Indiana News

What is the Affect of the Supreme Court's Health Care Ruling on Pharmaceutical Companies?

6/29/2012

Now that the Supreme Court has issued its ruling on the Affordable Care Act, what does it mean for pharmaceutical companies?

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George Telthorst, Director of the Center for the Business of Life Sciences at IU's Kelley School of Business, says companies like Eli Lilly are coming out fairly neutral with the ruling. He says Lilly will have to kick in significant revenue in terms of pricing but will also gain access to a large number of uninsured people who were not able to use their products previously.

Telthorst adds that pharmaceutical companies also did well out of the ruling in terms of biologics, or drug compounds that are grown instead of combined in a chemical form. He says the Supreme Court upheld the provision that companies will have 12 years of exclusivity before another company can create a generic form of a biologic drug.

Telthorst says medical device companies will feel the pinch from the ruling because of a top line tax that will cause them to kick in a significant portion of pre-tax revenue. He says he's hearing that some medical device companies may even consider layoffs in order to combat the tax.

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