December 1, 2009 / 8:51 PM / 10 years ago

UPDATE 2-U.S. senator: reform cost for pharma may be higher

* Finance chairman says $80 bln deal not definite

* Industry lobby: sector’s costs still “in same ballpark”

* Some analysts had said bill may cost pharma $100 bln (Adds PhRMA comment, background)

By Susan Heavey

WASHINGTON, Dec 1 (Reuters) - The price tag for drugmakers to help pay for healthcare reform efforts may be higher than the $80 billion deal the industry originally made with Democratic senators and the White House, the head of the Senate’s finance panel said on Tuesday.

“That’s still in discussion. It’s not definite,” Senate Finance Committee Chairman Max Baucus told reporters. “It could be more, but that has yet to be determined.”

Representatives for Pharmaceutical Research and Manufacturers of America (PhRMA), meanwhile, said the bill’s costs to the industry were “still in the same ballpark.”

Drugmakers, who back Democrats’ reform efforts, in late June said they had worked out an $80 billion deal with Baucus’ committee and the Obama administration to help fund lawmakers’ bid to expand health insurance access. The industry offered to give the government higher rebates, among other concessions.

Senate staffers earlier said there were no changes to that deal when Majority Leader Harry Reid last month released the full Senate’s measure that merged Baucus’ bill with another from the health committee.

But some Wall Street analysts have said that the most recent Senate bill released earlier this month would cost the pharmaceutical sector another $20 billion.

Analysts at Oppenheimer Equity research in late November said Reid’s bill expands “the scope of the drug discount program to $100 billion in drug industry cuts,” echoing sentiments from some other industry watchers.

Some experts have said pharmaceutical makers could benefit over time as more people in the United States gain access to health insurance to pay for various therapies. Critics argue that $80 billion is a fraction of what the multi-billion industry could afford.

PhRMA, the drugmaker’s lobby group, said while official congressional estimates have put the industry’s costs at $80 billion, various market implications could alter the bill’s so-called “street score.”

“When you look at certain provisions of the legislation, they have different impacts depending on who you talk to ... We’re still within our comfort zone,” PhRMA Senior Vice President Ken Johnson told Reuters.

Representatives for Biotechnology Industry Organization (BIO), which represents makers of complex biologic drugs, said they were not part of the PhRMA deal and had no comment.

Reporting by Susan Heavey; Editing by Phil Berlowitz, Bernard Orr sheavey@thomsonreuters.com; +1 202-354-5848; Reuters Messaging: susan.heavey.reuters.com@reuters.net

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