Once again a fellow named Ryan is shaking up the retail pharmacy business.

Rep. Paul Ryan, retail pharmacy, federal spending, government expenditures, health care, health care reform, Jeffrey Woldt, community pharmacy, health care system, Medicare, Medicaid, private health insurance, prescription drugs, pharmacy reimbursements, pharmacy operators, pharmacy, health care expenditures

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Inside This Issue - Opinion

New climate in Washington will test pharmacy

April 25th, 2011

Once again a fellow named Ryan is shaking up the retail pharmacy business.

With his proposed federal spending plan for fiscal 2012, Rep. Paul Ryan (R., Wis.) has ignited what promises to be a long, intense, divisive debate about government expenditures, tax policy and the rapidly escalating national debt.

Designed to cut some $5.8 trillion in spending over the next decade, the bill, which the Republican-controlled House approved earlier this month, would, if enacted, have profound implications for every segment of American society, including community pharmacy.

Ryan’s blueprint calls for fundamental changes to two of the pillars of the health care system: Medicare and Medicaid. He proposes that, beginning in 2022, the government give Medicare beneficiaries a fixed amount of money to purchase private health insurance instead of paying for coverage directly. In addition, Ryan wants to transform Medicaid into a block grant program for states.

President Obama has responded with his own deficit reduction plan totalling $4.4 billion over 10 years. He, too, wants to limit spending on Medicare and Medicaid, but the smaller reductions sought by the president would be attained by less radical measures, including using the government’s purchasing clout to bring down the cost of prescription drugs.

Either plan would over time bring renewed downward pressure on pharmacy reimbursements. While neither is likely to become law in its present form, the proposals signal a sea change in Washington that requires pharmacy operators to be fully engaged in defending the well-being of patients and the industry’s financial viability.

Discussion of the health care reform legislation that was passed last year centered on expanding coverage and improving care. The tide has turned decisively, and now talk in Congress revolves around what to cut and whether the entitlement programs that Americans have come to rely on are sustainable over the long term.

In the current climate it’s more important than ever for industry advocates to present a forceful case that shows the things pharmacy can do to limit overall health care expenditures.