THE BUSH STYLE

February 19, 2001

An early assessment of what the new Administration will mean for health care and for pharmacy

 

COVER STORY

THE BUSH STYLE

An early assessment of what the new Administration will mean for health care and for pharmacy

When George W. Bush finds the time to sneak away from the White House and play golf, he'll think about pharmacy. Guaranteed, birdie, par, or bogey. How can pharmacy make that claim? Thank James T. Doluisio, Ph.D., former dean of the University of Texas School of Pharmacy. He made a set of golf clubs for the then Texas governor. "It's a hobby of mine," explained Doluisio, who presented Bush with a set after he raved about his shots with Doluisio-produced clubs borrowed mid-round from the UT chancellor.

Now, whether Bush will associate pharmacy issues with the clubs is another matter. Looking for clues based on his six-year record as Republican governor and his long march through Florida and the Supreme Court to 1600 Pennsylvania Ave. provides few signposts. "There haven't been a whole lot of issues where we had to go to the governor's office and lobby," recalled David A. Gonzalez, R.Ph., senior director of public affairs for the Texas Pharmacy Association and formerly a v.p. at Legend Pharmacies.

There was a patient bill of rights that Bush initially vetoed and later let become law without his signature, but the any-willing-provider, patient choices, and formulary protections pharmacy sought weren't included. There was a lengthy legislative, regulatory, and legal battle over narrow therapeutic index (NTI) drugs similar to the one the brands and generics have fought in other states. The legislation Bush signed would have made it more difficult to substitute NTI drugs and directed the state pharmacy board to come up with a list of those that should be covered. The board decided NTIs were not a problem and didn't produce a list.

A law that took effect Jan. 1 requires certification of all pharmacy technicians and mandates registration and continuing education for them. Texas also was one of the first states to enact universal benefit card format requirements. Neither was very controversial. "The governor's office in Texas ... is not that involved in policy," Gonzalez said. "The power belongs to the legislature, the lieutenant governor, and the speaker of the house." With an absence of big issues, organized pharmacy didn't have any problems with Bush in his term and a half. As for any changes that might be expected because of his move North, Gonzalez said that looking at his record in Austin, "things happen based on the people he chooses to lead [agencies]. I don't expect him to be real deep on policy."

Makings of a new team

The same cannot be said about Tommy Thompson, the nation's longest-serving governor before Bush nominated him for secretary of Health & Human Services. As Wisconsin's chief executive for 14 years, Thompson forged an innovative record in many areas and dealt with pharmacy matters that didn't come up in the Lone Star State. He started paying community pharmacists for a variety of event-based pharmaceutical care services under Medicaid.

The system represents "a significant step toward establishing an equitable payment for [pharmacist] services," said Christopher Decker, executive director of the Pharmacy Society of Wisconsin, who worked closely with Thompson and his staff on the project. Although the payment system has been around for several years in a paper-based form, it made a major leap last September when a point-of-sale element was implemented allowing on-line, real-time claims adjudication usually in about 30 seconds. Nearly 30 pharmacy services can be reimbursed for amounts up to $40, including in-home medication management. Decker said the most frequently billed service involved compliance.

Several Wisconsin health maintenance organizations followed Medicaid's lead and have begun paying pharmacists for some cognitive services—the kind of snowball effect pharmacists are hoping for if pharmacist services are covered in a Medicare drug benefit. But Decker, who described Thompson as a "tireless worker," also recalled that his administration tried to reduce the Medicaid drug reimbursement several times from AWP (average wholesale price) minus 10% to AWP minus 15% or more.

Thompson won national recognition by ending cash payments to able-bodied welfare recipients and offering them job placement and other support services to help them find work. He often fought the Health Care Financing Administration, part of the department he now leads, for more flexibility and funding for his state under Medicaid, the State Children's Health Insurance Program, and BadgerCare, a state health-care program for the working poor. "He's been willing to try new things," observed Craig Fuller, CEO of the National Association of Chain Drug Stores, who said he's known Thompson for several years. "He'll bring a creative team with him to the department and be given the opportunity to continue to innovate when it comes to these health-care programs." Also under Thompson in Wisconsin, a law was enacted that allows pharmacists to administer adult immunizations and another to penalize "dumpster-diving"—stealing personally identifiable medical or financial information from a trashcan.

