Catalyst Corner: 2017 – An Interesting Year

Today, as the new year begins, I found it interesting to scan some of the top healthcare- and pharmacy-related stories for 2017. Modern Healthcare and Forbes focused heavily on the year’s attempts to “reform” the Affordable Care Act (ACA), as well as on the many mega mergers that were attempted and those currently underway. There were a few IT-related items of interest, as well as double the number of novel new drugs approved by the Food and Drug Administration (FDA).

Let’s start with where things are with the ACA. It seemed every month in 2017 Congress and the administration were working on various ways to dismantle the ACA. In January, days after his taking office, President Trump signed an executive order that had government agencies back off implementation of the ACA. He continued with reducing funding for the Department of Health and Human Services (HHS) by nearly 18% with his budget request in February. That request also hit many programs designed to reduce poverty. Insurance companies were reacting, and much was being reported about the potential of these moves to destabilize the insurance market. As a result, a rule that would address this was issued by HHS in April. In a press release about the rule, Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma was quoted as saying, “CMS is committed to ensuring access to high quality affordable healthcare for all Americans and these actions are necessary to increase patient choices and to lower premiums. While these steps will help stabilize the individual and small group markets, they are not a long-term cure for the problems that the Affordable Care Act has created in our healthcare system.”

Those problems continued to be addressed by the Republican administration and Congress, with the House passing the American Health Care Act, approved mostly along partisan lines, 217-213, in early May. The bill would cut ACA, phase out Medicaid expansion, cut tax credits, and allow states to opt out of many of Obamacare’s protections and coverage requirements. In July, the Senate failed to pass a bill to repeal and replace the ACA, with most assuming that would be the end of attempts for the year. However, cost-sharing reduction payments to insurers were stopped in October. Then, with the passage of the GOP tax plan in December, the individual mandate for individuals to buy an ACA insurance plan or pay a penalty was repealed. With this repeal, the Congressional Budget Office estimates that 13 million Americans will not have health coverage, which translates into the federal government saving nearly $340 billion. Yet insurance enrollment through the ACA marketplaces reached nearly 9 million in spite of the enrollment period being cut in half, and more than a million of the enrollments were by new customers. While that is slightly less than the last enrollment period, observers were surprised it was not much lower, given that the outreach budget was cut by 90%. It will be interesting to track how the market responds in 2018. As one of those 9 million individuals, I can say that only efforts by my home state government allowed our insurance premiums to be reduced by comparison to last year. Stay tuned.

Industry Consolidation

The megamerger trends also received a lot of coverage in 2017. UnitedHealth Group’s acquisitions of Surgical Care Affiliates in March and DaVita Medical Group’s urgent and primary care business in December. Anthem and Cigna stopping their merger discussions in the spring. Amazon’s purchase of Whole Foods and continued statements they may be interested in purchasing a PBM and moving in the pharmacy space. Walgreens’ and Rite Aid’s failed merger. Aetna’s failed merger with Humana, and CVS’s announcement of a deal to buy Aetna in December. Now, rumors that Walmart may be in discussions with Humana are surfacing on the internet. The Amazon and CVS/Aetna deals have been creating buzz throughout the blog world. Pharmacy has been responding with concerns being voiced at the Federal Trade Commission (FTC), especially in light of the continued problems that pharmacy is having with many preferred PBM networks, DIR (direct and indirect remuneration) fees, lack of transparency, “gag” clauses, and delivery prohibitions, among others. I expect to see this pressure by pharmacy to continue. CMS has at least tried to address some of these practices in its 2019 call letter, and the pharmacy community is currently in grassroots mode, encouraging CMS to make recommendations final in comments through the mid-January deadline.

Health IT Progress

On the information technology side, Texas enabled telemedicine visits without “in person” meetings between providers and patients — the last state to do so. The Pharmacy Health Information Technology Collaborative provided updates in August to the SNOMED CT value sets for pharmacy documentation that were published initially in 2016. In her press release, Executive Director Shelly Spiro noted, “The value sets are designed to support standardized documentation of pharmacy services across all practice settings, regardless of which software is used to capture the data. All data derived from the value sets could be used to exchange clinical information between providers or report quality measures for public and private quality payment programs.” These value sets are being used in the CMS Enhanced Medication Therapy Management program pilots, and ClearStone Solution’s Joshua Johnson said during Minnesota Pharmacists Association presentations that he feels this is one of the big benefits of the program. The year also brought more cyberattacks, especially of healthcare networks, with the Office of the National Coordinator for Health Information Technology (ONC) ratcheting up its communication efforts on how to prevent them and providing cybersecurity updates and tips. In a move welcomed by the pharmacy community, the DEA (Drug Enforcement Administration) clarified that DEA-registered pharmacies could transfer unfilled electronic controlled substance prescriptions to another pharmacy if they could not fill it for any reason. Finally, in December, the FDA issued draft guidance on digital medical devices and mobile apps, in keeping with requirements of the 21st Century Cures Act. I’ll be writing more on that in a future column.

The FDA Moves the Needle

Finally, 2017 was a bumper crop year for new drug approvals by the FDA. The availability of new drugs and biological products often means new treatment options for patients and advances in healthcare for the American public. According to the FDA, “Certain drugs are classified as new molecular entities (NMEs) for purposes of FDA review. Many of these products contain active moieties that have not been approved by FDA previously, either as a single ingredient drug or as part of a combination product.” FDA approved 46 NMEs in 2017, compared to 22 NMEs in 2016 and 45 NMEs in 2015. You can read about the details for this past year’s NMEs at Several approvals were for drugs to treat rare diseases. Many were for drugs to treat various cancers. Other approvals were for drugs to treat a variety of chronic conditions, including diabetes and heart disease. These new treatments may represent important new therapies for patients moving forward. There are a number of NMEs that are up for review in 2018, and I look forward to sharing those with you later this year. In the meantime, I hope your 2018 is off to a great start! CT

Marsha K. Millonig, B.Pharm., M.B.A., is president of Catalyst Enterprises in Eagan, Minn. The firm provides  consulting, research, and writing  services to the healthcare industry. The  author can be reached at