Spending on lobbying shows healthcare cos.’ stake in healthcare reform
WHAT IT MEANS AND WHY IT’S IMPORTANT — Most of the newly elected and re-elected Republican members of Congress, Tea Party candidates in particular, vowed to whittle down or repeal healthcare reform once in office, but the healthcare companies that stand to benefit hope to change their minds, as some of their lobbying activities last quarter have shown.
(THE NEWS: Report: PhRMA’s lobbying efforts total more than $5 million in Q3. For the full story, click here)
The Pharmaceutical Research and Manufacturers of America spent $5.2 million lobbying Congress during third quarter 2010 –– which took place during those critical last few months before the midterm elections –– in part on issues related to healthcare reform. That’s less than the $6.8 million PhRMA spent on lobbying in third quarter 2009, but still enough to send the message that it has a big stake in reform. After all, the Patient Protection and Affordable Care Act, which Barack Obama signed into law in March, will provide health care to 32 million Americans who previously lacked it. That means a lot of new customers for drug makers, retail pharmacies and other healthcare companies and providers.
In addition to PhRMA’s $5.2 million, Walgreens spent $340,000 on lobbying during the quarter, according to published reports, some of which it devoted to lobbying on healthcare reform. Rite Aid spent $50,000 on lobbying during the quarter — compared with $10,000 during the first quarter and $20,000 during the second. Dwarfing both was CVS Caremark, which spent $2.6 million.
Pharmacy retailers also have a quite a bit at stake. In addition to dispensing a lot of the drugs in the first place, many of them provide preventive care services through retail clinics, often at competitive prices. The combination of the healthcare-reform bill’s emphasis on preventive care and the tens of millions of new people it will add to the system could bring in lots of new customers for retail pharmacies as well.
Fiacco entering VP post may be sign of changes
WHAT IT MEANS AND WHY IT’S IMPORTANT — Medicine Shoppe is about to get a new top manager. And with the promotion of company veteran John Fiacco to VP of its Medicine Shoppe and Medicap stores, parent company Cardinal Health effectively is changing the culture at its franchise pharmacy division.
(THE NEWS: Cardinal taps Fiacco to succeed Burnside as top exec for Medicine Shoppe, Medicap. For the full story, click here)
Gone is Terry Burnside, the easygoing, soft-spoken West Coast retail veteran who retired recently following a six-year stint with Medicine Shoppe International, most of it as president. Stepping into his shoes is Fiacco, a lifelong East Coaster who may bring into his role a more driven management style and wide experience in pharmacy practice issues.
Fiacco’s elevation signals a change in management style and a possible shift in direction for Cardinal’s Medicine Shoppe/Medicap franchise operation, which at its peak several years ago numbered more than a thousand stores in the United States. Since then, the number of U.S. franchisees has fallen below the 700-store mark, but those numbers could rise again. Cardinal has a slew of support services for independents to boost its generic business, improve back-office efficiency, manage inventory and managed-care contracts more effectively and move into specialty medicines; and Fiacco, a veteran of both Cardinal and its Medicine Shoppe division, could be effective in bridging whatever gaps remain between franchised independents and the wholesale and health services giant that supports them.
Despite the drawdown in store count, MSI made major inroads as a high-service community health center under Burnside’s direction, particularly as a major destination for diabetic care services with its Specialized Care Centers for Diabetes.
Burnside hails from Arcadia, Calif. (a classmate at Arcadia High School in the mid-1960s was singer-songwriter Stevie Nicks), and after graduation from pharmacy school, he gained wide-ranging retail and wholesale experience with Bill’s Drug, McKesson and Alpha Beta before joining Longs Drug Stores. Over a decade-long career with that premier West Coast drug chain, Burnside rose to COO before moving to Medicine Shoppe in December 2004.
It was a stark change in retail philosophies. Longs epitomized West Coast drug store retailing with its huge, wide-open and dramatically designed stores, packed with a massive assortment of product. Medicine Shoppe stores, by contrast, are tiny by contrast, featuring big apothecaries and a limited assortment of front-end merchandise, most of it devoted to health and prevention and, in many cases, to durable medical equipment and home health.
Fiacco, for his part, spent 23 years with CVS/pharmacy in a variety of roles, and brings “a wealth of knowledge in multi-store pharmacy operations,” according to Cardinal. He has built an impressive service resume in community pharmacy, including long service with the New York State Board of Pharmacy and the National Association of Boards of Pharmacy, where he was president from 2002 to 2003.
Prior to coming to MSI, Fiacco was director of solutions development, health systems marketing for Cardinal.
UnitedHealth: Cost of diabetes could be $3.35 trillion by 2020
WASHINGTON — The number of Americans diagnosed with diabetes and the related costs of the disease could reach catastrophic proportions, according to new research by the UnitedHealth Group.
The new projections are alarming, as more than 50% of Americans could have prediabetes or diabetes by 2020, which could carry a healthcare price tag of $3.35 trillion over the decade. New estimates show diabetes and prediabetes will account for an estimated 10% of total healthcare spending by the end of the decade at an annual cost of almost $500 billion — up from an estimated $194 billion this year, UnitedHealth said in its new report, “The United States of Diabetes: Challenges and Opportunities in the Decade Ahead.”
Estimates in the report were calculated using the same model as the widely-cited 2007 study on the national cost burden of diabetes commissioned by the American Diabetes Association, UnitedHealth noted.
“Our new research shows there is a diabetes time bomb ticking in America, but fortunately there are practical steps that can be taken now to defuse it,” said Simon Stevens, UnitedHealth Group EVP and chairman of the UnitedHealth Center for Health Reform and Modernization. “What is now needed is concerted, national, multistakeholder action. Making a major impact on the prediabetes and diabetes epidemic will require health plans to engage consumers in new ways, while working to scale nationally some of the most promising preventive care models. Done right, the human and economic benefits for the nation could be substantial.”
The report also focused on obesity and its relationship to diabetes, as the condition as one of the primary risk factors for diabetes — more than half of adults in the country who are overweight or obese have either prediabetes or diabetes, and studies have shown that gaining just 11 to 16 lbs. doubles the risk of Type 2 diabetes, and gaining 17 to 24 lbs. nearly triples the risk.
Click here to read the full report.