POLICY/POLITICS/PHARMA: Is Part D the begining of the end for Big Pharma? by The Industry Veteran

THCB’s favorite vituperative contributor, The Industry Veteran, is back with some New Year thoughts. He got what I was up to on NY Eve a little wrong, but may have a closer idea about what the long term effects of the New Year will bring to Big Pharma. The Veteran writes:

A healthy and prosperous New Year to you!! For some reason I have a picture in my mind’s eye of you sitting in a pub, raising many pints to toast in the New Year. At 2:00 a.m. I see you wearing a thick turtleneck sweater beneath a Harris Tweed sport-coat as the proprietor gives his inevitable call, “glasses, gentlemen.”


The following article from Tuesday’s Financial Times says some interesting things about plausible effects of Medicare Part D. The author maintains it will push the US closer to the rest of the world in terms of a national payer system, greater transparency in drug pricing and cost constraints. To advance that last objective, he sees the feds pushing IT and more rational provider management patterns, a sort of revenge-of-the-nerds that should delight you and a segment of your readership. I suppose since neither a Republican or a Democratic administration is likely to enact the sort of changes I would prefer (e.g., tumbrels, guillotines and iron maidens for the Hank McKinnells of the world), the sort of temporized-neuterized change from the back office is better than nothing.


The thing that strikes me as amusingly ironic about Medicare Part D is that it shows the folly of leaving economic planning to the monopolistic corporations.  The US throughout its history has disdained strategic economic planning by government because of the secular faith in the market among the country’s business leaders. So here we have the Medicare Modernization Act as developed by Big Pharma’s Pfizers, Mercks and their PhRMA lobby. They fashioned the MMA, with its confusing, competing PDPs, specifically to prevent Medicare from acting as a single payer that could make volume discount purchases. After all, if they could elect George by manipulating an electoral system to create the illusion that 3,000 elderly Jews in Florida voted for Pat Buchanan, a Rube Goldberg MMA could certainly boost their earnings at taxpayers’ expense. Now here we have consultants, journalists and equity analysts forecasting that by decade’s end, the MMA will do precisely what the CEO malefactors wanted to avoid. I dread to think what would happen if Big Pharma’s CEOs were half as bright as their sycophants in Pharmaceutical Executive and the other vanity rags claim.


Although as the Veteran has pointed out before, the crew running big Pharma in 2003 will be long gone counting their millions by the time those chickens come home to their successors’ roosts.