Big Pharma seeks to shape U.S. health plan

NEW YORK (Reuters) - Major drug makers want their voices heard as U.S. Democrats, traditionally critics of the industry, start crafting plans to expand health insurance coverage and cut the escalating costs of care.

Companies are promoting the success of Medicare's prescription drug coverage and potential for pharmaceuticals to save money in the long term.

"We need first a seat at the table," Schering Plough Corp Chief Executive Fred Hassan told the Reuters Health Summit in a telephone interview.

Big Pharma executives are meeting in Washington this week at a gathering of the International Federation of Pharmaceutical Manufacturers and Associations. Hassan, the group's current president, said the location was chosen in recognition of the coming political shifts.

President-elect Barack Obama and fellow Democrats who expanded their majority in Congress vow to make an overhaul of the nation's health-care system a priority.

Democrats have attacked drug makers for high prices, excessive advertising and some manufacturers' handling of side effects.

The pharmaceutical industry, which long favored Republicans with political donations, has shifted contributions in recent years as Democrats gained more power in Washington.

Drug makers now have "extremely good connections on both sides of the aisle. I have personally been called by senior leaders on the Democrat side asking for advice and help, and that's a sign of the new industry versus the old industry," Hassan said.

Companies are encouraged that Obama pledges to include all parties in the debate, he added.

Bayer HealthCare Chief Executive Arthur Higgins, speaking at the Reuters summit in New York, said "we're working very hard to build bridges."

"All we're asking for is we have some points to make. You don't have to accept those points, but we just ask you to listen. That's the beginning of a dialogue," Higgins, president of the European Federation of Pharmaceutical Industries and Associations, told Reuters. Bayer HealthCare is part of Bayer AG.

Wider health insurance coverage could increase use of medicines, but companies are likely to face pressure to lower prices.

Drug makers are prepared to be part of the savings but insurers and other players need to pitch in, Merck & Co Inc Chief Executive Richard Clark said.

"I think we all have to contribute. I don't think it's fair to say that everyone else has to contribute and pharma doesn't. I think we all have to come up with the ways of helping," Clark said at the Reuters summit.

The drug makers are touting the success of Medicare's Part D prescription drug benefits as a model of an efficient government partnership with industry. The federal program for the elderly and disabled helps pay for medicines through coverage offered by private insurers.

The effort greatly expanded access to medications, and surveys show satisfaction rates above 90 percent, Hassan said. Costs are sharply lower than originally projected.

"It's been shown that every sector can become more efficient in terms of competitiveness, and that's been validated by the Part D program, where the results have been very strong and very surprising," he said.

Greater use of medicines also can save money, such as by getting patients to stick with diabetes medications and avoid costly complications, Hassan said.

"You might wind up costing the system a lot less," he said.

(For summit blog: summitnotebook.reuters.com/))

(Reporting by Lisa Richwine, Ransdell Pierson and Susan Heavey; Editing by Dave Zimmerman and Carol Bishopric)