NACDS chief executive Steve Anderson sheds light on what health care reform will mean for chain drug retailers.
Also in the Chain Drug Review 2010 State of the Industry report:
ALEXANDRIA, Va. — For the past 12 months the National Association of Chain Drug Stores and its president and chief executive officer, Steve Anderson, have been actively engaged in fighting on the front lines in the battle over health care reform.
While enactment of the legislation, which finally took place in March after months of raucous debate, gives the association and its members some tangible gains, no one knows better than Anderson that continued vigilance is essential if retail pharmacy is to realize its full potential.
The following is an excerpt of Anderson’s comments on the impact of health care reform, as well as the need for the industry to keep voicing its message, from an interview with Jeffrey Woldt, vice president and editorial director of Chain Drug Review.
CDR: What does passage of the health care reform act mean for community pharmacy?
ANDERSON: In the pharmacy provisions that NACDS and our allies achieved together, there is some real significance and positive results.
It is important to view this act from the same perspective that NACDS has brought to its public policy advocacy over the past three years. First, we have a long-term view. We need to have a proactive, consistent and constant effort not just when health care reform is front and center as an issue, but always.
Second, even with this long-term perspective, we are obsessed with delivering real wins every step along the way. That is why we considered the health care reform effort to be under way even before the first bill with a reform-related name was ever written.
Even before the 2008 elections, our board had the wisdom to develop and approve the NACDS Principles of Healthcare Reform, and right away we started injecting elements of these principles into legislation that was moving in Congress.
These pre-reform, incremental wins included delaying the Medicaid AMP [average manufacturer price cuts], maintaining pro-community pharmacy aspects of TRICARE, putting into place an Internet pharmacy law that distinguishes between rogue web sites and legitimate pharmacies, securing prompt payment requirements for Medicare Part D claims, creating incentives to spur adoption of e-prescribing in Medicare, allowing for electronic logbooks to track pseudoephedrine sales while allowing paper systems, increasing federal funding for state Medicaid programs through what is called the Federal Medical Assistance Percentage [FMAP], and more.
With regard to the pharmacy-specific provisions of the actual health reform act, these provisions may be yet another step along our transition from existing as an industry and a profession that is under siege to one that is increasingly understood on Capitol Hill.
Throughout this health care reform debate, many of us felt that we were gaining traction in communicating the value of pharmacy. We would talk about the $290 billion that is spent every year in the form of expensive treatments and other results of patients not taking their medications appropriately. We sensed that members of Congress were understanding this important concept of medication adherence.
It’s one thing to see a nodding head in a meeting with a representative or a senator, and it is another thing to see some actual legislative language that reflects what was talked about during the meeting. That’s where the rubber hits the road. And this act includes provisions that are consistent with the positions established by the NACDS board of directors.
CDR: Elaborate on how the act affects issues important to retail pharmacy.
ANDERSON: The act provides continued momentum for MTM [medication therapy management]. It includes a series of grant and pilot programs that include MTM, and makes improvements to the Medicare Part D MTM benefit. This is an issue that has appeal on both sides of the political aisle, because we’re talking about real results for patients, and increasing benefits, and in a way that can help reduce health care spending. We have studies that show, for example, that for every $1 spent on MTM, overall spending was able to be reduced by $12 in certain populations.
On the Medicare durable medical equipment [DME] accreditation requirement, we were able to achieve a conditional exemption for pharmacies. As one member of the NACDS staff said when briefing attendees at our NACDS RxImpact Day on Capitol Hill in March, the best talking point is that this requirement on pharmacies is just stupid, and we need an exemption as just about every other health care provider has.
On Medicaid AMP, the provisions of this act will significantly reduce the draconian cuts of the Deficit Reduction Act of 2005 [DRA]. Members of Congress made it pretty clear that they would not take reimbursement back to pre-DRA levels. But the Senate version of the legislation took some very important steps forward that made us want to ensure that chamber’s version of the AMP section was the one that won the day.
There was a real danger that negotiations could have watered down that language pretty significantly, which we were able to avoid.
The legislation also includes important changes in the definition of AMP, and the method of calculating it, that are much improved over the Deficit Reduction Act. These changes result in a better approximation of pharmacies’ costs for purchasing generic drugs. The act also says that federal upper limits will be set using a multiplier of “no less than” 175% — much higher than the levels set under DRA. Preventing a reduction from 175%, and preserving those important words “no less than,” were essential.
Beyond MTM, DME and AMP — what I call the “acronyms” — other pharmacy provisions include the expansion of Medicaid, which we project will lead to 141 million more prescriptions each year after 2016, when some of these provisions are fully phased in. The act also takes steps to close the “doughnut hole” in Medicare Part D, and maintains Medicare Part D vaccine coverage.
CDR: How can pharmacy make itself heard among all the competing interests in Washington and the states?
ANDERSON: We need to be in there every day communicating. Everybody in pharmacy gets frustrated with government policy, but if you don’t know who the legislative assistant in your congressman’s office is who handles health care, don’t complain. Do something about it. We need to be in contact with that person at least twice a month and tell them what our issues are.
As an industry, we need to be much more sophisticated in using the tools that communicate our message. We’re starting to do that, and people are starting to get it.
CDR: Should the chain drug store industry do more to take that message to the public?
ANDERSON: We do that at every opportunity. Going forward, you’ll see the term adherence in any communication that we send out, along with our theme, “Pharmacy, the face of neighborhood health care.” Everybody in this organization, from our members to our staff, is going to be working to communicate that message.
You can do an awful lot with earned media, and we’re starting to get good results. We’re doing work with RAND Corp. and the National Consumers League. NCL is going to do public service advertisements about adherence, which is terrific. But once again, our real target audience is the 535 members of Congress.
*To read the full interview with Anderson, plus industry outlook and trend articles, economic analysis and drug chain profiles, see the State of the Industry report in the April 26, 2010, print issue of Chain Drug Review.
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