Fiscal and monetary policy impacts on government expenditures and national debt

Abbott Labs Lobbying Recommendations

Lobbying Recommendations for Abbott Labs

Fiscal policies by the Federal and State governments have a direct effect on the ability of Abbott Labs to remain in a growth position. As a member of the drug and medical device manufacturing market segment, health care & medical policies have the greatest impact on business. Abbott Labs includes lobbying funds as part of its annual budget. This is a prudent measure due to the direct impact that Health Care policy has on both revenues and profit from the lab. Lobbying money must be targeted towards issues that have a direct impact on Abbott's current and future product lines. The following outlines several suggestions for prudent use of Abbott's lobbying budget in the 2013 fiscal year.

Medicare Prescription Drug Savings and Choice Act of 2009

H.R. 684 proposes to require the U.S. government to negotiate drug prices down for Medicare patients. The results of this policy, should it go into affect, will have a negative impact on Abbott's profits. A significant portion of prescription drug users are Medicare patients. Abbot should sponsor opposition to this bill and support any candidate that opposes it.

The official title of the bill is "Medicare Prescription Drug Savings and Choice Act of 2009." Under the proposed form of the bill, doctors will be required to administer the least expensive alternative for patient care, unless it is overwritten by medical necessity (H.R. 684, 2009). This plan would save taxpayers and the governments, but pharmaceuticals companies such as Abbot, would have to soak up the slack. This means lower costs for consumers, but it can spell disaster for the than the pharmaceutical industry.

Increase in Fees for Brand Name Pharmaceuticals

The White House has a goal of making Health Care more accessibility to many Americans. One of the key concerns has been about closing the Medicare "donut hole." This reform measure is targeted towards seniors to make certain that they will be able to pay for their prescription drugs and will not have to skip or cut back on needed prescriptions. The White House claims that these policies will result in new revenues for the pharmaceutical industry. The study was conducted by the White House concluded that this legislation would raise $27 billion for the pharmaceutical industry. This new policy would be administered by the IRS. It is recommended that Abbott Labs support passage of this new bill, as it generates additional revenues for the company. This bill will have a direct impact on rising prescription costs to consumers, as pharmaceutical companies attempt to make up the shortfall. Therefore, a grassroots effort should be established to gain public support for the lobbying goals (Keenan, 2012).

Health Care Reform and Abbot Labs

Health Care Reform has been a key topic of discussion in all areas of American society. This issue affects everyone on some level. For those in the pharmaceutical industry the outcome of these reforms can have an impact on the ability to develop new products and it affects the regulatory environment surrounding them. The bills addressed in this recommendation will have a significant impact on both health care and the pharmaceutical industry. These bills will directly affect revenues and profit generated by Abbott Labs.

When taken in aggregate, these two bills appear to balance each other. However, this net effect is not as simple as it would first seem. The Medicare Prescription Drug Savings and Choice Act of 2009 would cost much more to the pharmaceutical industry than the Increase in Fees for Brand Name Pharmaceuticals would provide in additional revenues. The logic behind the Increase in Fees for Brand Name Pharmaceuticals is that consumers would use the additional savings on prescription drugs to purchase more drugs, therefore benefiting the pharmaceutical industry. However, this is a general assumption and it is not known if seniors would actually pump the savings money back into the pharmaceutical industry, or if they would spend it elsewhere. Therefore, additional revenues to the prescription drug companies are only theoretical.