Former President Bill Clinton and Health Care in the United States

By: Kate Lapins, CIS Director of Small and Mid-Market Pharma
katielapins@cis-partners.com

On Larry King Live on March 11, 2009, former President Bill Clinton was interviewed by Sanjay Gupta, MD, about various health care related issues. As many of you probably remember, President and Mrs. Clinton attempted to reform the US health care system during his first term without success. More than 15 years later, it is one of the big issues on the national agenda and it was interesting to hear President Clinton speak on it. Below are highlights of two issues raised in the conversation. (Please note, I have attempted to accurately represent what was said, but I do not have a transcript of the event.)

What are the differences between the previous attempt to reform health care and the current one?

• From 1993 to 2008, US health care costs have gone from 14% to 16% of GDP, whereas in the rest of the developed world, outside of Switzerland, costs have gone from 10% to 11%. Our costs are not only more but they are increasing at a faster rate.
• A greater portion of the US population is underinsured.
• Insurance companies are not as unified against reform, and some are even in favor of it.
• Doctors are more unified for reform.
• Small business owners now want reform.
• Democrats have the majority in the Senate and the House of Representatives so there is less risk of a filibuster, although it is still a risk.
• Coverage is not the challenge this time like it was last time; cost will be the challenge.

What effect does this have on the pharmaceutical industry?

• With pharmaceutical companies, the US had an unofficial “deal” that a greater proportion of the costs associated with research and development would be absorbed by the US, because we recognize its importance and we like having these activities in the US.
• In the US, we paid $66 billion more for drugs than if these same items had been purchased in other parts of the world – according to a Woods Mackenzie study.
• To close the $66 billion gap, there has to be honest, open dialogue with all parties.
• Keeping the drug companies in the US must still be a priority, but the US can no longer afford to fully subsidize the rest of the world.
• The number of new drugs introduced has decreased.
• Many pharmaceutical companies have lost their emphasis on research and development because it is cheaper to acquire late stage products, and the nature of patents has shifted to smaller components and compounds.
• The first step to lower the costs in the short-term is for the Federal government to negotiate prices for Medicare Part D. They have the volume to negotiate better prices and could serve as a model for future programs.

The other big point raised by President Clinton is that the US is spending more and getting less for health care. He said we need to find solutions that allow us to focus on prevention, screening and early treatment that can provide realized savings over the long term.

Besides the current economic crisis, health care is going to be one of the top priorities of President Obama’s administration and I think the opinions expressed by President Clinton may be indicative of the nature of the discussions and the future changes we can expect.

For more on the interview, see the following sources:
http://www.cnn.com/2009/POLITICS/03/11/lkl.bill.clinton/index.html?iref=newssearch
http://www.cnn.com/video/#/video/bestoftv/2009/03/12/lkl.bill.clinton.cnn