US legislation "TO COST FIRMS $14.4 BIL"

A new study estimates that four major pieces of legislation will cost the US pharmaceutical industry a total of $14.46 billion by fiscal 1998.

The study was conducted by Price Waterhouse for the Pharmaceutical Manufacturers Association to assess the costs to companies over the next five years arising from the Omnibus Budget Reconciliation Act, the Prescription Drug User Fee Act, government discounts and Medicaid.

It says the revenue-raising provisions of OBRA 1993 will cost drug firms a total of $3.3 billion by 1998, including a higher corporate tax and Section 936 changes. The 1992 user fee legislation will cost $381 million to 1998, and discounts to the Department of Veterans' Affairs and the Department of Defense will cost $573 million over the period. Medicaid rebates paid by companies will total $10.21 billion over the five years, from $1.55 billion in fiscal 1994 to $1.75 billion in 1995, just over $2 billion in 1996, $2.37 billion in 1997 and $2.52 billion in 1998, it adds.