The signing of the Patient Protection and Affordable Care Act, Public Law 111-148 (H.R. 3590) (PPACA) into law by President Obama on March 23, 2010, had implications on the entire medical fraternity. According to King (2010), “The Patient Protection and Affordable Care Act (PPACA), commonly known as the health care reform law, will likely have a more far-reaching effect on health care in America than even the passage of Medicare.” This law will impact the pharmaceutical industry in several ways. The two mechanisms in PPACA that seek to control and that will greatly impact the health pharmaceutical industry is value-based purchasing and shared savings program. In fact, “much of the controversy surrounding PPACA has arisen from its impact on private health insurance and the law’s intention to expand coverage of the uninsured” (King, 2010).
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Impact of PPACA on Pharmaceutical Industry
The impact of this legislation on the pharmaceutical industry will be Section 3022 of PPACA. This will demand accountability for quality, cost, and efforts in the overall care of Medicare beneficiaries, have a formal legal structure and shift their leadership and management structure in line with the demands of the new regulations. In addition to the above, the Public Law defines processes for pharmaceutical companies to “promote evidence-based medicine and patient engagement, report on quality and cost measures, and coordinate care and meet criteria for patient-centeredness” (King, 2010).
In addition to the above, the discount program will impact this health care industry. Traynor (2010) illustrates that “the discount program calls for 50% discounts on the total cost of brand-name drugs for beneficiaries within the coverage gap.” On becoming effective, this discount will be effected at the point of sale. This means that pharmaceutical will be required to be more accountable in their practices. In addition to the above, the Patient Protection and Affordable Care Act seek to promote the production of brand name drugs in that as the coinsurance coverage for brand names will be rising from 7% in 2011 to 75% in 2020, the coinsurance for a gap for generic drugs will come down from 100% to 25% in the same period. The pharmaceutical industry will therefore lean more to towards the manufacture of brand-name drugs as opposed to generic drugs.
Time for Financial Responsibility and Accountability
It is my opinion that the Pharmaceutical industry is not targeted by any section of this law. The underlying factor is that there is a need to provide access to quality access medical services to individuals who cannot afford them. The value-based purchasing and shared programs, along with other sections of the Law are geared at changing the sect of the curve. A time has come for greater responsibility and accountability of the critical departments of our health care system. According to McGuireWoods (2010), “bringing the ceiling of the coverage gap lower, the Healthcare Reform Bill seeks to allow the beneficiaries with the greatest prescription drug expenses to take advantage of catastrophic coverage and its 5% coinsurance rate.”
It can be discerned from the above discussion that the signing of the Patient Protection and Affordable Care Act, Public Law 111-148 (H.R. 3590) (PPACA) into law will demand that the Pharmaceutical industry align their practices within the guidelines of this legislation. In addition to the above, the purpose of this Law is purely to provide an increase in coinsurance for the Medicare beneficiaries that are aimed at the provision of universal health care.
McGuireWoods (2010). Healthcare reform bill tries to address Medicare part D coverage gap crisis. Web.
Traynor, K. (2010). Health reform law offers relief in Medicare Part D coverage gap. American Journal of Health-System Pharmacy, 67(13), 1049. Web.
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King, P. (2010). Turning the Battleship: Can PPACA Change the Trajectory of Medicare Costs? Web.