Wednesday, July 29, 2009

Healthcare Reform?

I imagine that most loyal readers have picked up on my natural skepticism of pretty much everyone and everything. So when I read something like...

"Drugmakers May Fund $100 Million Ad Campaign on Health Overhaul

July 28 (Bloomberg) -- Drugmakers may ramp up their push for an overhaul of the U.S. health care system by spending $100 million on ads starting as early as September, said a person familiar with the discussion. "

I get really suspicious.

Why would the principal lobbying group for the pharmaceutical industry propose spending $100 million in advertising to support a plan that aims to reduce their revenues by $80 billion over 10 years. Unless.................

Could they know about a loophole that might lead to higher revenues that would more than offset the sales would lose if they cut the cost of certain drugs?

I'll put on my cynic's hat and take a stab at it.....

1) The pharma companies know that this change is coming and want to appear as though they are part of the solution rather than part of the problem.

2) They offer to cut the cost of some medicines over 10 years but don't have to deliver those cost savings because no one will be able to track the "savings"

3) The new health plan will substantially increase the number of insured people in the US. The more people who are insured, the more pharmaceuticals that can be sold by the big pharma companies.

Now maybe they really want to be part of the solution, but I have my doubts....

The health care debate is mostly a political one and one that I'd rather avoid, but when it crosses into the world of business I feel compelled to comment.

* Note: This ad campaign was projected to start in September, but I've seen ads popping up already.

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