Big Pharma Supports Health Care Reform

By Kevin Grewal, Editorial Director at www.SmartStops.net

NEW YORK (TheStreet.com) -- Despite all of the controversy surrounding the Obama administration's health care reform bill, there is a good chance that some version of the bill will be passed by year's end and America's biggest pharmaceutical companies are supporting the bill.

Pharmaceutical companies are expected to pour nearly $150 million into advertisements supporting the reform, and it makes sense. One reason is because the main focus of the industry has warped from being one that tries to sells pills to the masses to one that markets extremely expensive treatments to small groups of sick people.

Take a company like Merck(MRK Quote), for example, who came out with Zocor, a blockbuster drug that provided the life-saving benefits of lowering cholesterol, or Pfizer's(PFE Quote) top-selling cholesterol drug Lipitor. The benefits of these drugs, in conjunction with the ability of these companies to actively market them on television, led to a golden age of profits for these companies. It was a good ride while it lasted, but it is all coming to an end with the expiration of patents and the emergence of generic drugs.

What's ironic is that the generic market is one reason pharmaceuticals are protected from the health care reform debate. A recent study indicated that drug costs comprise nearly 10% of health care spending and are expected to remain a small piece of the pie, which has caused many pharmaceutical companies to focus on smaller markets like antipsychotic medicines.