David Prosser: Big pharma bites tongue on healthcare
Wednesday 24 March 2010
Outlook Why the eerie silence from Britain's biggest pharmaceutical companies? On Monday, after more than a year of horsetrading, the US House of Representatives finally approved President Barack Obama's healthcare reforms. Yet 48 hours later, Britain's three FTSE 100 pharma giants – GlaxoSmithKline, AstraZeneca and Shire – have still not told us what they think.
This is a major shake-up of the biggest healthcare market in the world. All three companies have a significant exposure to it. But while The Independent has pressed GSK, AstraZeneca and Shire to give their verdict, none has been prepared to put their head above the parapet.
Cynical observers may conclude that their silence reflects satisfaction with the reforms tempered with caution about being seen to crow about something of such enormous political controversy.
Although the pharmaceutical industry will face some upfront costs from the reforms, it has avoided some of the more troublesome outcomes. Above all, there will be no price caps introduced on their products – and state-by-state negotiations on price will continue.
Compensating for the upfront hit, meanwhile, is the knowledge that these reforms will deliver in excess of 30 million potential new customers – drug sales should rise by 6 to 8 per cent within the next 10 years as a consequence of the legislation.
This has been a job of political lobbying well done. The American pharmaceutical association which represents the industry has spent heavily promoting the case for healthcare reform. No doubt our publicity-shy pharma bosses have been much more vocal in privately voicing their thanks.
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