Current Influences On US Pharma Industry: Analyst

In the USA, the pharmaceutical industry is positively affected by threeevents, according to Hemant Shah of HKS & Company.

First, the Clinton health care program was one of the best things that ever happened to the drug industry, he told the Marketletter, because its miserable failure has meant that it is now hard for any politician to take on health care reform in any meaningful way. The best thing for the industry is for the market to remain non-transparent and fragmented, he said, so that the consumer must, and because the insurance system is paying for medication is usually willing to, use a brand-name drug rather than a generic made by the same company in the same factory.

The second factor also stems from the failure of health care reform. Had there been reform, managed care companies would have gotten enormous power, said Mr Shah, and when that did not happen, managed care tried to implement formularies. This too failed, and drug companies realized that they no longer had to offer rebates or discounts.