Health care providers react cautiously to new law

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NEW YORK — Industry response to the passage of health care reform legislation by the House of Representatives varied widely from qualified approval to blanket denunciation.

“The bill is expected to provide health insurance to an additional 32 million Americans, and we expect to benefit from that as a provider,” said Greg Wasson, president and chief executive officer of Walgreen Co., during the company’s second quarter conference call. “As an employer of 238,000 people, we’ll be examining the impact of the bill on our workforce and our retirees along with the bill’s financial implications.”

Tom Ryan, chairman, president and CEO of CVS Caremark Corp., took a generally positive view of the legislation during a presentation at the Barclays Capital Global Healthcare Conference. “In general this is a positive for our company,” he said. “You’re going to get coverage.

“Think about what happened with Med D [Medicare Part D]. When people have coverage, it’s a benefit for us.”

Ryan expressed disappointment that the bill grants 12-year exclusivity to branded manufacturers of biogeneric drugs and noted that a definition of average manufacturer price (AMP) is yet to come.

In terms of the bill’s impact on CVS as an employer, however, Ryan saw little that was negative. “We see little impact on us because we cover preexisting conditions,” he explained. “We pay 70% of our employees’ benefits. There’s a 60% threshold, so we don’t think there will be a lot of changes for us on a go-forward basis as a company.”

At Rite Aid Corp., chairman and CEO Mary Sammons was optimistic but saw some unfinished business ahead.

“Health care reform that results in greater access and improved quality will be good for the country and good for our business,” she said. “We expect to see more prescriptions, but we need to see them at a fair reimbursement to retail pharmacy. And while there are some additional fee-for-service medication therapy management opportunities in the bill, we need to show legislators that neighborhood pharmacists can play an even bigger role in prevention that keeps health care costs down.”

The National Community Pharmacists Association, which represents independent pharmacists, lauded specific features of the legislation, contending that it will improve pharmacists’ ability to enhance patient outcomes and reduce costs. The group pointed to scaled-back reimbursement cuts for generic drugs under Medicaid and to the exemption for most pharmacies from the Medicare Part B accreditation requirement for durable medical equipment, prosthetics and supplies.

The Pharmaceutical Research and Manufacturers of America (PhRMA), which represents branded drug makers, hailed the bill.

“Throughout this long process we have been guided by a belief that all Americans should have access to high-quality, affordable health care coverage and services,” declared a statement issued by the trade group. “This legislation, while not perfect, is a step in that direction.”

PhRMA’s counterpart on the generics side of the business, the Generic Pharmaceutical Association, was ambivalent, expressing sharp disappointment in the 12-year exclusivity granted to branded biologics — more than double the usual five years given to small-molecule drugs.

“Today’s passage of health care reform in the House provides both good and bad news for consumers,” said president and chief executive officer Kathleen Jaeger in a statement. “The good news is that more Americans will have health care coverage and more seniors will have access to generic medicines, thanks to a fix to the so-called doughnut hole.

“The bad news is that the bill provides a biogeneric pathway in name only, giving false hope to patients who desperately need access to life-saving biogeneric medicines. The bill fails to infuse competition and choice into the health care system due to the excessive and unprecedented market exclusivity protections for the brand industry.”


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