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President Obama Hates Drug Companies

President Obama does not really hate drug companies. The title of this blog post probably made you look. Sorry. I just fell into the same trap as this Motley Fool article entitled “Obama Hates Your Drug Company.”
Actually, the article could also be titled “President Obama Loves Your Generic Drug Company.” His new budget proposal includes new law that would allow generics to get on the market sooner rather than later, by reducing the 12-year exclusivity period that biologic drugs have now down to seven years. (I’m oversimplifying the President’s plan a little bit here but that is the gist of it.)
It is unlikely to pass Congress, according to this article. Maybe strangely coming from a plaintiffs’ lawyer, I have some concern about not giving drug and medical device companies enough time to enjoy the exclusive fruits of their discoveries. I don’t know what the optimal period is to balance the competing interests between lower cost drugs and innovation but I just fear there is temptation to tinker with it in the short term to reduce costs (read: Medicare costs) at the expense of innovation.