Drug makers' 'Doughnut Hole' Deal To Shave Sales Less Than 1%
BRIEF: Drug makers' 'Doughnut Hole' Deal To Shave Sales less than 1% [The Indianapolis Star]
From Indianapolis Star (IN) (October 1, 2010)
Oct. 01--Drug makers led by Pfizer Inc., AstraZeneca and Bristol-Myers Squibb Co. may provide more than $2 billion in drug discounts to senior citizens next year under a deal pharmaceutical companies made with the White House, according to data compiled by Bloomberg.
Pfizer, the world’s largest drug company, will cede less than half of 1 percent of its $50 billion in annual revenue under the arrangement. The deal provides Medicare beneficiaries who fall into a coverage gap known as the "doughnut hole" 50 percent off brand-name medications. Worldwide sales by brand- name drug makers in 2008 totaled $288 billion, according to data from the drug industry’s trade association.
"This was a good deal for pharma," said Les Funtleyder, a health care analyst with New York-based Miller Tabak & Co. The data "disputes the narrative that health care reform is bad for pharmaceuticals, and as more data emerges I think you’re going to see that narrative play out across the health industry," he said in a telephone interview with Bloomberg.
The drug industry struck the deal with Democrats, who incorporated it into the health care overhaul President Barack Obama signed in March.
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Posted: October 2010