The Politics of Pharmacy

“Politics is the art of looking for trouble, finding it, misdiagnosing it, and then misapplying the wrong remedies.”—Groucho Marx

Tomorrow’s the big day—the sure-to-bore Bipartisan Meeting on Health Reform. Anyone expecting the spirit of consensus to burst forth magically from Washington? Nope, me either.

Closer to home, The USA Today recently reported that the health industry's political giving rose 14% in 2009. Apparently, the National Community Pharmacists Association (NCPA) had the biggest jump in giving during the past 2 years. News to me, but not really surprising.

Alas, I fear the NCPA’s success signals a pharmacy marketplace that promises to become much less dynamic. The basis of competition is shifting away from innovation, efficiency and value and towards whichever group can curry favor with legislators and regulators. The stakes keep getting higher as government money crowds out private payers. See CMS' New Drug Spending Projections.

Here's what The USA Today said:

“The National Community Pharmacists Association had the biggest jump. Its political arm gave more than $1 million in 2009, more than triple its 2007 giving. The 13,000-member group worked successfully to insert favorable provisions in health bills that passed the House of Representatives and Senate last year, including a measure to roll back cuts in government reimbursements for generic drugs.”

Bruce Roberts, head of NCPA, was unapologetic about this increase: “We are now focused on making sure we are in the game and getting our voices heard. It has been a good investment." He went further in an NCPA blog post by boasting: “The NCPA PAC has risen from 963rd to the 40th largest association PAC in the country.” (Note: See comments below for comparison of NCPA PAC spending to PCMA PAC spending.)

H.R. 4489: The FEHBP Prescription Drug Integrity, Transparency, and Cost Savings Act is a good example of the ROI from NCPA’s cash. The bill—subject of a legislative hearing yesterday by the Federal Workforce, Postal Service and the District of Columbia Subcommittee—is nothing more than independent pharmacy’s anti-PBM wish list. John Calfee of AEI wrote a good point-by-point rebuttal of the bill’s many flaws.

The NCPA and others have every right to lobby for their own profits. But is it good public policy or good economics to tilt the playing field in favor of a particular dispensing channel (independent pharmacies) instead of letting the market decide? Seems like many independent pharmacy owners will say “of course” without hesitation.

As a citizen and an economist, I’m skeptical.