CVS Health earlier this month named Tom Moriarty to the new position of chief policy and external affairs officer. As explained by president and chief executive officer Larry Merlo, the rationale behind the creation of the role is to “deliver an integrated approach to policy development and external engagement so the company can contribute to the public dialogue and bring forth innovative solutions to important legislative and regulatory proposals.” Moriarty will unite CVS’ government affairs, public policy, legal and corporate communications functions.
Now more than ever, the move makes a lot of sense. Federal, state and local governments account for well over 50% of the nation’s health care expenditures, through a combination of direct spending on Medicare, Medicaid and other programs, tax subsidies, and insurance premiums for employees. And citizens on both ends of the political spectrum are urging legislators and policy makers to mandate changes to a system that is still struggling with fundamental issues of access, quality and cost.
The basic architecture of the health care system, which appeared to be settled with passage of the Affordable Care Act in 2010, remains uncertain. After spending years promising to repeal and replace the legislation, often referred to as Obamacare, and making it a central issue in last fall’s election campaign, Republicans in Congress, who took control of both the House and Senate in January, have thus far failed to act.
After the embarrassing collapse of their first attempt to rescind the ACA last month, Republicans in the House, with support from the Trump administration, continue to search for a formula to accomplish the goal while satisfying both wings of the party. For his part, the president has predicted that, without congressional action, Obamacare will explode.
Democrats remain staunch supporters of the ACA, but they concede the legislation has flaws that need to be remedied. During his wife’s unsuccessful bid for the presidency, former President Bill Clinton called Obamacare the “craziest thing in the world.”
While most members of the party wouldn’t go that far, a consensus exists that more needs to be done to rein in rising premiums and deductibles, keep private insurers in the health care exchanges, and control rising costs. So even if the Democrats were to attain a majority in either chamber in the midterm elections, further wrangling over health care policy is inevitable.
State policy presents additional challenges. Implementation of new regulations governing reimbursement cuts for prescriptions dispensed under Medicaid is a case in point. The National Association of Chain Drug Stores, together with the National Community Pharmacists Association and the Washington State Pharmacy Association, at the end of last month filed suit against the Washington State Health Care Authority. The legal action aims to prevent a rule from going into effect that, the plaintiffs assert, does not address the federal requirement for taking into account adjustments in pharmacy dispensing fees. It is an issue that could well crop up in other states.
The fate of the ACA and Medicaid reimbursements are arguably the most pressing issues facing retail pharmacy today, but a host of others — provider status for pharmacists, efforts to combat prescription drug abuse, the rollout of regulations to enhance the security of the pharmaceutical supply chain, state scope-of-practice regulations, among others — are not far behind.
On top of policy questions related to health care, pharmacy operators are faced with legislation and regulations that impact other important aspects of their business, Trump’s proposal to impose a border adjustment tax being just one example.
CVS’ Moriarty, his colleagues at other retailers, and NACDS have their work cut out for them. Parties trying to influence government decisions that will affect health care delivery and companies’ ability to do business are well organized, well funded and intent on defending their territory.
In recognizing what’s at stake and marshaling the resources needed to deal with the challenge, CVS offers an example that other pharmacy retailers would do well to emulate, working either on their own or through NACDS and other business groups.