The most salient feature of the Medicare prescription drug benefit is its uncertainties. That was perhaps the key insight at a roundtable conducted by Pharmaceutical Executive in conjunction with the executive summit "Medicare Part D: Can There Be Alignment Between Government Goals and Industry Opportunity?" cosponsored by this magazine and Model N, a revenue management-solution provider. With a panel that included representatives from pharma, the legal community, prescription benefit managers, and data and service providers, the roundtable looked at the goals of Part D, the threats and opportunities it presents to stakeholders, the skills companies need to develop, and the way the playing field is likely to change over the next few years. What follows is an edited version of the conversation.
PARTRICK CLINTON, editor-in-chief, Pharmaceutical Executive: What do you think the government is trying to accomplish with Part D?
JOSEPH METRO, partner, Reed Smith: You have a number of issues. There was a big hole in the social safety net that had the tendency to raise its head as a political issue, and the government was looking to try to fill it. But as we get into implementation, a couple of different things pop up. First, the government is trying to get a better understanding of the pharma sector and how it coordinates with other medical services covered under Medicare. And it is trying to increase the transparency and efficiency of drug pricing.
CHRISTOPHER ZANT, senior executive, Accenture: Moving forward, Part D becomes an experiment in public-private partnership. Can we go at this in a private manner, influenced by public policy, driven by government intent, but supported through commercial means without strict price controls or legislative mandates? "
PART D could become a threat for pharma, if the industry doesn't step up and make it succeed, argues Accenture's Christopher Zant (left). Right: Linda Schock and Doug Long.
DOUG LONG senior vice president, IMS Health: I think you have to look at the near term and the longer term. The near term is between now and the 2008 presidential election, and the emphasis is to get as many people enrolled as possible. The dilemma is that nobody knows how successful that is going to be. People have been pleasantly surprised that the plan premiums are lower than expected. So we could be off to a promising start. But at some point that government is going to come knocking on the door. When the program is too expensive, they will look at one place—pharmaceutical companies.
Compliance is a key public health issue. But a free-standing drug plan doesn't have much incentive to push for it, says Medco's Peter Sherman (left). Right: Joel Winterton.
METRO: The way Medicare has evolved, and Medicaid as well, the concern swings between health policy and budget policy. For the last ten years at least, budget has been far and away the bigger driver of the two, and it will continue to be for the foreseeable future. That's the long-term challenge.
LINDA SCHOCK, associate director, distribution and reimbursement, Actelion Pharmaceuticals: I agree that access is incredibly important right now in Part D, but the bigger challenge is making sure that everything works: the infrastructure, the systems, getting government to understand pharmacies and the nuances of how they operate.
We were very fortunate to be a part of MRDD, the Medicare Replacement Drug demo project that started last year. It's been an interesting road getting patients to understand the demo. The biggest take-away that I got from the experience is that customers are very confused with regard to the mechanics: What form do I need to complete? Where do I need to go? Why do I need to pay this?
Pharmac will lead to more operational complexity for pharma, and maybe for all stakeholders, says Stephen Zocchi of Model N right, Left and center: Linda Schock and Doug Long.