In addition to Thompson, another key figure in formulating health-care policy—especially a Medicare drug benefit Bush promised on the campaign trail—will be Mitchell Daniels as the director of the White House Office of Management & Budget. Daniels has more than a decade of top management service at Eli Lilly & Co., leaving as senior v.p. for corporate strategy and policy. He's a familiar and respected figure in Washington, with Capitol Hill legislative and campaign experience and two years as Ronald Reagan's chief political director in the White House. At Lilly, he worked on getting the Federal Trade Commission to approve the Indiana manufac-turer's purchase of PCS and other lobbying efforts. At his Senate confirmation hearings he said he would divest all his Lilly holdings and recuse himself from matters directly and specifically affecting Lilly, where former President George H. W. Bush once served on the board of directors. But Daniels added that he would not remove himself from "matters of policy, budgeting, or regulation affecting the pharmaceutical or health-care sectors generally." (Bush also appointed another former high-level drug company executive, Donald Rumsfeld, as Secretary of Defense. He was a CEO of G.D. Searle.)

The task of filling other posts with a direct impact on pharmacy practice was far from complete as this magazine went to press. In a surprise to many Washington observers, the Bush Administration accepted the pro-forma resignation of low-profile Food & Drug Administration head Jane E. Henney, M.D. At one of Thompson's confirmation hearings, Sen. Barbara Mikulski (D, Md.) suggested that Henney's decision to approve Mifeprex (mifepristone, Danco), the abortion drug better known as RU-486, led to her dismissal. Sen. Edward M. Kennedy (D, Mass.), who was instrumental in Henney's nomination in 1998, warned that it would be "a long period of time to find a replacement" to head the FDA. That certainly was the case before Henney. Michael Friedman served as interim commissioner for almost two years after David Kessler resigned and Henney was appointed. Her deputy, Bernard Schwetz, Ph.D., will serve as acting commissioner and continue her efforts to build up the agency's scientific base.

At his confirmation hearing, Thompson, who like Bush has a strong anti-abortion record, did not respond directly to the Henney situation and any connection to RU-486. Later, when Sen. Hillary R. Clinton (D, N.Y.) asked whether the Bush Administration intended to overturn the approval of RU-486, Thompson said he would not unless it was proven unsafe.

Regulation and legislation

While not necessarily indicating a governmentwide regulatory rollback was coming, the Administration's first official act was to put dozens of rules promulgated in the final days of the Clinton Administration on hold. The swearing-in ceremony was barely over on the steps of the Capitol Jan. 20, when Bush's chief of staff, Andrew H. Card Jr., issued a memorandum temporarily postponing for 60 days the effective date of any regulation issued by the Clinton Administration that had not yet taken effect. Final rules cleared by departments but still awaiting publication in the Federal Register before becoming official were withdrawn for review by the new team.

Of immediate interest to R.Ph.s servicing hospices was a final rule from the Drug Enforcement Administration that clearly permits facsimile transmissions of prescriptions for Schedule II narcotics. It had a Feb. 12 effective date. But since the practice had been approved under an identical interim rule, there should be no impact. Similarly, a final rule on Medicare paying for diabetes self-management training also will be delayed, but R.Ph.s were largely excluded.

"It seems to me that we have a greater opportunity now with the new Administration to more realistically look at laws and regulations and ask, Do they work; could they work better, or should we be rid of them?" commented Ron Streck, president of the Healthcare Distribution Management Association (formerly the National Wholesale Druggists' Association). Fuller, at NACDS, would like the medical-record privacy regulations issued in late December reexamined, especially in the area of patient consent. "We want information to be used in a way to improve patient outcomes and not foreclose the possibility of our retailers [using it] to protect patients from adverse drug interactions and to make sure they're utilizing their medications properly," he said.

