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Lilly, WellPoint CEOs pin health care reform hopes on Senate

 IBJ Staff
November 14, 2009
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On The Beat Industry News In Brief

After the U.S. House of Representatives narrowly passed a sweeping health care overhaul, leaders of Indiana’s two largest health care entities turned their hopes to the U.S. Senate to give them a bill more to their liking.

WellPoint Inc. CEO Angela Braly is counting on the Senate’s airing the “true impact” of the House bill, which she has warned could include layoffs at her company, higher insurance premiums for those currently covered, and even hospitals going bankrupt.

Braly

“I do think there is an expectation that the process in the Senate will be a fulsome one and there will be a great discussion about the true impact of these reforms,” Braly said Nov. 9 at the Reuters Health Summit in New York, according to the news agency.

Meanwhile, drugmakers like Eli Lilly and Co. were upset that the House bill would allow Medicare to use its buying power to negotiate larger discounts from drugmakers, something Lilly has likened to price controls.

Legislation pending in the Senate includes no such provision, which drugmakers have fought intensely since 2003.

“We feel much more encouraged by what’s developing in the Senate,” Lilly CEO John Lechleiter said at the summit, according to Reuters.

Lechleiter

The house bill does include the biggest goal this session for Lilly and its peers: the approval of a pathway for cheaper generic biotech drugs that would allow Lilly to shield its data on its drugs for 12 years after a drug wins market approval, rather than the five years allowed for standard chemical drugs.

That provision is important to Lilly because half the experimental drugs in its pipeline are biotech drugs, meaning they are proteins derived from living cells, instead of standard drugs synthesized from chemicals.

 

With the insurance industry turning increasingly against the pending reform bills, Braly listed several negative impacts she anticipates from the House bill.

It “would actually raise the cost for those with coverage,” she said at the Reuters summit, because of higher taxes and insurance market reforms that would raise coverage costs.

Braly said she fears that the government-run insurance plan, or public option, included in the House bill could lead to lower payments for hospitals, closer to the rates Medicare and Medicaid pay now, which are substantially lower than what private insurers pay.

“Our perception is it could potentially bankrupt some hospitals, depending on the scenario,” Braly told the Reuters summit audience. She added that could make it more difficult for patients to receive care: “The question is whether we’re solving or creating access problems in another way.”

However, the Congressional Budget Office predicts the House public option would negotiate rates with hospitals and doctors, meaning it would pay rates similar to companies like WellPoint. Because it would not have a competitive pricing advantage over private insurers, the CBO estimates only about 6 million Americans would choose the public option.

President Obama, in an e-mail to supporters after the House passed the bill, wrote, “Tonight’s vote brought every American closer to the secure, affordable care we need.”

 

 

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  1. President Obama has referred to the ACA as "Obamacare" any number of times; one thing it is not, if you don't qualify for a subsidy, is "affordable".

  2. One important correction, Indiana does not have an ag-gag law, it was soundly defeated, or at least changed. It was stripped of everything to do with undercover pictures and video on farms. There is NO WAY on earth that ag gag laws will survive a constitutional challenge. None. Period. Also, the reason they are trying to keep you out, isn't so we don't show the blatant abuse like slamming pigs heads into the ground, it's show we don't show you the legal stuf... the anal electroctions, the cutting off of genitals without anesthesia, the tail docking, the cutting off of beaks, the baby male chicks getting thrown alive into a grinder, the deplorable conditions, downed animals, animals sitting in their own excrement, the throat slitting, the bolt guns. It is all deplorable behavior that doesn't belong in a civilized society. The meat, dairy and egg industries are running scared right now, which is why they are trying to pass these ridiculous laws. What a losing battle.

  3. Eating there years ago the food was decent, nothing to write home about. Weird thing was Javier tried to pass off the story the way he ended up in Indy was he took a bus he thought was going to Minneapolis. This seems to be the same story from the founder of Acapulco Joe's. Stopped going as I never really did trust him after that or the quality of what being served.

  4. Indianapolis...the city of cricket, chains, crime and call centers!

  5. "In real life, a farmer wants his livestock as happy and health as possible. Such treatment give the best financial return." I have to disagree. What's in the farmer's best interest is to raise as many animals as possible as quickly as possible as cheaply as possible. There is a reason grass-fed beef is more expensive than corn-fed beef: it costs more to raise. Since consumers often want more food for lower prices, the incentive is for farmers to maximize their production while minimizing their costs. Obviously, having very sick or dead animals does not help the farmer, however, so there is a line somewhere. Where that line is drawn is the question.

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