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Obama's FY14 budget takes aim at pharma

April 11, 2013 12:34 AM UTC

President Obama's FY14 budget proposal would lead to a projected $371 billion in Medicare savings over 10 years in part through increased rebates and discounts from drug companies. Obama's budget, which was submitted to Congress on Wednesday, would require manufacturers to pay additional rebates for drugs sold to "dual-eligibles" -- individuals who receive both Medicaid and drug coverage through Medicare -- which would save an estimated $123.2 billion over 10 years. The budget also would close the doughnut loophole in Medicare Part D by 2015 instead of 2020 by increasing manufacturer discounts on branded drugs to 75% from 50%, which the Obama administration estimates would save $11.2 billion over 10 years.

Additionally, the White House is proposing to authorize the Federal Trade Commission to prohibit pay-for-delay deals between branded and generic companies, which would save an estimated $8.6 billion for Medicare over 10 years. The budget also includes a proposal that would start in 2014 and would reduce the exclusivity for innovator biologics to seven years from the current 12 years. It also would prohibit biologic manufacturers from reformulating biologics into new products to restart the exclusivity process, a process known as "ever-greening." According to Obama's budget, the proposal would lead to $3.1 billion in Medicare savings over 10 years. ...