Good news for chemists?

The just-released Baucus plan is reviewed at the New York Times' blog on the health care debate. Here's the headline: "Baucus Plan Pleases Drug Makers, but Not Other Groups."

From the post:

"Analysts for Barclays Capital wrote in a report Friday for Wall Street investors that “insurers continue to be singled out as the villains of the debate."

The drug makers also got what they wanted from Mr. Baucus in guarantees against direct price negotiation by the government over the cost of drugs in Medicare. The Baucus bill is silent on a House proposal to wring rebates from the pharmaceuticals industry for the higher cost of drugs sold to people who qualify for both Medicaid and Medicare since 2006.

Finally, the longstanding Democratic proposals to allow the reimportation of cheaper drugs from Canada is nowhere to be found in the Baucus bill.

So, under the Baucus proposal, here is what the industry has agreed to:

*Accept a total of $23 billion in new fees over 10 years

*Provide drugs at half price in a Medicare coverage gap known as the doughnut hole

*Increase Medicaid rebates to 23.1 percent for patented drugs (up from 15.1 percent now) and 13 percent for generic drugs (up from 11 percent).

*Support a new regulatory pathway for approving generic equivalents of biological drugs — the often expensive products from the biotechnology industry, including many cancer drugs, that so far have been generally exempted from generic competition.

And now, while insurers, device makers and labs step up their lobbying against the Baucus proposal, the drug industry is expected soon to roll out a new TV ad campaign to support it.

So PhRMA has gotten a lot of big things from this: no renegotiation of Medicare Part D, no reimportation. In exchange, they're shilling for the plan and they're also "supporting" the biosimilars campaign that Waxman is pushing. I think the biosimilars campaign is the biggest long-term concern for the industry; biologics are considered more profitable, longer. (P.S. I will laugh my head off if biogenerics/biosimilars turn out to have significant unintended medical consequences.)

Let's not be coy here: the industry that many of us directly or indirectly work for is politically powerful and was able to cut a deal. It remains to be seen whether pharma management can take the revenue given and deliver innovative and profitable drugs -- that's where we come in.

I think what's likely to come out of the House/Senate conference is more likely to be close to the Baucus deal than not. But that's just speculation -- don't exhale just yet.