In February, biotechnology executives attending workshops at the Biotechnology Industry Organization's (BIO; Washington, DC) CEO & Investor Conference debated the potential impact of future healthcare reimbursement strategies on the profitability of biotechnology products. With the aging US population suffering from more chronic diseases, and the emergence of expensive biotechnology products on the market, it is uncertain whether existing healthcare providers will be able to pay for the anticipated rise in biotechnology treatments. Industry observers are concerned that reforms of the US healthcare reimbursement system could have damaging repercussions for biopharmaceutical manufacturers by shrinking or eliminating potential markets.
The US Department of Health and Human Services (DHHS; Washington, DC) estimates that over the next ten years, senior citizens will spend $1.8 trillion on prescription drugs, far exceeding the funding capacity of existing payors. The most immediate legislative changes are going to be the addition of prescription drug coverage in Medicare, which provides healthcare coverage for the elderly in the United States. On March 4, President Bush unveiled a plan to commit up to $400 billion over the next ten years toward Medicare reform. House Democrats retorted with a plan (H.R. 513) that will reportedly cost $700–900 billion and Senate Democrats are expected to reintroduce a $500 million plan for the same time period. All of these proposals fall short of the necessary amount as projected by the DHHS, and each plan has been criticized by members of opposing parties.
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