PoP Updates are timely and relevant summaries of the health policy and reimbursement issues that impact patient access to pharmaceutical, biotechnology, and medical device innovations. PoP Updates keep our clients aware of critical issues that impact the industry.
Presidential Fiscal Year 2010 Budget Proposal
In February, President Obama sent Congress a summarized version of the budget highlighting his main priorities for the year. Such priorities included overhauling the Nation's Health Care System, with specific changes for the Centers for Medicare and Medicaid Services. Spending would total 452 billion up 6 percent from fiscal 2009. Although Medicaid spending would rise to 290 billion, a 10 percent increase, the budget also calls for significant savings from Medicare and Medicaid, with the largest savings anticipated from a proposal to introduce a competitive bidding system for Medicare Advantage Plans, presumed to save 177 billion over 10 years. For Medicaid, the budget proposes to cut spending by $22 billion over the next 10 years including $1.5 billion in FY2010 primarily through reduced prescription drug costs. The budget would also increase the rebate for brand-name drugs from 15.1 percent to 22.1 percent of the average manufacturers price. The rebate would be applied to new drug formulations of existing drugs. Other Medicaid savings are anticipated from establishing a pathway for FDA approval of generic biologics, expanding family planning services and eliminating the Medicaid Improvement Fund. For further details, contact us at PAREXEL.
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