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Drug firms' windfall stirs concern over Medicare plan

...Those figures reflect Prudential's estimates that Medicare drug plans will negotiate discounts amounting to 5 percent of what the drug companies paid in rebates to Medicaid on those products.

An AstraZeneca representative questioned the study's methodology, saying the profit estimate for Seroquel, a schizophrenia medication, was too high.

AstraZeneca gave no alternate figures.

A GlaxoSmithKline representative wouldn't discuss projected earnings for Lamictal, a treatment for bipolar disorder.

A representative for Lilly said the company expected only a ``modest short-term benefit to sales'' for schizophrenia treatment Company policy prohibits Prudential analysts from discussing reports with non-clients, company spokesman Jim Gorman said.

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Medicare Drug Problems are Hot Topic at Senate Aging Committee

... Broadcast Coverage APM's "Marketplace" on Thursday reported on the Medicare prescription drug benefit.

The segment includes comments from Robert Laszewski, political analyst and health consultant for the insurance industry (Tong, "Marketplace," APM, 2/2).

The complete segment is available online in RealPlayer.

In addition, PBS' "NewsHour with Jim Lehrer" on Thursday reported on the benefit.

The segment includes comments from Mary Grealy, president of the Healthcare Leadership Council, and Ron Pollack, executive director of Families USA (Suarez, "NewsHour with Jim Lehrer," PBS, 2/2).

The complete transcript is available online.

The complete segment is available online in RealPlayer.

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Kaiser Family Foundation.

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Drug firms to get profits windfall

...Those figures reflect Prudential's estimates that Medicare drug plans will negotiate discounts amounting to only 5 percent of what the drug companies paid in rebates to Medicaid on those products.

An AstraZeneca spokesperson questioned the study's methodology, saying the profit estimate for Seroquel, a schizophrenia medication, was too high.

AstraZeneca gave no alternate figures.

A GlaxoSmithKline spokesperson wouldn't discuss projected earnings for Lamictal, a treatment for bipolar disorder.

A Lilly spokesperson said the company expected only a "modest short-term benefit to sales" for sales of $2.04 billion in 2005.

Lilly's earnings per share could rise by 6 percent in 2006 just by escaping the rebates, the Prudential study estimates.

With U.S.

sales of $2.76 billion in 2005, Seroquel's increased Medicare profit could boost AstraZeneca's earnings per share by 8 percent, the report found.

Company policy prohibits Prudential analysts from discussing reports with non-clients, said company spokesman Jim Gorman.

Tony Butler, managing director and pharmaceutical analyst at Lehman Bros., an investment bank in New York, agreed with the report that Medicare would probably have higher drug prices than Medicaid.

Butler estimated the sales windfall for drug companies under Medicare to be between $1.8 bill...

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