This past election was clearly history in the making. For American’s across the land, President-Elect Obama offers hope and a renewed faith in democracy and a revitalized pride in our country. But what does the new administration mean for the pharmaceutical industry?
Healthcare reform was a major platform in the Obama campaign. Interestingly pharmaceutical companies, which typically lean Republican, funded Obama even more than McCain. Perhaps they saw his victory as inevitable.
Unfortunately with reform, pharmaceutical companies often come under attack as charging excess prices for life savings drugs. Mike Pucci at GlaxoSmithKline give a terrific presentation on the value of pharmaceuticals. His message is one not voiced enough by the industry – that life saving drugs save lots of money when used properly and in a timely fashion, avoiding many far costlier diseases, surgeries and other required procedures that inevitably occur without medicines. Regulators are prone to point to the fact that the “production of a pill costs only pennies”, but this erroneous argument misses the bigger picture of the hundreds of millions of dollars that go into research and development, as well as the simply free market fact that we need to motivate discovery with the promise of profit potential. Forcing price controls, reduces profit incentive, and will have the long-term effect of decreasing investment and slowing advancements in medicine.
Only time will tell exactly what the new administration has in store for healthcare. It’s possible the economic credit crisis will by necessity consume the vast amount of the new administrations attention for the foreseeable future. I for one am confident that President-Elect Obama will surround himself with intelligent people, including many free market capitalists, and will rely on their council and advice before making any drastic or sweeping changes.