With SCOTUS preparing to take a vote on the individual mandate of the Affordable Care Act (ACA), there is much speculation over what will happen. Many court observers were surprised by the lines of questioning taken by the conservative wing of the court and now have doubts regarding the mandate’s (or the entire bill’s) survival.

There are a couple of interesting angles worth commenting on here. The first one is around court process. Although votes will be taken shortly, these votes are not final until opinions are issued. It is common for a vote or two or more to change sides as majority and minority opinions are firmed up.  This is one the reasons wagering on court decisions are so difficult: the only public part of the process are the oral arguments, but they are really just the opening salvo in a long deliberative journey that has other potential influencers and sounding boards (court clerks and occasional public sentiment to name a few). So this thing is far from over.

Angle number two revolves around the severability clause of the ACA, specifically that there isn’t one. Although many political commentators have suggested that not allowing for the mandate to be severed from the rest of the law was an egregious case of political malpractice on behalf of the former Democratic majority, I believe it was intentional. Think of it as a poison pill. The economic viability of the law (mainly its impact on insurers) falls apart without a mandate. Guaranteed issue and community rating without guaranteed purchase is a time bomb with a short fuse for insurers. It is likely severability was taken out due to insurance industry lobbying. Of course, there is precedent for courts ignoring lack of severability (plenty, actually), so it is not a perfect pill, but I think the feeling was the court may be inclined to strike down the entire thing knowing that the mandate is necessary for making the bill work in practice.

The third item is what does this mean for the Life Sciences industry? Much time and effort has been spent preparing for the bill’s implementation and now the ball is up in the air. Medicaid and 340B expansion, the pharma tax and the med tech excise tax, all uncertain. The industry has to continue assuming the law will stand, but uncertainty of this magnitude is never good for strategy and long-term planning, especially given that in the event of a strike down, health care reform is likely to emerge in some other form in the near future. In June, we’ll know for certain.

HHS head Kathleen Sebelius announced (or dumped) on Friday the news that the White House was backing away from imposing highly specific minimum benefit requirements for private insurers on the health exchanges and allowing states much more leeway within broad categories. While this was likely a political decision resulting from criticism that HCR was too top-down in its approach, it will have some consequences on what type of policies enter the exchanges.

Without further details, the first thing that comes to mind is the emergence of some real bare-bones if not outright junk insurance policies on the exchanges in states that choose to set a low bar (and there will be some). The second is how this affects biopharma. The industry expects to get a significant boost in volume due to HCR as it attempts to hold costs through a variety of mechanisms. The biggest volume booster remains unchanged: the expansion of Medicaid eligibility. What I wonder is whether the industry also had expectations that some narrowly defined minimum drug benefits in the private exchange, combined with the mandate, would significantly boost volume, especially in the individual market. Without federal standards here, many states that resisted the law the in the first place may opt to allow the aforementioned junk policies onto the exchanges with only the most basic prescription drug benefits. I welcome any thoughts on this if you have any.

On November 8 and 9 Model N sponsored the first-annual European Pricing Platform (ePP) High Tech PricingFuel Day in London.

The two-day event drew pricing practitioners from across Europe and across a range of High Tech manufacturing sectors, including semiconductors, electronic components, consumer electronics OEMs, and telco.

iSuppli VP Eric Pratt gave the keynote, which presented an overview of the High Tech landscape, including industry demand signals for 2012 and the impact of supply disruptions in Asia.

The rest of day one featured a Price and Revenue Management case study from Nokia and pricing insights from Honeywell, Vestas, Alcatel Lucent, and Future Horizons.

Day two saw Model N presenting sessions on its Impact analytics platform, High Tech rebates and incentives management, and a case study from IDT.

The event was well attended, with participants interested in learning how to get a handle on controlling pricing transactions, how to address global competition, and improving global forecasting. Almost everyone seemed to agree that global demand will continue to fluctuate and that manufacturers need to be agile around pricing in this volatile market.

Reactions to High Tech PricingFuel Day

“I was really amazed at Model N’s Revenue Management analytics,” says ePP President Pol Vanaerde. “I did not realize such industry-tailored solutions were available for the High Tech industry and these exceed anything I have seen before.”

“There is no question that taking transactional control is a core and first step challenge for anyone looking to progress their company's pricing capabilities and results” – OEM attendee

“I think our industry specific discussions at this conference were very detailed; frankly, this conference has increased my understanding of the context of how pricing in High Tech is challenged by very specific industry trends and factors” – Semiconductor attendee

For those of us out in the West Coast, October usually brings the first precipitation of the rainy season. It also means that RAINMAKER, the annual industry gathering of Life Sciences and High Tech Revenue Management practitioners, is right around the corner.

RAINMAKER 2012 moves ever so slightly down the coast to the elegant Hotel del Coronado outside San Diego, March 6-8.Building on last year's record event, RAINMAKER 2012 will offer three days of hands-on discussions and workshops with industry experts, presentations on new services and capabilities, exclusive networking opportunities, and Revenue Management success stories from executive and operational leaders.

Registration is now open and agenda information is coming over the next few weeks. To learn more, visit: http://www.modeln.com/index.php?l=en&p=rainmaker_2012

Hotel Del

"[Pharma] is always a little bit behind when it comes to using the latest and greatest because we are such a heavily regulated industry, and that makes a lot of sense—we have to be conservative. But we're starting to get to the point where cloud computing is really becoming the norm."

The quote above taken from this online article:

http://pharmexec.findpharma.com/pharmexec/article/articleDetail.jsp?id=7...

from Pharmaceutical Executive earlier this spring nicely frames the current state of cloud in the pharma industry. The article highlights the most commonly believed benefits and drawbacks of cloud computing in the pharma industry. Cost savings and business flexibility top the advantages list while data security is (usually unfounded) the greatest stumbling block. Or for pricing, contracting, and regulatory specialists, the fear that data corruption or loss outside the firewall that could delay or render inaccurate government price reporting and other regulatory requirements. However, in an industry looking for savings in every niche and corner, the cost benefits of cloud are starting to win the argument.

Interestingly, the highly regulated nature of the industry may provide one of the most compelling reasons to consider a enterprise cloud deployment, at least on the revenue management side. After a decade of almost nonstop regulatory change (in the U.S. anyway), from MMA to the DRA to last year's health care reform act, pharma professionals responsible for pricing, contracting, and other process areas directly effected by government mandates - as well as the IT experts supporting them - are probably wishing they had picked a different vocation. An enormous amount of time, energy, and resources have been spent keeping up with this evolving regulatory environment. By leveraging economies of scale, cloud solutions vendors have the ability to ease this burden in the future by making common adjustments to regulatory changes in the cloud, freeing up personnel to focus on improving business value rather than playing catch-up with the bureaucrats.