But changing already-issued regulations requires legislation or lawsuits, and the legislative crystal ball is as murky as it has ever been. Blame the numbers: 50-50, the party split in the Senate with Vice President Dick Cheney eligible to cast tie-breaking votes; five, the number of seats the Republicans hold over the Democrats in the House; five to four, the Supreme Court vote that awarded Florida's 25 electoral votes to Bush; 271-266, the final tally in the Electoral College; and 500,000 plus, Al Gore's margin over Bush in the popular vote. How Democrats and Republicans will balance these numbers is one of the capital's biggest unknowns.

"We're in for a ride," commented Susan Winckler, director of policy and advocacy for the American Pharmaceutical Association. Along the way, she hopes the ride includes payment for pharmacist services in any Medicare drug benefit and a focus on administrative simplification to make it less burdensome for R.Ph.s to do their real jobs. She's been encouraged by early talks with the Administration and lawmakers. "There's an increasing recognition that we have a problem not only with medication errors, but medication use in general," she said. "If we just pay for the drugs, then the Medicare benefit really isn't a benefit, and you won't save money in the long run, and you might actually cause problems."

The Medicare Rx benefit that Bush sketched during the campaign was in two parts and didn't get down to the level of detail to mention pharmacist services. His plan is to proffer "an immediate helping hand" in the form of a temporary state-based Rx benefit for the low-income elderly. That would be followed by permanent Rx coverage for all beneficiaries as part of a comprehensive overhaul of the entire 36-year-old Medicare program. The interim approach is similar to the SenioRx Gold idea advanced by NACDS and endorsed by APhA and the American Society of Consultant Pharmacists. But Sen. William Roth (R, Del.), the Senate's primary proponent of a stopgap benefit supported by $48 billion in federal funds for states to establish or expand programs, was defeated for reelection.

"I wouldn't expect this state-based idea is going to go very far," observed John Rector, a senior v.p. at the National Community Pharmacists Association, which opposes the plan. Even Bush's closest Democratic confidante in the Senate, John Breaux of Louisiana, cast doubt on the concept, calling it "ill-advised and ill-conceived."

Rector, who like many veteran lobbyists is hard-pressed to predict what Congress and Bush may agree on, figures taxes is the most likely item. One of NCPA's immediate priorities would fit into tax and Medicare legislation. The independents would like to restore first-dollar deductibility for Rxs, over-the-counter medicines, and related pharmacists' professional services under the federal tax code without regard to the current 7.5% adjusted gross income threshold. Copayments, deductibles, and insurance premiums also would be deductible, and there would be a refundable benefit for those without enough tax liability.

Another priority for NCPA is to try again to get an antitrust exemption so R.Ph.s could negotiate with managed care entities. That exemption overwhelmingly passed the House last year but was never considered in the Senate. Its chief GOP sponsor in the House, Rep. Tom Campbell (R, Calif.), was defeated in a Senate bid. NCPA also wants to see the drug-reimportation law that was passed last year then shelved by the Clinton Administration implemented. Former HHS secretary Donna Shalala used a Congressional escape hatch provided in the law and said it had "serious flaws and loopholes" that undermine potential cost savings "and could pose unnecessary public health risks." As a result, she said she wouldn't request $23 million that was conditionally appropriated for implementation. Rector dismissed Shalala's actions as "insignificant" even in the short term. Although Bush endorsed the concept of reimportation during the third Presidential debate, his Administration has given no sign yet whether it will reverse Shalala or let Congress work on changes she suggested.

Bush bio

Our first M.B.A. president (Harvard, 1975), the 54-year-old Bush was in the oil and gas business in his native Midland, Texas, before becoming a senior campaign adviser in his father's successful run for the White House in 1988. He then was managing general partner of the Texas Rangers Baseball Organization and ran for governor in 1994. Bush is a delegator. That was his way of governing in Austin, and, so far, he has shown no sign of changing it for Washington, D.C. From all accounts, he picks people based on talent, loyalty, and discretion. He expects them to perform and holds them accountable if they don't.

