health and prescription drug coverage. Brennan noted that PhRMA and Families USA has already joined together recently to introduce policies that would help financially-struggling individuals and families receive the health care they need.  This partnership promotes:

·         The establishment of a Medicaid eligibility standard for all adults at 133 percent of the federal poverty level;

·         The creation of sliding scale subsidies to help low- and moderate-income people and families purchase insurance in a reformed market; and

·         A cap on out-of-pocket expenditures to make needed health care affordable.

2.    Reform must embrace and protect a system that supports a doctor/patient relationship and emphasizes prevention of chronic diseases.  Doctors are a trusted partner for patients in the pursuit of better health, and they are also a source of critical health information.

Brennan cited a year-long survey conducted by AstraZeneca that showed more than a third of the people who contacted their company to inquire about their prescription savings programs learned of the programs from their doctors or pharmacists. This study is very significant because 75 cents out of every dollar spent on health care are spent on chronic diseases, and while chronic diseases are among the most common and costly health problems, they are also among the most preventable since if patients have better access to physicians.

3.    Health care reform needs to include co-pay reform that gives patients real access to the best medicines and treatments since these medicines play a critical role in disease management and prevention.

Brennan mentioned how studies show that newer medicines reduce hospitalization and other non-drug costs.  For each additional dollar spent on newer pharmaceuticals, more than $6 is saved in total healthcare spending.

However, insured patients are forced to pay considerably higher percentage co-pays on medicines than on what they pay for other healthcare services, which creates an undeniable barrier to care.  

A recent Rand Corporation Study that showed doubling copayments resulted in patients cutting their use of common medicines for chronic diseases by as much as 23 percent.  At the same time, visits to hospital emergency rooms increased 17 percent and hospital stays rose by 10 percent among patients with diabetes, asthma and gastric acid diseases.

4.    Reform needs to work toward policies that promote continuous medical innovation by fostering private sector innovation.  The pharmaceutical industry’s fundamental responsibility is to build a pipeline of medicines that make a meaningful difference in patients’ lives. Moreover he noted the importance of industry collaborating with academic institutions and government to share knowledge and spur new ideas.

There are immense benefits from innovation: $65 billion on research and development was spent by U.S. pharmaceutical industries last year; the overall biopharmaceutical sector added $88 billion to the U.S. GDP in 2006; and over 3.2 million people’s jobs have ties to the pharmaceutical industry. Lastly, he acknowledged the importance of a free market in which competition cuts costs and encourages investment to continue bringing medicines from the laboratory to patients.

5.    Strengthening the FDA so that they can do a more timely and consistent job. He acknowledged how AstraZeneca is part of the Alliance for a Stronger FDA, which advocates for increased appropriations so the agency can have the technology and people it needs to do a more timely and consistent job in regulating our industry and bringing innovative treatments to patients.

Baucus Reaction

At the round table Senator Baucus noted that President Obama will be the difference-maker in keeping Democrats united on health reform — and bringing aboard Republican support. Consequently, he predicted that the health reform package he is assembling would get 70 or more votes in the Senate, even though he noted that “not everybody would vote for it.”

Some of the biggest questions have yet to be answered, such as whether to create a government-run public plan option to provide health benefits or how to pay for the massive reform bill.

Baucus as well as the President want something with bipartisan support so that health care reform is sustainable. He even noted how “Momentum is building,” and other Senators and “People want to be part of the solution.”

Timing

PhRMA’s support of healthcare reform goals, this year proves strategic, with the Finance Committee, along with Sen. Edward Kennedy’s (D-Mass.) Health, Education, Labor and Pensions Committee and three House panels, planning to mark up the first drafts of a $1 trillion-plus bill next month, which would seek to dramatically revamp the way healthcare is delivered and paid for and move toward universal coverage.

With the House and Senate intending to vote on their bills before the August congressional recess, the final product is now predicted to be finalized in the fall for Obama’s signature. But growing differences between Democrats and Republicans are growing. For instance, more than one-third of the Senate Democratic Conference, including members of Baucus’s and Kennedy’s committees, have declared in writing that health reform must include the public option, a major sticking point for Republicans and conservative Democrats alike.

Parallel Legislation

Sen. Charles Schumer (D-N.Y.) has been crafting a compromise proposal that would subject the public plan to the same insurance market rules as private insurers. Yet, Charles Rangel (D-NY), Chairman of the Ways and Means Committee rejected this idea, even though the White House has showed some flexibility on this issue.

Ultimately, with the Senate being able to use the budget reconciliation, a partisan procedural device that enables them to disregard the minority party in the Senate by lowering the threshold for passing health reform from 60 votes to just 50, even Senator Baucus is worried. In fact, he noted that if health care reform is just “jammed down the throats of too many senators and House members, it is not going to be sustainable.”