March Madness (HCR Version)

It’s that time again when everyone is scrambling to figure out the odds of success and who the big winners and losers will be. There have already been fouls called, full court presses, and significant upsets. No, I am not talking about collegiate basketball, but instead another wide ranging and impactful event called health care reform. With the signing into law on Tuesday of what was essentially the Senate bill, we have reached the semi finals in this tournament. In the next few days the finals will determine if a reconciliation bill gets passed or not.

Analysts and legal experts have been attempting to determine who will come out ahead depending on particular aspects of the new law. Prior to passage of the final law and creation of the reconciliation bill, Hogan & Hartson's Alice Valder Curran did an analysis at Rainmaker of various items impacting drug and device manufacturers, including the med device excise tax, increases in Medicaid base rebate percentages for innovator drugs, and expansion of the 340B program. These items will impact each manufacturer differently depending on their product mixes, distribution/utilization channels, and commercialization strategies among other things.

After determination of wins and losses comes the equivalent of game film and stat reviews. This process has already started where manufacturers are deciding how to change their game plan to respond to the enacted laws. Some responses, such as the increase in Medicaid base rebate percentages will have operational implementation aspects as well as cost and accrual tasks. Other items, such as the new fees, will have more of a forecasting and estimation impact than a direct operational impact. Of course, any item that significantly changes costs, margins, or relative competitiveness will indirectly impact future operational plans as manufacturers work to maximize returns in the new reform environment.

This season of health care reform is almost done. Regardless of the imminent final outcome of the reconciliation bill, many of the players in health care reform are already signaling a readiness for a rematch on many of the issues brought into play in this first season, so stay tuned.