The Affordable Care Act when introduced in the market was expected to cost the drug makers what with the expiring patents on blockbuster drugs and wave of new regulations. However, as per the market analysts, the pharmaceutical industry is all set to reap benefits ranging from USD 10 billion to USD 35 billion in addition to profits over the next decade.
Mary Tolan of Accretive Health thinks that the new health law, which was designed to bring millions of uninsured Americans various kinds of health benefits since 2014, would be actually also a booming factor to the pharmaceutical industry’s bottom line. The law is set to increase the total revenue by one-third by the end of the decade, as per Global Data, market research report. This would mean that the existing market value of the US pharma industry would boom by 22% by 2020.
After careful analysis of all the market stats, Mary Tolan thinks that the increase in sales and profits comes amid a wave of expiring patents on some of the industry’s most popular brand name drugs. Because of the recent competition from the generic cheaper drugs, the pharmaceutical industries would have seen minimal growth in 2016. However, the health law is expected to pave the way for major growth and increase in revenues, with an estimated USD 115 million being invested in new business ventures over the upcoming decade.
With the new law being introduced in the country, the enrollments in health insurance programs has also increased exponentially and reached a massive number. Mary Tolan of Accretive Health thinks that the new law represents a sudden transformation in the revenues of the existing pharmaceutical companies, in what is yet the largest market of prescription drugs. This change was yet to come, and while market analysts are skeptic that the number of small changes has the potential of negatively impacting the fortune of the pharma industry, the overall balance is expected to remain constant.
This was greatly due to the additional 32 million formerly uninsured citizens who became the potential customers resulting in business opportunities and improvement of bottom lines. To be honest, the pharma industry has also been greatly affected since the rollout of the Obamacare act. Mary Tolan of Accretive Health thinks that the drug industry was one of the key backers of this healthcare reform agenda, which called for various kinds of rebates from drug makers to pay some of the additional benefits to those who were uninsured.
The pharma companies would also have to incur various kinds of excises and taxes on branded drugs. Mary Tolan CEO of Accretive Health thinks that companies will have to make fewer financial sacrifices when the new reforms would finally come to place. However, to ensure so these pharma companies also needs to engineer new legislation that would minimize the effects on their profitability.