Now that a couple months have passed since the Supreme Court ruling, it is time to take a look at the Affordable Care Act (ACA) and try to determine how it will evolve.  Remember that the court by a slim 5-4 margin upheld the constitutionality of the law, including the individual mandate, but introduced some doubt around the Medicaid portion of the bill.  They ruled that the states could not be forced or fiscally bullied to expand their Medicaid programs.  Now that things have settled down, it might be a good time to look at how things are evolving and the impact it will have on our industry.  The caveat of all this is that it is very difficult to predict the future of the ACA, as up to now it seems that most predictions have not hit the mark.  But let’s try anyway.

The different elements of the ACA continue to roll out on schedule and the benefits of the bill are slowly being recognized.  Young adults are now being covered longer under their parent’s insurance, insurers are prohibited from taking away coverage and the accountable care work is well underway.  Earlier this month a number of initiatives, despite some controversy around women’s health, went into effect.  Most would argue that it will be very difficult to take away the changes that are now in place.  Everyone recognizes that the major impact of the bill will come in 2014 when some of the most significant parts of the law are fully in place.

So what will happen?  Will this just be the the first step towards single payer coverage in the US?  Will employer paid insurance go away?  Will the states actually accept new federal funds and expand Medicaid or will they resist as many governors are promising?  For more depth on a number of these issues take a look at this very interesting piece written by Andrea Louise Campbell that gives some insight as to how things will change with the full implementation of the ACA.  She gives very compelling arguments to show that employers will continue to cover their employees due to the tax implications and the need to retain talent and that the ACA will not be the first step towards a single payer system.  Perhaps the most interesting part of her work is her discussion around how difficult it may be for even the most conservative states to not expand Medicaid and perhaps this fight may result in a complete re-think on the way Medicaid costs are shared by the federal government and the states.

It is very interesting to watch how politics and health policy are coming together, sometimes very smoothly but at other times like a huge collision.  The key for the pharmaceutical industry is to really figure out how we can best do business in this new environment.  This must start with a massive evaluation on what needs to change, or perhaps a better way of thinking, what can remain from the old way of doing business.  Cost controls, increased access and a focus on outcomes will be everywhere in this new world.  Protocols, formularies and standards of care will replace much of the individual decision-making by physicians that companies have relied on in the past.  Once there is solid thinking in place as to what the future will look like, solid plans must be developed.

Traditionally, for most companies we are entering or in the middle of the planning cycle for 2013.  A good gut check would be to see if you are doing things the same way today as in the past.  If the process and the thinking are not radically different, then perhaps you should question how seriously you are taking the changes the ACA have put in place.  If you are designing marketing plans thinking that individual physicians are still thinking for themselves, then you might be going down the wrong track.  If you don’t have significant plans around both CMS and commercial accountable care, you will be missing a big opportunity.  If you haven’t tried to determine appropriate pricing strategy to compete in every market then you may be relegating yourself to market segments that are at best drying up and perhaps even going away.

If you are viewing the changes the ACA put in place as restrictive on your business rather than an opportunity then perhaps you might be at a severe competitive disadvantage to generics and the branded competitors who are embracing the change.  Take a breath, try to think strategically and commit to being part of the new healthcare world rather than clinging to the past.  We are not exactly sure what it will look like, but it will definitely be different.