HHS Secretary Sebelius: Healthcare Bill to Reduce Pharma Profits by $90 Billion

Rush Limbaugh's and other conservative blogs have been abuzz about a video interview that MSNBC's Dylan Ratigan did with HHS Secretary Kathleen Sebelius yesterday, in which she says that one goal of the healthcare reform bill would reduce drug company profits by almost $90 billion over the life of the bill.  ( Here is Fox News' sound-bite edit of the same video interview )

I'm no fan of the "fair and balanced" Fox (which, after all, calls the bill Obamacare) but this would have an impact on innovation (and, possibly, compliance and, without being jingoistic,  US jobs).  Of course, R&D and manufacturing will have to become more efficient

But what incentives would offset this loss, to promote investment in R&D and manufacturing, and the development of talent, in the U.S. 

Since drug costs (while exorbitant for niched name-brand products) are still a relatively small portion of overall healthcare costs, why would reducing profits, and with them, incentives to improve future therapies, ever be good?

But some of the questions posed by Mr. Ratigan seem to reflect results of a Harris public opinion poll, which show the continued disconnect between pharma and the public----according to the survey, the public views drug costs (and insurance costs) as a major factor in overall healthcare costs. when in reality, even when combined, they only account for a small fraction.  For more, read on.

Is there a failure to communicate here?

AMS