The chief of drugmaker Eli Lilly & Co. said Wednesday that he expects the bulk of this year’s U.S. health care overhaul to remain intact despite Tuesday’s election victories by anti-overhaul Republicans.
But with Republicans taking control of the House of Representatives from the Democrats, Chief Executive John Lechleiter said he will lobby to overturn at least one provision of the overhaul: the creation of an independent payment advisory board tasked with controlling growth in spending by Medicare.
Lechleiter said he opposes the board because it could recommend a cut in acquisition costs of drugs without considering whether these drugs help lower costs elsewhere in the system, such as by keeping people out of the hospital. Also, he opposes the board’s authority to implement recommendations outside of Congressional authority in certain circumstances.
“We … remain opposed to that approach to controlling costs,” Lechleiter said in an interview Wednesday on the sidelines of a health care conference at the Cleveland Clinic. “Frankly, we would be supportive of measures aimed at repealing or reforming the approach that otherwise would be taken by this IPAB mechanism.”
Lechleiter said Indianapolis-based Lilly has shared its concerns about the advisory board with Congressional members from both parties. Whether the repeal of IPAB is a priority for Republicans remains to be seen. Rep. John Boehner (R-Ohio), the presumptive next Speaker of the House, said Wednesday he wanted to lay the groundwork for the repeal of the overhaul.
But some observers say broad repeal is unlikely, and Lechleiter agrees. “A wholesale repeal of health care reform would be likely very, very difficult to achieve and we’re not anticipating that’s going to happen,” he said.
Lilly, which makes the antipsychotic Zyprexa and erectile-dysfunction drug Cialis, and other large drugmakers supported the bulk of the overhaul. The industry struck a deal with Democratic leaders last year to help fund the overhaul, in exchange for certain protections. Some experts say drugmakers will benefit from the expanded insurance coverage triggered by the overhaul, though it’s unclear how much that will be offset by increased fees.
Lechleiter doesn’t expect some of the early, costly provisions affecting drugmakers to go away as a result of Tuesday’s election. Lilly and other drug companies are paying higher rebates to the Medicaid health program for the poor and providing expanded drug discounts to certain health-care providers. Next year the industry will begin paying fees mandated by the overhaul, as well as discounts that help seniors pay for drugs as part of Medicare Part D.
“We’re planning our business for 2011 and beyond based on the assumption that the current provisions that affect us will remain intact,” he said.
Lechleiter said he hoped Tuesday’s elections led to measures aimed at improving the sluggish economy and promoting fiscal responsibility.
“To the extent that this election was about jobs, about improving the economy, I think, yes, our industry like most others stands to benefit if these goals can be achieved,” he said.
