Key Healthcare Challenges for Obama Congress

Efforts to repeal the Affordable Care Act (ACA) died on election day, as President Barack Obama won a second term in the White House and the Democrats maintained control of the Senate. House Republicans will continue to challenge various provisions in the health care legislation, but key provisions for pharmaceutical companies, such as rebates on drugs for seniors in the Part D coverage gap and authorization for biosimilars, are unlikely to change.

More broadly, the promised expansion of coverage to some 30 million previously uninsured Americans will move forward, although with consumers paying higher premiums and cost-sharing to cover ever-rising costs of health care. The Department of Health and Human Services (HHS) will be working hard to meet a host of deadlines and timeframes for establishing exchanges, defining benefits and expanding Medicaid, much of that involving states that have been reluctant to commit to these new programs in a period of political uncertainty.

The Obama victory offers some stability for the Food and Drug Administration, as the agency continues to implement the FDA Safety & Innovation Act and struggles to find a middle ground between speeding untried new medicines to patients and protecting the public from undue risk and harm. While there won’t be a wholesale change in executive branch leadership, many top administration officials are likely to move on to other roles.

The dark cloud looming over all these programs is the year-end “fiscal cliff”, with nearly $500 billion in tax increases and spending cuts scheduled to kick in January 1, 2013 unless Congress acts.  The White House and Congress have just a few weeks to craft a compromise to avert another economic crisis. Executives at biopharmaceutical companies will be watching closely at how tax and budget proposals will affect corporate tax rates and investment, as well as the specific funding for FDA, the National Institutes of Health and other activities important to biomedical innovation and health care coverage. Efforts to reduce federal budget deficits will take aim at health care costs over all and at prescription drug prices and coverage policies specifically.