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U.S. president Barrack Obama yesterday signed into law the healthcare reform bill that had been narrowly passed by the House of Representatives on Sunday (22 March). Shortly after the signing, 13 states challenged the reform bill, which expands healthcare coverage to 95% of the U.S. population. The lawsuits have been filed by the attorneys general of Alabama, Colorado, Florida, Idaho, Michigan, Nebraska, Pennsylvania, South Carolina, South Dakota, Texas, Utah, and Washington–which are challenging the reform in a joint law suit filed in a Pensacola, Florida, federal court. Meanwhile, the attorney general of Virginia has filed a separate lawsuit challenging the healthcare reform bill as unconstitutional.

Significance:The states’ challenge does not, in the opinion of IHS Global Insight, present a serious threat to the new healthcare bill in view of the supremacy of federal over state law. The more immediate challenge to the healthcare bill is the vote on the “fixes” between the Senate and House versions of the bill due to take place this week. Senate debates, initiated yesterday, indicate that Republicans see the Senate vote as a last-ditch attempt to derail the bill. However, considering that Democrats have 59 seats in the Senate and only 51 votes are needed to pass the “fixes” (which are to be approved under a budget-reconciliation procedure), a Senate approval of the bill is likely. Assuming Senate approval, the main challenge for U.S. healthcare reform would be attempts to repeal certain points of the bill should Republicans muster a majority after the November 2010 mid-term elections. Repealing the bill in its entirety, however, is an unlikely outcome. Pharmaceutical companies are not expected to be adversely affected by the health reform provisions at this stage and should, in fact, benefit from access to a wider market, as 32 million Americans join the ranks of those with health insurance. However, cost-containment measures affecting the pharmaceutical industry cannot be ruled out in the long term. March 24, 2010

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