Health insurers aren't the only industry delighted at the implications of Republican Scott Brown's Senate win in Massachusetts for the prospects of healthcare reform. After the GOP victory was safely in hand, the prices of globally traded Big Pharma stocks rose across the world, reports the Financial Times -- a sign that drug makers, even if they had previously agreed to support the bill, would still rather have no bill at all.
Jeffrey Holford, analyst at Jefferies International, said: "If the market views a failure of the bill as likely, it will be seen as a positive for the large-cap pharmaceutical companies as the industry was helping fund the bill by at least $80bn during the next 10 years."
The $80 billion was to come in the form of rebates that would keep drug prices down for consumers. For progressive critics of the healthcare reform bill, the agreement was just another example of inside dealing with entrenched market players, instead of meaningful change. But for Big Pharma execs, $80 billion was a big chunk of cash that they'd rather not spend, if they could keep their prices and profits high.
If healthcare reform does falter, it will be interesting to see what happens to the provision of the bill that Big Pharma lusted after the most -- a 12-year period of marketing exclusivity for complex "biologic" drugs. Last week, President Obama suggested that 12 years was too long to keep generic makers from introducing lower priced drugs, and pharmaceutical lobbyists immediately went on the warpath,and threatened to withdraw their support of the bill. But if there's no bill at all, that question will have to be solved in some other fashion.