Reshaping pharmacy amid a healthcare crisis

Q&A with Steve Anderson, president and CEO of the National Association of Chain Drug Stores

Since taking the reins at the National Association of Chain Drug Stores four years ago, Steve Anderson has reshaped the organization and led an aggressive — and quite successful — campaign to raise pharmacy’s profile and give it a bigger stake in reshaping the overwrought healthcare system. Under his leadership, NACDS has crafted a powerful message for policymakers and budget planners struggling with a healthcare funding crisis — that pharmacy, when properly reimbursed and fully engaged, can lower health spending and help solve the nation’s budget crisis.

The budget crunch and pharmacy’s ability to help provide solutions to a fractured healthcare system are sure to be dominant themes at the NACDS Annual Meeting in Scottsdale, Ariz. As he prepared for the event, Anderson spoke at length with Drug Store News about the issues he’ll address at the conference, the organization’s current priorities and his outlook for 2011.

Drug Store News: Can you bring us up to date on the reorganization of NACDS, and what it’s meant to its operations and goals?

Steve Anderson: We did a pretty significant restructuring when I came in four years ago. We launched the new marketing, communications and media relations team that has vastly improved our public relations and media outreach. That really has put us on the map, both inside the Beltway and in terms of spreading our messages on healthcare reform. And with medication adherence and [medication therapy management], we’re getting some fabulous national press.
We also consolidated two divisions and created a new government affairs/public policy department that has been very successful in achieving some public policy victories.

And we did some ‘smart sizing’ over the last several years, through a member value survey where we asked our members what priorities they wanted us to address. We decided to focus on about 15 major activities, as opposed to the 42 we were doing. Some of those were of questionable value — not that they weren’t beneficial programs and activities, but other organizations were doing that. What we have attempted to do is put our emphasis on government affairs, communications and meetings.

DSN: Even 15 major priorities sounds like an ambitious agenda.

Anderson: We’re constantly looking for ways to make sure we’re serving the members better. So we’re continuing to be very proactive, as we have been the last several years, and not reactive, as we had done in previous years. Obviously the top priority falls in the area of government affairs. Part of that is focusing on regulatory, legislative and legal issues. The [average manufacturer price] victory [in which the federal government agreed to a more realistic definition of generic drugs’ AMP for pharmacy reimbursement purposes] is a great example. And we’re doing a lot more work on state relations issues, primarily because of the budget situation in the states.

Not only are we being proactive on offense, occasionally we [also] have to be on defense to protect the gains we have achieved in the healthcare-reform law and elsewhere. [We also are making] sure our patients have access to medications, both through federal and state policies. Those programs have come under attack as the recession has ... had an impact on federal and state treasuries. And that’s having an impact on health care and patient access, which is a big issue for NACDS.

DSN: The crisis in the states has to be one of the most worrisome challenges out there.

Anderson: It appears, based on information from the Center on Budget and Policy Priorities, that the deficit in 2011 at the state level is $130 billion and is projected to be approximately $112 billion in 2012.

We have been successful in working through the [enhanced federal medical assistance percentage, or FMAP] program, which has brought federal dollars into the states. And because of that work, about $92 billion will have gone to the states from 2009 through June 30 of this year. But unfortunately, due to the financial situation at the federal level, it appears FMAP will not be extended. And that will have an even tougher impact on the states.

[Editor’s Note: Congress and the White House agreed last August to extend the FMAP program through June, throwing state Medicaid programs another lifeline as Americans continue to struggle with job losses and health costs.]

DSN: The federal and state budget crisis will be on everyone’s mind at the Annual Meeting. How else is NACDS crafting its message to policymakers as they cope with the funding shortfall?

Anderson: We’re attempting once again to be proactive. This year, we have focused on the issue of medication adherence. There are two pieces of legislation introduced in the House and Senate on medication therapy management, and we’re attempting to convey to lawmakers in Congress, and in the states, that pharmacy can be the solution as opposed to the problem.

I’ve said many times, I understand that reimbursement is the lifeblood of this industry. But at the same time, we need to talk to lawmakers about the positive message we have on MTM and adherence. We’ve got statistics that show that for every $1 spent on MTM, you can drive $14 out of the healthcare delivery system.

DSN: That’s a powerful message.

Anderson: Those are real savings. So even though we were successful in getting some major provisions into the health-reform bill, like a different definition of AMP, the law also provided us a vehicle to communicate the value of pharmacy in the healthcare delivery system as the face of neighborhood health care.

We’ve got a lot of work ahead of us enacting MTM bills, but just the fact that they have been introduced gives us a vehicle, once again, to talk about the value of pharmacy in helping to reduce long-term healthcare costs.

DSN: The health-reform law has, at a minimum, given MTM a higher profile, but a year after passage, its implementation and impact are still big question marks — particularly with the [Republican party’s] push to repeal some or all of its provisions. What impact, good or bad, do you think it’s had thus far on chain pharmacy?

Anderson: The government is taking a multipronged approach to health reform. The regulatory side is moving ahead. Dr. [Donald] Berwick is now the head of [the Centers for Medicare and Medcaid Services]. Our board ... has had an excellent meeting with him. He is a very bright person and seems to grasp our issues and our message that pharmacy is part of the solution to some longer-term healthcare issues.

So CMS is going ahead with implementation. They’re writing the rules, and we expect to see some of them — for instance, on AMP — in the immediate future. We’ve got a proposal out there on accountable-care organizations and the issue of the medical home, which is very important to pharmacy. So that is continuing.

On the legal side ... we’ve got six federal courts of appeals reviewing legal challenges to the law and several other challenges still pending. Four of those appeals courts are expected to issue substantive decisions on its constitutionality. And two are focusing on whether plaintiffs even have the right to sue.

Ultimately, this will go to the U.S. Supreme Court ... probably right in the middle of the presidential and congressional elections in 2012. And if the court comes down with a decision, health reform will obviously again become a very important political issue in that election.

On the legislative side, Republicans ran in the mid-term elections last November on repeal. They may not have the opportunity to repeal it completely, ... but they have the power of the purse, particularly on the House side, and can begin to start de-funding some aspects of reform.

DSN: Given all the legislative and policy challenges, has NACDS shifted more people recently into federal or state government affairs?

Anderson: Absolutely. Part of the restructuring was to put more boots on the ground, both on Capitol Hill and in the states. We dramatically increased our state relations [staff], almost doubling it, because we saw that as a high priority. It goes back to the restructuring; it allowed us to free up money for areas we needed to focus on immediately to deal with crisis situations.

DSN: Will NACDS continue to promote its message of pharmacy as ‘the face of neighborhood health care?’

Anderson: We are, and this year we’re expanding a paid media campaign. When I came in four years ago, ... we did focus groups on Capitol Hill. It was shocking that many people on the Hill didn’t view pharmacy as part of the healthcare delivery system. I think that has changed dramatically.

So we’re continuing to expand on that message, and it resonates extremely well with lawmakers because we are wrapping our message around medication adherence and MTM. And lawmakers talk about little else but cutting spending, and they appreciate the paradigm shift because we are positioning ourselves to actually reduce healthcare costs. It’s a very powerful message on both sides of the aisle and both sides of the Capitol.

We’re getting that message out through print ads and through radio spots on top stations here in Washington, D.C. We’ve had great stories on pharmacy in The Wall Street Journal, The New York Times ... and in The Washington Post, which had a great story a couple of weeks ago on medication adherence.

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