Sunday, March 7, 2010

Healthcare Reform: Reconciliation?

I have to admit to being a bit distracted lately in my blogging because of the recent debates over healthcare reform. (Actually, Larry’s been politely suggesting that I get back on track about Big Pharma.) Here’s my dilemma – I’m not really sure what happens next. Now, coming from someone as highly opinionated as myself this is something.

President Obama’s announcement this week that he expects the Congress to push through healthcare reform despite Republican opposition. Larry Kudlow called this a “declaration of war” on the National Review’s website ( ) this week. The Democrats will probably be forced to use an arcane legislative rule called reconciliation to make this happen. The seemingly unending gridlock in Washington, D.C. may be coming to an end one way or the other. The whole country, if not the world, will be on the edge of its seat for several more weeks until this is over. And, then, then the next round begins.

What can anyone make of this? More to the point, how does Big Pharma or any of the other players in the healthcare industry plan around this? And, let’s not forget all the other problems that Big Pharma is facing – poor new product pipelines, increasing competition from generics, and more aggressive FDA enforcement.

Consensus doesn’t seem to exist on whether or not passage of healthcare reform will be good or bad for Big Pharma. While Big Pharma still seems to be in the President’s camp supporting healthcare reform, I’m still looking for a simple, cogent argument about why healthcare reform is good for Big Pharma. (If any of our readers would refer me to any such links, I’ll be forever in your debt.) Likewise, while gloom and doom prognosticators abound about the impact of healthcare reform on Big Pharma, no one seems to have a straightforward analysis of why.

Now, maybe the problem is the state of the healthcare reform legislation itself. The Senate bill is supposedly about 2,700 pages. I guess trying to sort all the possible implications is a bit daunting.

Or, maybe, just maybe, the healthcare reform debate is irrelevant to Big Pharma. Why do I say that? Not just to be provocative. (OK, OK, I do want to be provocative.) When there’s a lack of consensus, no obvious ways forward, something’s going on. Sure, healthcare reform will change many things but does it mean that the fundamentals of Big Pharma’s business will necessarily change? I’m beginning to think not.

Sure, Big Phama has many issues and challenges to deal with. But, their businesses which have grown to their current size and power by learning to respond to these. Healthcare reform may only be a distraction from the real problems which Big Pharma is facing.

As always, we welcome your feedback. Please contact us at We look forward to hearing from you.

Contributed by Guy de Lastin

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