NACDS' Fuller, who was chief of staff to the new President's father when he was Vice President, has known the son since 1985. "I think [George W.] has grown a lot and matured a lot over the last decade or so," Fuller said. "When he came [to Washington, D.C.], he was really high energy but not a lot of experience. In a remarkably short period of time, he ... became more intensely involved in public policy." His golf club maker, Doluisio, described Bush as "extremely personable, very engaging," and someone who "values personal relationships and relies" on them. John Carson, NCPA president who has several pharmacies in San Antonio, called Bush a negotiator who in Texas tried "to bring Democrats and Republicans together for the public good." Carson also noted "his philosophy leans toward managed care."

That also describes the health-care philosophy of the first President Bush, who pharmacists better remember for the surprise of OBRA '90, the Omnibus Budget Reconciliation Act of 1990, and its sweeping impact on community pharmacists, manufacturers, and state governments. It required brand-name and generic drugmakers to give Medicaid "best price" rebates. Pharmacists were told they must offer to counsel Medicaid patients about their medicines. The law also ordered states not to lower pharmacy reimbursement levels for five years. While it may be too early to tell whether anything so far-reaching is planned by the son, remember his father was famous for saying, "Stay tuned."

Michael F. Conlan

Helping hand proffered but may be brushed off

George W. Bush's "immediate helping hand" may be getting a cold shoulder on Capitol Hill, but some pharmacy groups believe it is a step in the right direction. At the start of his second week in office, Bush kept a campaign promise by sending to Congress a proposal for a temporary state-based drug benefit for some low-income elderly. He sees it as a stop-gap measure—four years and $48 billion maximum—while his Administration and Congress examine the trickier anatomy of a head-to-toe overhaul of Medicare, including the addition of permanent prescription drug coverage for all beneficiaries.

"Providing low-income seniors with coverage for needed prescription medications is a good start, but just part of a long process," said Craig L. Fuller, CEO of the National Association Chain Drug Stores. "We will work with the Bush Administration and Congress in support of a federally funded state-based approach that includes important provisions related to pharmacy services so critical to the nation's seniors."

The Administration's initiative is very similar to SenioRxGold, a plan devised by NACDS and formally endorsed by the American Pharmaceutical Association, the American Society of Consultant Pharmacists, and the National Consumers League. Rep. Michael Bilirakis (R, Fla.) introduced a version last year, but it attracted little support and never moved beyond the hearing stage.

Opposition was diverse: It came from most Democrats, many senior Republicans, the Pharmaceutical Research & Manufacturers of America, and the National Governors Association. The cast is largely the same this year, except for some kind words from Republican governors such as Tom Ridge of Pennsylvania, one of the nearly two dozen states that have an aid program for the elderly in place that could be expanded with an infusion of federal cash. But one of the knocks against the Bush transitional approach is that it would take many states years to get a plan going from scratch and Congress just as long to enact total reform with universal coverage as it is to pass a temporary, means-tested benefit.

"Members of the House and Senate would like to go beyond the President's proposal," said Rep. Bill Thomas (R, Calif.), chairman of the Ways & Means Committee. Sen. Charles Grassley (R, Iowa), his counterpart at the Finance Committee, said the proposal appears to have little chance of passage, but "keeps the heat on Congress to do something." Rep. Pete Stark (D, Calif.) said the proposal would leave millions of the sickest Americans uncovered and "should be buried, quickly and deeply, as a bad idea." Bush seemed to acknowledge those criticisms when he told reporters, "Well, if, in fact, what they're saying is that they plan on expediting a Medicare reform that will include prescription drugs for all seniors, then all of a sudden, I begin to say, well, gosh, that may make sense that you look at our proposal the way they do."

As outlined, his proposal would offer complete Rx coverage for individuals 65 and up with incomes below 135% of the federal poverty level, or $11,600 for an individual and $15,700 for a couple. There would be sliding-scale coverage for those with incomes up to $15,000 and $20,300, respectively. The government would pay all out-of-pocket Rx costs above $6,000 a year. States, which would not have to put up any money, could hire pharmacy benefit managers (PBMs) to run their programs, institute formularies, and provide incentives to promote the use of generics. Other details will have to wait until the introduction of specific legislation.

 

Mike Conlan. THE BUSH STYLE. Drug Topics 2001;4:31.