On March 21st this year the much debated American health care reform was approved by the Congress. Insurance companies as well as pharmaceutical companies will be forced to adjust to a new environment created by a number of initiatives included in the reform. However the new environment does not only create challenges but also new market opportunities – opportunities that Danish companies will be able to benefit from.
For Danish companies to be able to benefit from the reform it requires an in-depth understanding of the environment that embraces pharmaceutical companies as well as insurance companies, comprising in particular a thorough understanding of the American regulatory reimbursement practices. The New York office of the Confederation of Danish Industry is ready and capable of helping Danish companies through this process to ensure them a successful establishment on the US market.
New Conditions
The American health care system has been known to be the most expensive in the world and at the same time amongst the most inefficient, compared to other Western countries. If the reform had not been passed it was expected that within a 10 year period 20 percent of all public expenses would have been spent on the health care system. The most essential challenge of the reform is therefore to be able to keep the costs of the system in check while at the same time improving the efficiency and quality of treatments.
As part of the new environment it is expected that pharmaceutical companies as well as insurance companies will be forced to cut their costs. Pharmaceutical companies will most likely be forced to cut their costs as the reform will be funded partly by higher taxes and fees paid by these companies. The insurance companies will be forced to cut their costs as a public health insurance company will be established in order to compete with the private ones creating a more competitive environment benefiting the consumers. Consequently the insurance companies will place more strict demands on which products and treatments they will reimburse, which will oblige the pharmaceutical companies to disclose information about the content and effect of the products to a far greater extent than before. Innovation therefore becomes a key factor for companies to be able to adjust to this environment.
The Winners of the Reform
The companies that will benefit from the reform, American and international alike, are companies that are capable of offering products that have a proven clinical effect and are cost competitive as well as companies that are capable of offering cost competitive medical equipment that can give rise to an efficiency improvement of the American health care system. It is important for Danish companies to be aware of this great opportunity as they can be among the winners of the reform.
7 April 2010