An Update on the Federal and State Legislative Picture

San Francisco—“Of the many pieces of legislation and regulation being considered in Washington and on the state level, the Patient Protection and Affordable Care Act (ACA) is the most important,” said Thomas R. Bizzaro, RPh, vice president, health policy and industry relations, First Databank, Inc.

Mr. Bizzaro made his comments during a Contemporary Issues session at the AMCP meeting. The session, Federal and State Legislative Updates, focused on the legislative climate on the federal and state level, and ways upcoming developments in Washington and in state houses across the United States will affect the interests of AMCP members and other stakeholders. “The climate in Washington,” said Mr. Bizzaro, “is partisan and gridlocked.” As well, the presidential election campaign between President Barack Obama and the presumptive Republican candidate, former Massachusetts Governor Mitt Romney, will affect the decisions and moves made by the current administration.

The bulk of the ACA, enacted by Congress in 2010, is scheduled to be implemented in 2014, but Republicans in Congress, as well as several state houses, have encouraged challenges to the constitutionality of 2 main provisions of the act—the individual mandate and the expansion of Medicaid—in federal courts. As a result, the Supreme Court recently heard arguments for and against the act and will issue its ruling in June. Those who are against the individual mandate contend that Congress cannot cite the Commerce Clause (Article 1, Section 3, Clause 3) to compel individual interstate commerce. Advocates say the mandate itself is within Congress’ authority and, because the mandate has been characterized as a tax by the authors of the act, it is constitutional on those grounds as well.

If the entire act is found to be constitutional by the court (which is strictly divided by ideology and is often characterized by 5-4 decisions), the implementation of the act will continue as planned. If the entire act is unconstitutional, it will be struck down, leaving chaos in its wake. The severability of the measure—a determination of whether some provisions can be declared constitutional while some may not—will also influence how, and if, the ACA will be implemented.

Other federal issues of interest to AMCP stakeholders include the expansion of Medicaid in the ACA, the reauthorization of the Prescription Drug User Free Act (PDUFA), the Medication Therapy Management Benefits Act (S 274/HR 891), Part D drug price negotiations, a possible increase in funding for the FDA, and the issue of drug importation.

Kathryn Jonsrud, RPh, senior director of benefit and product services for Express Scripts, delivered a state legislative update at the presentation. As in Washington, the issues affecting legislation on the state level are influenced by the election year as well as by the partisan fighting in the vast majority of state legislatures across the United States.

Some of the most important issues affecting AMCP stakeholders in state legislatures concern legislation that affects formulary and managed care benefits. “Oral Chemotherapy Parity” legislation, active in approximately 15 states, may establish government mandates that determine the structure of formulary tiers, the extent of benefits provided, or the way benefits are administered. Under present reimbursement rules, oral therapies are treated as drug benefits, while intravenous infusion therapies are treated as medical/hospital benefits. Both are expensive for patients and insurers; under the chemotherapy parity laws, both have to be covered and reimbursed equally by insurers.

Other issues in state legislatures that are important to AMCP stakeholders include Medicaid expansion and the creation of health insurance exchanges (pending the Supreme Court decision on the ACA) as well as possible new regulations of mail-order pharmacies, pharmacy benefit manager (PBM) regulations, uniform prior authorizations, establishment of drug registries, and medication disposal programs.