Section 1332 Opportunity for Pharmaceutical Manufacturers

Section 1332 Opportunity for Pharmaceutical Manufacturers – by Gregory Judd, CEBS


A funny thing happened while pharmaceutical manufacturers were going through wrenching strategic and organizational changes during the past 6 or 7 years. The Affordable Care Act.

Ok, so ACA is not all THAT funny. But it IS big, and has exerted a sort of gravitational pull on the changes the pharmaceutical industry has been working through . While the changes it has wrought in the alignment of clinical resources has arguably amplified pharma’s recognition that it must move marketing well beyond physician detailing,it has not provided much in the way of signals about where pharma’s attention should be redirected. Is it ACOs? Is it federal procurement? Is it Medicare and Medicaid? Go ahead and hunt for industry consensus – you won’t find it.

Nor will you find signs that pharma leadership has its eyes on ACA provisions that will shape where drug buyer strategy is literally coming from. One such provision that has unjustifiably remained in the shadows is variously referred to as “Wyden waivers”, or “Section 1332 waivers”, which take effect beginning January 1, 2017.

Allow me to quote from one representative analysis of the potential impact of this little-noticed ACA provision: “Section 1332 of Title I of the Affordable Care Act offers to state governments the ability to waive significant portions of the ACA, including requirements related to qualified health plans, health benefit exchanges, cost sharing, and refundable tax credits. It permits state governments to obtain funding that otherwise would have gone to residents and businesses through the ACA and to use those funds to establish, beginning in 2017, an alternative health reform framework within statutory limitations….” (John E. McDonough Harvard University, Jrnl of Health Politics, Policy & Law 5/19/14)

….Section 1332 has the potential to instigate a new, varied, and unprecedented array of state health sector innovations from both sides of the political divide over health care reform

Wait, you say – didn’t ACA strive to level the playing field, and impose a one-size-fits-all framework over the whole of US health care and health benefits financing? Well, sure – initially. Among other things, Section 1332 was included in the law because legislators anticipated – wisely – that once the law’s broad parameters were instantiated, leaders of regional, state and local governmental jurisdictions would clamor for an opportunity to show that they can do health care better – to accomplish ACA’s goals more efficiently and effectively.

What does that mean for drug makers? Among other things, as providers of the health care “tools” (goods, services, and information) with which policymakers implement their “better” methods, Section 1332 means at least 50 more opportunities to engage with decision leaders in large-scale treatment innovation aligned with the capabilities of their products and services.

Devising a plan for engaging the ‘right’ Section 1332 opportunities requires pharma decision leaders to tap different information resources than they have employed in developing their initial ACA strategies. For example: how will you identify and track the states most inclined – and best-positioned – to take advantage of waiver opportunities, especially with respect to drug benefits and coverage? What are the economic/demographic ‘profiles’ of the places in which waiver strategies will be implemented? Who will be the leaders supporting, and opposing, Section 1332 policymaking?

Access Market Intelligence has a program in place to monitor Section 1332 opportunities by state and the potential impact for pharmaceutical companies and other healthcare stakeholders.