REPORT SHOWS INDUSTRY FACES A MYRIAD OF ISSUES

The PricewaterhouseCoopers HealthResearch Institute recently predicted thetop business concerns that will face thehealth care industry in 2006. Majorissues include the Medicare prescriptiondrug program, patient safety/technology,and a decreasing drug pipeline.

As a result of the Part D prescriptiondrug program, Medicare will account for28% of prescription drug spending in2006, compared with 2% in 2005. Theinstitute's report cautioned that premiumscould rise if the program does notget enough participants, and forCongress to rein in spending if Medicarecosts continue to grow.

Patient safety will continue to makeheadlines. Industry experts forecast thatcalls for improved patient safety willintensify in 2006. Therefore, the healthcare industry will implement technologiesto help reduce medical errors (eg,electronic prescribing and computerizedhealth records) and improve tracking andreporting of safety and quality standards.

The looming expiration of key patentscould be problematic for pharmaceuticalmanufacturers and could decrease profitsby >50%. The increased competitionfrom generic drugs, the production ofless expensive counterfeit drugs, and theemergence of China as a low-cost manufacturingbase will contribute to thefalling revenues. With the cost of drugdevelopment exceeding $800 million,pharmaceutical companies are under fireto produce more drugs with less money.In 2006, the pharmaceutical industry willfocus on increasing research and developmentproductivity and slashing costs.