Prospects for Reform – The Private
Sector Purchasers’ View
Public Sector
Healthcare Roundtable
Annette Guarisco
Executive Director, Federal Affairs
Public Policy Center
General Motors Corporation
November 28, 2006
Health Care – Not a Public or Private Sector
Problem but a National Problem
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44,000 to 98,000 deaths due to medical error costing $37.6 billion annually
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American adults on average receive only 54.9% of recommended healthcare
Large “Quality Chasm”: 30-40% waste
U.S. ranks 12th out of 13 industrialized nations on 16 top health indicators
Fragmented Health Care System, 45+ million uninsured, unsustainable cost
increases
U.S. spends greater % GDP on Health Care than any other nation (2004)
U.S. 15.3%
Germany 11.6%
Japan 8%
U.S. has much higher per capita health care costs (private + public) than any
other nation (2004)
U.S. $6,102 Germany $3,005 Japan $2,249
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60% of employers offer coverage – down 9% since 2000
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35% of large firms offer retiree health coverage, down from 66% in 1988
Critical Focus for GM
Largest private purchaser of health
care in the U.S.
1-2 deaths per day in GM family from
preventable medical errors
1.1 million employees, retirees and
dependents
GM pays 0.4% of America’s health
care cost
GM spends:
GM has an older work force and large
retiree base
•Over $5 billion for health care each
year
•Nearly $2 billion for prescription
drugs
Everyone recognizes need to improve
situation
Our Beneficiaries Deserve Better Care
GM’s Health Care Priorities
- Driving patient safety and quality improvement efforts
• Transparency/Public disclosure/Informed consumers
• Information technology/E-prescribing
- Reducing waste and inappropriate care in delivery system and improving efficiencies
- Supporting federal policies to enable the uninsured to obtain affordable health
insurance
- Encouraging the appropriate use of prescription drugs
- Managing cost, benefits of overall GM Program
• Limited dollars
• Need to use dollars wisely
Opportunities for Public and
Private Sector to Work Together
• Coverage of the uninsured
• Address high costs cases (chronic disease and
catastrophic illness)
• Prescription Drugs
• Biogenerics
• Patent extensions for brand drugs
• Comparative effectiveness for drugs and technologies
• Medicare drug law oversight
• Medical liability reform
Prescription Drug Challenge
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GM spends almost $2 billion on drugs
GM has comprehensive Rx management
program in place
15-20% increase
Demographics, new drugs, DTC, high U.S.
prices, inappropriate prescribing
Hospital, surgical and medical costs have not
declined as drug costs have increased
Drug Market Competition -Opportunity to Work Together
•Coalition for a Competitive Pharmaceutical Market
(CCPM) -- organization of employers, insurers,
PBMs, chain drug stores, generic drug
manufacturers and others committed to improving
consumer access to affordable pharmaceuticals
and promoting a vigorous, competitive prescription
drug market
•CCPM supports public policies that facilitate
timely access to affordable pharmaceuticals
•Teams with AARP to support specific measures
CCPM Members
Aetna
Hospira
America’s Health Insurance Plans Medco
Mylan Labs
Barr Laboratories, Inc.
National Assn of Chain Drug
BlueCross BlueShield
Stores
Association
National Assn of Health
Caremark
Underwriters
Caterpillar, Inc.
Pharmaceutical Care Management
Assn
DaimlerChrysler
Eastman Kodak Company
Ranbaxy Pharmaceuticals
Express Scripts
TEVA USA
Ford Motor Company
Three Rivers Pharmaceuticals
Walgreen
General Motors Corporation
Watson Pharmaceuticals
Generic Pharmaceutical
Association
Wellpoint, Inc.
CCPM Priorities -- Biogenerics
• Biogenerics
• Biological drugs are drugs of the future
• extremely expensive
• large number of biologicals in the pipeline
• Congress waiting for FDA action to determine if
science available to approve generic biologics
• Congress should clarify legal pathway for FDA to
approve generic biologicals
• Critical to ensure market competition
Biogenerics
•Waxman bill provides pathway for FDA to approve comparable
products
•CCPM supportive of safe, timely and efficient process for FDA
approval of biogenerics
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Open and competitive drug market helps all, especially the
uninsured and underinsured
Substitutability will drive best cost savings
No additional market exclusivity or patent extensions needed for
brand and biotech industry to develop biologics
FDA needs more resources to review generic drug applications
•Expecting a vigorous Congressional debate in 2007
Need to act now to prevent future cost increases
Lower PRICED Drug Act
The Stabenow-Lott Lower PRICED Drugs Act would
increase access to affordable generic drugs by:
• Ensuring proper use of the current pediatric exclusivity
rule
• Removing an arbitrary roadblock to the entry of
generic versions of certain antibiotics
• Preventing delays in the generic drug approval
process (clarifying current law to prevent abuse of the
30-month stay-of-effectiveness period)
• Preventing abuse of the citizen petition process
Drug legislation expected next year
Comparative Effectiveness Funding
• GM is part of the Alliance for Better Health Care
and is actively supporting federal funding for
government to compare drugs and technologies
• This coalition consists of public and private sector
members, including AFL-CIO, AARP, Kaiser
Permanente, BCBSA, Verizon, American Academy
of Family Physicians, American Pharmacists Assn,
Consumers Union, Caremark
• $15M appropriated, 10 priority diseases identified,
but much more is needed
As individuals spend more of their own funds
on health care they need info to make better choices
Medical Liability Reform
•Bipartisan discussion/debate needed
•Focus should be on defensive medical practices
that increase costs for all and patient safety
•Health courts and other alternatives should be
explored at state level
•Demonstration projects needed
Together, Public and Private Sector
Purchasers Can Find Common Ground
Conclusion
•Increasing interest among major corporations in
healthcare policy
•Employer coverage at risk
•Opportunities for private and public sector
employers to work together
•GM welcomes opportunity to work together
Public and Private Sector Purchasers
Have Critical Role to Play