Health Reform: How is Pharma Affected?

Reforming the health care industry is an increasingly complex challenge due to multiple layers of legislation already in place and the number of different stakeholders in the industry. When approaching reform, both federal and state governments have proposed legislation that would take steps toward a better health care system. Additionally, some pharmaceutical manufacturers have reformed their side of the industry by moving towards increased pricing transparency.
A new report published by The PwC Health Research Institute and the firm’s strategy practice Strategy& examines the potential impact of 3 scenarios: repealing, replacing, or repairing the Affordable Care Act (ACA), and how this would affect patients, providers, payers, and pharmaceutical and life sciences companies.
In an interview with Specialty Pharmacy Times, the report’s authors, Karen Young, US Pharma and Life Sciences leader at PwC, and Karla Anderson, Commercial Pharma and Life Sciences partner at PwC, delve into how pharmaceutical manufacturers may be affected by healthcare reform and how they have already taken initiative to better their industry.
SPT: When approaching health reform, what factors should be considered?
Anderson: Access to affordable care for patients is the most important component that needs to be considered in any health reform legislation. We can’t to go backwards and have more people uninsured than prior to ACA.

Young: It depends on whether you are a provider, payer or manufacturer, since the impact will be different. The industry is already assessing many of the various reform scenarios and planning for change in advance of the legislation. In pharma, there is a great deal of focus on drug pricing and whether that will be an area of reform. A few drug manufacturers have begun to proactively share their drug pricing history, including price increases over the past several months.
SPT: Some pharmaceutical companies have been moving towards transparency without legislation. Do you think this trend will continue?
Anderson: There over 20 states with bills being proposed that would require manufacturers to provide drug pricing transparency. As Karen noted, a few companies have taken the initiative to provide greater transparency related to pricing which includes how they establish a price at launch and how that price changes over time. There are an equal number of companies that have come forward with social contracts, such as Allergan and Novo Nordisk as examples, that have made a commitment to limit the level of annual price increases. The difference is that if laws are passed at the state level, it becomes a mandate to report and all pharmaceutical companies have to comply. In general, companies would prefer to voluntarily share their price increases than having it legislated since the mandatory requirement adds administrative burden and cost to the business.
SPT: What are potential avenues lawmakers may take to address healthcare reform?
Anderson: We have categorized the current federal efforts to address ACA into three potential scenarios, repeal, replace or repair. There is also a good deal of activity at the state level which doesn’t always get the same level of press coverage. At the federal level, in either the replace or repair option, the objective must be to provide as many people as possible access to care through the most affordable model. The challenge is there are many different vantage points that need to be considered in a single piece of legislation.

Young: In our paper, we talk about the three scenarios of repeal, replace, and repair. All 3 are not one-size-fits-all across the healthcare continuum, it depends whether you’re a provider, a payer, or a manufacturer. Within each option, there are changes that are more positive for certain segments than others. This is why it’s not an easy answer to solve for, it is not a one-size-fits-all. Different constituents within the health economy has a different objectives they want to achieve for their business - See more at:

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