NCPA Executive Update

NCPA Executive Update delivers insights on legislative, regulatory, policy, and industry developments from NCPA CEO B. Douglas Hoey, Pharmacist, MBA, to NCPA members and pharmacy leaders every Friday.

Expecting the Unexpected | NCPA Executive Update | November 11, 2016

by NCPA | Nov 10, 2016

Dear Colleague,

Doug Hoey

Tuesday's election results definitely shook the Washington establishment, which had factored in a win for former Secretary of State Hillary Clinton. The Democratic party is taking a long look in the mirror to figure out what went wrong, but both parties face an identity crisis. The Democrats were soundly defeated with fewer gains than expected in the Senate and the House, and the Republican leadership, many of whom had disavowed businessman Donald J. Trump, now find him representing their party and their nation.

Who Trump surrounds himself with in his administration will make a tremendous impact. Particularly important for pharmacy is who will be the next Secretary of Health and Human Services and Centers for Medicare & Medicaid Services administrator. Here are some of my initial observations:

  • Both Trump and Clinton used the rising costs of prescription drugs as part of their platform, but Clinton was more vocal so Trump's election is likely better for pharmaceutical companies.

  • PBMs are under the microscope for their prominent role in increasing prescription drug costs. Trump's election is probably better for them. Wall Street seemed to think so with Express Scripts and CVS Health stocks going up over 7% and 4%, respectively, the day after the election.

  • Trump says he will completely repeal the Affordable Care Act (Obamacare). That will be tricky since 20 million people are enrolled and both parties like that patients with pre-existing conditions can't be denied coverage and young adults can stay on their parent's plan until age 26. No doubt there will be some changes to Obamacare (for one the nickname will be changed. "Trumpcare" is not quite as catchy.). Look for a mixed bag for health plans which will be given more of a private market approach to coverage, but will still struggle with attracting a risk pool that makes economic sense.

  • There will be a showdown over specialty drugs and it will involve pharmaceutical manufacturers, PBMs, hospital systems, health plans, and pharmacies. We need to be ready to show the value (economically and health outcomes) of using community pharmacies versus mail order.

  • Small business owners were one of the groups that helped lead Trump to victory. There is an opportunity for them (i.e., independent pharmacies) to get relief from the excessive administrative hassles that are suffocating small business owners.

  • Trump may be more receptive to small business than past administrations. Who he surrounds himself will be key. The past two presidents—W. Bush and Obama—have talked about the importance of small businesses, but, relative to community pharmacy, consistently favored big business.

  • If Trump is helpful to small business, there will still be an expectation to compete in the marketplace. Independent pharmacies will need PSAOs representing them at the contracting table with health systems, PBMs, and self-insured plans. Pharmacies that deliver enhanced services of value to payers and patients will be the most successful.

The Senate did not flip Democratic as predicted, and the House remained in GOP control. Few changes are expected in Senate leadership but there will be a change in the House Energy and Commerce chairmanship. Rep. Fred Upton (R-Mich.) is term-limited as chairman. E&C health subcommittee chairman, Rep. Joe Pitts (R-Pa.), is retiring from Congress. It's not known yet who will be taking their places. Many pharmacy-related bills go through this important committee.

(ICYMI, please read the NCPA Government Affairs Department's analysis of the election, which was in yesterday's eNews.)

NCPA's advocacy action is partisan only in that it seeks to build relationships with members of Congress—Republicans or Democrats—who support of independent pharmacies and the patients they serve. The heart of NCPA's advocacy strength is in the membership. Put next April 26-27 on your calendar. That's the date for NCPA's Congressional Pharmacy Fly-In. Whether you were elated or sad about the election results, you will want to make sure you are off the sidelines and making sure your voice is heard by new and incumbent decision makers.

Best,
Doug Hoey