No matter who is elected as president next week, the Affordable Health Care Act is here to stay, according to Chad Shearer, deputy director of the RWJ Foundation’s State Health Reform Assistance Network at Princeton University’s Woodrow Wilson School of Public & International Affairs.
“If Obama is elected, everything remains the same. If Romney is elected it will be hard for him to follow through on his campaign promise to repeal the act unless the Senate also flips and he has a Republican majority,” says Shearer.
Shearer will speak on challenges and strategies in the healthcare industry in response to the reform laws, including how the Affordable Care Act will change prescription drug pricing, at the next meeting of the Young Healthcare Professionals of New Jersey on Thursday, November 8, at 6 p.m. at the Double Tree Inn, Princeton. Cost: $20. Register online at www.yphprinceton.com.
Shearer worked on Capitol Hill for the Ways and Means Subcommittee on Health, where he oversaw Medicare Managed Care and the prescription drug policy. He has also worked with the Center for Health Care Strategies in Hamilton, serving as deputy director of the Medicaid Leadership Institute, served as legislative director for U.S. Congressman Pete Stark, and was a David A. Winston Health Policy Fellow in 2003 and 2004.
“I never thought I would be doing this type of work. I thought I’d be a corporate lawyer with some firm in Chicago,” says Shearer, who was influenced to become an attorney by his grandfather, a “small town lawyer in Iowa,” where Shearer is from. He graduated from Coe College, Cedar Rapids, Iowa, with a bachelor’s degree in political science in 1999, then received his law degree from the University of Iowa in 2002.
While in law school he learned about the world of healthcare and decided to work toward becoming the CEO of a hospital, but another course opened the door to “the amazing world of healthcare policy. I decided I didn’t want to just influence a few people at a law firm, or a few hundred people by working at a hospital, I wanted to work to influence the direction of healthcare for our country.” He received a Master of health administration from the College of Public Health at Coe College in 2003.
New Markets for Pharma. “Healthcare reform opens huge new markets for the pharmaceutical industry by providing guaranteed insurance coverage to up to 32 million uninsured Americans beginning in 2014,” says Shearer.
These newly insured will be able to afford prescription drugs that they have, in the past, been unable to consider. This means increase sales of existing medications, which will in turn lead to more money for research and development of new drugs as well as a need for increased employment across the industry.
Shearer’s prediction is the opposite of what many people have suggested the Affordable Care Act will mean for the pharmaceutical and biotech industries. A recent article in Forbes Magazine predicted that the industry will be faced with “billions of dollars in price cuts and fees.”
Pharmaceutical companies will still pay rebates to the government for Medicaid drug costs as well as discounts to seniors covered under Medicare Part D drug plan, and many experts are debating whether or not these increased costs will be offset by the increasing number of newly insured who will become eligible for prescription drug assistance.
Under the Affordable Care Act, the industry-fee component was $2.5 billion in 2011 and $2.8 billion in 2012. The fee will steadily rise to $4.1 billion in 2018 and will be $2.9 billion a year thereafter. Each company operating in the US branded pharmaceutical market must pay a portion of these fees based on its market share of the government programs.
Impact on Drug Prices. “There is very little in the Affordable Care Act that will directly impact drug prices,” says Shearer. “Much of the coverage expansion is in Medicaid, so prices for that market will be lower because of historic Medicaid rebate policies.”
Many people, both in the industry as well as consumers, have been concerned about how the new health insurance exchange marketplace will affect prices for drugs as well as for healthcare. “In the new health insurance exchange marketplace, prices will continue to be set by market forces between drug makers, health insurers, pharmaceutical benefit managers, and pharmacies,” says Shearer.
He does not predict a great deal of change in cost in these areas. However, the increased numbers of people who will be able to afford healthcare under the system will cause healthcare providers to develop “new, unique delivery systems for how healthcare is delivered to the patient.”
The effect on New Jersey. Because of the high concentration of healthcare related companies in New Jersey, including both pharmaceutical and bio-pharm companies, the impact of the act will be greater here than in the rest of the country. No matter who is elected as president in the next week, it is safe to assume that the Affordable Healthcare Act “will remain the status quo” for the foreseeable future.
“The impacts of the Affordable Healthcare Act will have no difference on New Jersey than on any other state, except that here in New Jersey it will be felt in spades,” he says.