Obama’s Health Care Reform is Not as Friendly to Drug Companies as it is For Consumers

United State’s second largest drug making company, Merck and Co., reports having a seventy nine percent drop in profit for their first quarterly in sales. Merck and Co. estimated their 2010 earnings to be $3.27 to $3.41 per share, and found that their net income actually showed earnings of around nine cents per share.

Merck believes that the new health care plan signed by President Obama will cut an estimated one hundred seventy million dollars in sales. The company’s sales were reported to have been cut nearly thirty three million dollars in their first quarter due to the increase in rebates produced for Medicaid with the new Health Care plan.

Merck is a company that is well known for their drug Gardasil released in 2006 to prevent cervical cancer in females between the ages of nine to twenty six as well as their enzyme blocking AIDS medication Isentress. The company believes that a lot of their profit is being lost due to the Health plan requirement that states that pharmacies are to prescribe generic brand prescriptions unless specified by a doctor.

In order to make up for loss in profit, Merck needs to take drastic steps to rebuild their company. It is predicted that Merck will be eliminated nearly fifteen thousand jos and removing twenty five hundred vacant positions within the next to years, which is estimated to save the company three and a half billion dollars by 2010.

It seems that profit is falling all over in the drug production companies. The United States largest drug manufacturer, Pfizer, has reported a first quarter sales reduction of nearly fifty six million.