Tag Archives: $2 trillion Barack Obama Weekly Address health care reform in US Youtube video feed HD August 1 September 22 2010

Branded Pharma (Merck) Revenue Benefits, As The ACA of 2010 Has “Half-Closed” The Donut Hole

Tonight, most major media outlets are highlighting the slowing growth in overall US health care spending, as delineated in the latest comphrensive US health-care spending report, out of US Health and Human Services Department’s CMS — The New York Times, the PBS Online Newshour and the Wall Street Journal among them. However, I’ve seen no extended media coverage of how the Affordable Care Act of 2010 (or “Obamacare,” if you prefer!) has benefitted brand name pharma manufacturers’ bottom lines. Mr. Frazier mentioned it in passing tonight, at the JP Morgan conference in San Francisco — but only in passing.

While I understand the political sensitivities here — multi-billion dollar branded pharmas appearing to reap a large benefit from Obamacare, while small employers claim to be unduly suffering from it — Mr. Frazier should be highlighting the fact that this means that many more hundreds of thousands of real people of modest means can now afford life saving branded medications, year round. That should be celebrated — even if it means that pharma’s political manuevering in late 2009 is once again dragged back into the spotlight.

It does also mean that Obamacare, or the ACA of 2010, was — in part — a real piece of reform, of the delivery system.

Rather than quoting the media — I’ll quote the actual HHS/CMS report (reprint page 92):

. . . .[T]he Affordable Care Act offered a 50 percent discount on brand-name prescription drugs to Medicare Part D enrollees whose out-of-pocket spending for drugs reached the coverage gap, or “doughnut hole.” This provision led to somewhat greater use of brand name drugs by Medicare beneficiaries in 2011 and decreased the amount that Medicare beneficiaries spent out of pocket on drugs. Other provisions affecting Medicare expenditures in 2010, 2011, or both years included coverage for new preventive services and reduced costsharing requirements for existing ones, together with lower payment rate updates for hospitals and certain other providers. . . .

As ever, much more to come — as the ACA implementation provisions really get rolling, here in 2013.

Some Additional Small-Employer Health Care Tax Subsidy Discussion

I’ve received some very good commentary on my post, from this past weekend, about the small employer health care tax subsidy — so I’ll reprint the back and forth, here:

Anonymous said…

Great idea!! Give tax incentives to keep salaries low. Way to help the little guy.

September 21, 2010 8:48 AM

Condor said…

I take it you mean as opposed to returning the tax break to the richest 1/10th of one percent — a break President Obama is ending.

In any event, arguing that the health care package will keep salaries low is — at best — a selective reading. Afterall, with health care, the effective salary is actually increased (for at least 50 million Americans without health benefits, at present).

So — it boils down to this will cost some group something — in order to secure our future. Would you rather that the wealthiest carry their share, or not? If not, vote with the Republicans — that is the center plank of their entire platform, this time around.

Namaste, and thanks for your observations!

Do stop back.

September 21, 2010 11:16 AM

Anonymous said…

Don’t get me wrong, I think there are good things in this law that Fox News is not mentioning, but I think this particular part misses the mark. Why is it tied to salary at all?

If you have 10 employees earning an average of $25K or less you get a 35% tax credit. If you give them a raise or hire more people, your tax credit goes down.

Seems like they’re incenting the wrong behavior. If I can think of that, why can’t the New York Times? That’s all I’m saying.

September 21, 2010 1:47 PM

Condor said…

I do hear you, but I certainly think that small companies with much-higher-per-employee average salaries ought to be able to fund their own health plans, with only a graduated tax subsidy.

If your particular business has only 11 employees, but all are making $100,000 or more (like many a small architectural, accounting, or law firm), it is not clear in my mind that taxpayers should subsidize health care, there.

The measure we are talking about should help lower-skill, lower income positions at small companies remain eligible for some form of affordable health care coverage. Just as the NYT example suggested — think of a “mom & pop” independent bookstore here.

So, I think it is actually wise policy. In both of our minds, I think, the number of employees ought to be indexed to average earnings — to be eligible for a sliding-scale tax subsidy — so I don’t think we are arguing about whether a line should be drawn — only about WHERE it gets drawn, right?

Thanks for the additional input, here.


September 22, 2010 8:12 AM. . . .

Now, what do you think?