The Hindu Business Line : US healthcare market set for price reset

“As Indian drug companies became more active in the US market, they also invite the “attention” of other players in the market, besides the regulator”

P.T. Jyothi Datta

Mumbai, June 10 The US healthcare market is poised for reform this year, a move that will see drug prices getting reset, say experts.

This will be one of the issues that the US President, Mr Barack Obama, will be judged on, said Mr William A. Sarraille, with international law firm Sidley Austin Brown & Wood LLP.

Change is expected in healthcare through expanded coverage to the uninsured, improved quality of medicines and reduced costs.

Imports

The Government is also looking at importing products from a “supermarket” of 14 countries.

If the law passes, products will pass between these countries and the US, he said, adding that the countries included the European Union and Canada.

The move would not just reduce prices, but would also work as a reference price against which the US could reset its prices, he explained.

The healthcare reforms are expected to cost over $1 trillion, he added.

The reform would mean that 43 million more people would come under healthcare coverage, Mr Sarraille said.

But innovator companies feel they do not have incentives anymore to undertake risks related to research, observed Ms Karen F.Harper with KPMG LLP’s National Pharmaceutical Advisory Services.

FDA scrutiny

Also on the cards is the yardstick of comparative effectiveness, where a product needs to be more efficacious than others in its class, he said.

A mere approval from the US regulator will not be enough in the changed environment, he added.

Responding to queries on the intense scrutiny from the FDA on drug companies, leading to some Indian firms feeling the heat, Mr Sarraille said, there was no country-related political agenda to the scrutiny.

It had more to do with politics in the US, he added.

The US regulator is also under pressure and so is extra sensitive to issues concerning manufacturers, he said, adding that it had nothing to do with which country the manufacturers came from.

As Indian drug companies became more active in the US market, they also invite the “attention” of other players in the market, besides the regulator, observed Mr Abhiroop Gandhi, Associate Director, Commercial Compliance with Actelion, a biopharmaceutical company.

Deep pockets

The more successful companies also mean they have deep-pockets, attracting attention and scrutiny, observed Ms Gaurica Manchanda, with KPMG LLP’s Pharmaceutical Advisory Services, who along with other speakers was participating in a conference jointly organised by KPMG and the Indian Drug Manufacturers Association.

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