Scott Guerin, PhD – Senior Director, Government Policy Systems & Analytics
March 6, 2017

After attempting to repeal the Affordable Care Act more than 60 times in the last 5 years, Republican lawmakers have a chance to dismantle the current health care law. Last month, the House and Senate passed a bill that could be used to cut funds to key parts of the legislation. However, Republicans remain divided over how fast to move on repealing Obamacare without having a viable replacement plan ready to implement. Approximately 30 million people have health insurance as a result of the law, and to discontinue their coverage with no alternatives poses a political problem. One Republican alternative plan, called the Empowering Patients First Act, was developed by Dr. Tom Price, head of the Department of Health and Human Services. It offers an outline of what Trumpcare would look like, but did not include details on how it would operate.

Last week Republicans submitted some additional details that aligned with initial proposals. In general, the new plan relies on age-adjusted tax credits, health savings accounts, high-deductible plans, taxing employer-sponsored plans, and block-granting state Medicaid plans, all to increase patients’ “skin-in-the-game” and reduce overall costs.

In his first joint address to Congress, President Trump expressed his hope that lawmakers will help implement health care reform that will expand insurance access, lower costs, and provide better care; however, no new details were offered on how this could be accomplished. In reality, the only two things that are clear at this point are: 1) no one knows what health care will look like in the US anytime soon; and 2) the path to develop the end result will be contentious, emotionally charged, and politically motivated. Otherwise, business as usual in American politics.

What This Means for Pharma

  1. One obvious impact is the possible loss of millions of covered lives receiving prescription drugs through health care, meaning fewer customers and less revenue.
  2. Typically, plans designed around health savings accounts with high deductibles increase patients’ out-of-pocket costs, forcing intense scrutiny on the selection of branded drugs vs generics, in addition to increasing emphasis on nonpharmaceutical options. This clearly places patients in the driver’s seat regarding pharmaceutical options.
  3. Another disconcerting intention stated by the new administration is the focus on reducing the costs of high-priced drugs with statements from our President that drug companies have been “getting away with murder.”

Possibly the biggest consideration for pharma is that patients, now more than ever, will have a say in what prescriptions they purchase. This significantly increases the importance of patient education, promotion, and patient’s perception of their illnesses and the value of treatments.

Leave a Comment