Many recent articles have been written about how the Pharmaceutical Industry is poised to see major boosts in profits due to the rollout of the Affordable Care Act (ACA). But are drug manufacturers confident in these predictions? Not necessarily.
Some find it ironic that the ACA may actually drive up prices for the healthcare industry after the battle to repeal the Medical Device Tax did not go as some had planned. Needed to fund the ACA, the Medical Device Tax hits the medical industry on top of already reduced reimbursements for health services and more stringent billing practice regulations. Pressures have been on the medical industry to reduce costs, but some fear that these new taxes will trickle down to providers and hospitals, thus increasing the price of healthcare even more.
Similarly, the ACA has set the stage for a nebulous market for the Pharmaceutical Industry. True, it is generally expected that as more Americans join the insurance rolls, the demand for prescription drugs will naturally increase. However, there is no clear answer as to which drug manufacturers will realize the greatest gain from this new demand. This is in part due to the fact that drug manufacturers are now committed to share the burden of about $100 billion in new taxes and discounts over the next 10 years.
Another factor adding doubt to the Pharmaceutical Industry is the unknown impact of ACA changes to the generic drug approval process. Will an increased approval of generic drugs directly result in higher sales for generic drug manufacturers? Will the wider availability of generic drugs result in curtailed brand name drug sales? How will these factors impact investments in the research and development of new drugs?
While new regulations may generate uncertainty in the healthcare industry, drug manufacturers can still take measures to improve their business processes and generate higher profits through greater efficiency.
JD Edwards EnterpriseOne is an Enterprise Solution with the functionality pharmaceutical companies need to help manage their top and bottom lines. With solutions for accrual support, complex pricing scenarios, and regulatory compliance, JD Edwards EnterpriseOne can bring simplicity and certainty to manufacturers in an otherwise complex and uncertain industry.