On March 21st, our legislature passed one of the most far reaching bills in healthcare which is destined to have a variety of impacts for our industry. I actually downloaded all 2409 pages of the Patient Protection and Affordability Act of 2010 with its 153 pages of amendments - the Health Care and Education Affordability Reconciliation Act. Needless to say trying to read it was futile, so I have spent some time researching its implications and spoken with numerous colleagues as to what its content really means. Here are some of the impacts I see in the future:

• We will see a variety of innovative marketing approaches as companies identify new markets to target because coverage will expand to 32 million Americans who are currently uninsured.
• There should be an increase in the biosimilar biological market as the FDA creates new regulatory pathways to allow the licensure of biological products as biosimilar products.
• We will have a point-in-time spike in expensive medical device equipment in 2011/2012 as capital equipment marketers create campaigns to ensure customers buy ahead to avoid the 2.9% excise tax that goes into effect January 1, 2013.
• The pharmaceutical excise tax will have less of an impact since it is an "across the board" tax based on market share. (In 2011, the pharmaceutical industry will be subject to a $2.5 billion annual excise tax which increases in subsequent years to $4.2 billion in 2018.)
• Tracking of physician expenses will become even more granular because of the Physician Payment Sunshine Provisions. Companies will be required to begin tracking the names of physicians they provide payments to, along with addresses, specialties, national provider identifiers, name of the drug or device involved, and whether the payment was cash or in-kind services. This information is required to be posted in a public searchable database.
• There will be an artificial cap for smaller employers (250 employees and under) in 2009 and 2010 so they can take advantage of the $1B tax credit/grant opportunity for life sciences companies with under 250 employees. The requirement is for those who develop new therapies to prevent, diagnose, and treat acute and chronic diseases; to reduce long-term health care costs in the U.S.; or to significantly advance the goal of curing cancer within the next 30 years.

The points above focus on the areas that relate specifically to our industry. Other key components of the bill increase taxes to support Medicare, including an incremental Medicare tax on individuals earning over 200K, and couples over 250K, and increase the capital gains tax as well. There are also taxes, caps and a variety of restrictions and reporting requirements placed on healthcare insurance companies as well as employers.

Needless to say this is just the tip of the iceberg. Please, let me know your thoughts by emailing me at ckraft@jacobsmgt.com.