The latest from DTC Perspectives

President Obama

Congratulations to Senator Obama. It is an exciting moment whenever we have a new administration, particularly in this time of fear and pessimism. For those of us who work in the drug industry “change” will be both good and bad. First, let's get to the good part. It is likely we will evolve to greater insurance coverage of our population in the next few years. That means more potential users of pharmaceutical products. We also can expect fewer people to go bankrupt because of illness. That is a good thing for society.

For free marketers, the increased government involvement in health care is a bad thing. I have said previously that I have renounced my total belief in free market solutions. Health care is too complex to expect the average citizen to make informed cost effective decisions no matter how much information is available. On the other hand, merely forcing insurance companies to cover everyone is also a faulty solution. No insurance company or health care provider will lose money to treat people just because government wants it. I do not expect Obama's wide coverage plan to work as well as he says.

What will happen to the price of drugs? We will get negotiation of prices through Medicare. Prices will come down although not as much as politicians think. After all, health insurers have been negotiating hard on Medicare's behalf for the past few years. Also, we will get re-importation from Canada and Europe. That will also not be as impactful as Congress hopes. Drug companies will produce enough for local demand and any re-importation will create shortages in those countries. National governments will step in to regulate exports to the U.S. and stop the flow.

Will DTC be hurt under the Obama FDA and Congress? I am not expecting draconian changes. There will be increased regulation mostly through more conservative review of ads, more warnings and fines. I also expect risk guidances to be more imposing and create more problems producing a 60 second branded ad for broadcast. DTC will not be banned or made impossible through regulation. Print, web, direct, and point of care may benefit if more risk disclosure is required. Given the financial debacle, folks like Henry Waxman will get most publicity out of hammering Wall Street in the first year. He will get to pharma eventually, but somehow the “horrors” of DTC ads seem minor compared to a meltdown of our economic system.

I welcome a renewed look at our healthcare system. It is a mess now and is not sustainable given the absurd annual cost increases. I think Democrats, however, need to realize that nationalizing healthcare will create significant problems in the transition period. We may end up with a Canadian system but not without major angst from the current healthcare providers, patients and insurers. It may take a decade to ease into a government run system. I also urge lawmakers not to take free choice out of the system. That means allowing doctors to take fees from anyone seeking extra services. If I want to pay out of pocket for faster service that should be my right. Mandating slower care to ensure everyone is treated the same will not work and just encourage Americans to seek premium services elsewhere. This is what many Canadians do now when they need their MRI.

So Mr. Obama, good luck in this complex time. The Democrats now have the power to make significant changes. I hope they use that power wisely. No solution is as simple as the campaign slogans used by either party. National health deserves a fair hearing. It works elsewhere. Americans need to realize, however, that government health means rationing and longer waits. It may mean less choice of physicians and drugs. That may be what we need to prevent bankrupting us all. Let's just think it through Mr. President-elect. We have waited this long using our patchwork system and we can wait a few more years to do our homework.