I learned the word telenovela—which means soap opera in Spanish—in February when I aspired to passively learn Spanish while being entertained by bad acting. I immersed myself in a show called “La Patrona” about an outspoken woman working in a mine and all the preposterous abuses and scandals by the powers that be. Little did I know that the U.S. presidential election would come to have so much in common with a low budget drama about romance and power in a Mexican village. From the FBI’s 11th hour disclosures on the one hand to flagrant sexual assault boasts and possible Russian influence on the other, two of the least liked candidates in the country’s history are vying for the presidency.
What could possibly go wrong?
As the days wind down before the cliffhanger finale to a tortuous campaign season, the issues that molded the primaries—healthcare, immigration, environment and economy, to name a few—have been kicked to the curb in favor of an existential “Is this candidate too immoral to be president?” debate. It’s no wonder so many voters are too overwhelmed to participate this year.
But however dramatic the election, one of the two is bound for the oval office, and who that is as well as the senate and house majorities will influence healthcare policies. I asked a few of HIRC’s research directors what they foresee for healthcare in a Clinton and Democrat landslide, versus Trump and Republican victory.
“If Trump was elected, I’d expect the repeal of the ACA,” said Josh Mader, head of the Best People Best Practices and Managed Care services. “The exchanges would be defunded, and there would be a scaling back of Medicaid expansion. The three things republicans spout as a fix for healthcare – block funding for Medicaid with no strings attached, allowing large insurers to sell across state lines as one entity regulated in one state only, and more HSA growth – would replace Obamacare, but none of them would have a substantial impact on the overall cost of healthcare.”
Clinton's Pinksheet
But none of this would impact the cost of pharmaceuticals, and even a Clinton win would have little if any immediate impact, according to Mader, despite Clinton’s proposal to reduce the cost of pharmaceuticals through price increase caps.
“Clinton is trying to get bipartisan support against raising price on existing drugs,” Mader said. “It’s really hard to defend large increases on existing drugs, compared to defending the value of innovation. If Clinton gets elected and there is a senate majority for the Democrats, we might see the price increases by manufacturers of existing drugs held to under 10% for 2017.”
However, Mader pointed out that it may not mean the overall price paid to manufacturers by payers would be reduced by 10%.
“What’s not clear is whether that’s list or list-to-net,” he said, adding that rebates make the list price somewhat irrelevant, since they often are far more than 10% off list price in the first place.
State Propositions
If the saga in the presidential race is irrelevant to drug pricing, then the outcome should be less concerning to pharmaceutical industry players than the outcome of state initiatives such as California’s Proposition 61, the California Drug Price Relief Act. This is especially true for specialty manufacturers.
“PBMs are exerting more and more pressure on specialty manufacturers through excluded formularies," said Danielle Snook, HIRC’s specialty channel research director. "In addition to that pressure and to any new pressures on the industry due to national election results, Proposition 61 could have an impact on Medicaid drug spending in California that--if successful--other states might mimic.”
In fact some states—Ohio, Florida, and Illinois—already have similar measures on their ballots and all of this momentum could lead to drug price transparency that would create new layers of uncertainty for manufacturers.
The Future of Alternative Payment Models in a Trump World
And as for the fate of healthcare at large as the finale of the national election saga approaches, Snook said that with CMS generally leading the charge toward value-based care due to the ACA, the industry-wide trend away from fee-for-service could see a regress if the legislation is repealed.
“The push in recent years away from fee-for-service and towards value-based reimbursement, which largely started with CMS but has been adopted by private payers as well, was brought forth by stipulations in the ACA,” Snook said.
Should the ACA be overturned, Snook said, larger numbers of patients could be uninsured, which would make providers taking on risk under alternative payment models, well, more risky.
Despite the telenovela we have all been subject to and the polarization of the two candidates’ supporters, there are actually a few things they do agree on, according to Kaiser Family Foundation: allowing importation of drugs for personal use from “safe” countries, increasing access to opioid treatment and insurance coverage for addiction, and price transparency from healthcare providers.
Whether either of them will have the opportunity, support and grit to see any of these changes through is the season’s cliffhanger. Hold on to your seats. It’s going to be a doozy.
