Lobbyists circle US drug makers over deficit talks | Reuters

WASHINGTON, Oct 17 (Reuters) - With pressure mounting for a deficit-reduction deal in Congress, the $300 billion U.S. pharmaceutical industry is looking a little like a ship at sea with danger in the water below.

Drug makers have begun to emerge as a favorite target for cost-cutting proposals from others in the healthcare sphere who hope to avoid the fiscal knife themselves, lobbyists and analysts say.

The six Democrats and six Republicans who make up the congressional "super committee" tasked with finding at least $1.2 trillion in deficit savings over 10 years are less than six weeks away from their Nov. 23 deadline to designate cuts.

Analysts say any deal could include $300 billion to $500 billion in reductions from Medicare, Medicaid and other federal health programs -- a prospect that has thousands of healthcare lobbyists frantic to find ways to minimize damage for drug makers, insurers, hospitals, doctors, state governments, the elderly, the poor and the disabled.

"It's really sort of a shark tank," said Matt Salo, executive director of the National Association of State Medicaid Directors.

"You've got advocates for providers, advocates for beneficiaries, advocates for states -- all looking for ways to minimize harm or get something they want."

What some healthcare lobbyists want are ways to help super committee members find large savings that don't affect their own revenues or the benefits available to an estimated 100 million Americans who depend on Medicare and Medicaid.

"Many of the players are pointing a finger at pharmaceuticals," said Ethan Siegal of the Washington Exchange, a research firm that analyzes public policy for institutional investors and businesses.

Among initiatives aimed at the pharmaceutical industry is a proposal backed by President Barack Obama, Democratic lawmakers and health consumer advocates that would impose drug rebates on Medicare Part D, the program's prescription drug benefit plan.

$100 BILLION IN ONE FELL SWOOP

The White House estimates that such a move would save $135 billion over 10 years, or about 42 percent of the $320 billion healthcare deficit savings that Obama has proposed to the super committee.

"If you can knock off $100 billion-plus in one fell swoop, it's a very enticing thing and it's smart for other groups to point that out," Siegal said.

Some healthcare providers, including hospitals, also want the super panel to lower Medicare costs by speeding the arrival of cheaper generic drugs on the market.

State governments, hoping to avoid potential cuts in federal spending on Medicaid, are promoting ideas that would restrict the use of prescription drugs in the $420-billion-a-year program.

The powerful Pharmaceutical Research and Manufacturers of America (PhRMA) trade group vehemently rejects the rebate idea as a failed price control. It also defends Medicare Part D as a program with declining costs and points to U.S. government estimates that predict average premiums for the program's drug benefits will be 44 percent lower than expected in 2012.

Otherwise, industry officials dismiss efforts to shift the cost-cutting burden onto its shoulders.

"We've certainly had our share of quivers pointed at us, that's true. It's not a new phenomenon," said PhRMA Senior Vice President Matt Bennett.

via reuters.com

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