GOVERNMENT and LAW

Wholesalers taking hard look at laws, regulations

Complying with laws and regulations must surely increase the cost of medicines, and the newly renamed Healthcare Distribution Management Association (HDMA) is planning to offer President George W. Bush the background information needed for a full review of the impact.

"It seems to me that we have a greater opportunity now with the new administration to more realistically look at laws and regulations and ask, Do they work? Could they work better? Or, should we be rid of them?" said Ron Streck, CEO of HDMA (formerly the National Wholesale Druggists' Association). In an interview with Drug Topics, Streck said the study would look not only at laws and regulations that affect wholesalers, but also at those that affect all the health-care segments they interact with—manufacturers, hospitals, and community pharmacies. The idea, he continued, is to have the industry present a united front and press for change, even if a particular regulation doesn't directly affect all parties.

The study also will look at legal and regulatory systems in Canada and Mexico. "We take a lot of heat because our [drug] prices are higher than in other countries," Streck said. HDMA believes the cost of compliance in the United States adds significantly to the disparity but wants to have hard evidence to support its claim. "We want Congress to recognize that if it passes laws that affect the way we do business in health care, there are costs attached to that," he said.

Another initiative for the 125-year-old trade association has an even broader outlook, reflecting the increasing globalization of the health-care industry. A Web-based databank, the Global Healthcare Business Forum will attempt to bridge borders with the information needed to link health-care buyers and sellers. Streck said HDMA was going to send out 5,000 brochures to health-care companies around the world inviting them to join the portal, list their products, and offer a hyperlink to their Web page.

An obvious use for the forum, HDMA acknowledged, would be to aid the importation of prescription drugs into this country. Congress passed a law late last year allowing wholesalers and pharmacies to reimport U.S.-made Rxs shipped abroad. But President Clinton's secretary of Health & Human Services, Donna Shalala, said the law contained loopholes that would enable manufacturers to whittle away at the potential for cost savings. In addition, she said the safety of the reimports could not be guaranteed as the law was written.

Concern about safety was the main reason HDMA opposed the measure, but if the Bush Administration resurrects it, the forum would provide a key connection point. In a statement announcing organization of the forum, Streck said imported Rxs "will eventually become a reality in the United States. Coupled with the significant growth of over-the-counter and home health-care markets around the world, it is essential that we develop HDMA's first business group on behalf of our members and their potential trading partners."

Another new tech solution to an old way of doing business—chargebacks—also is beginning at HDMA for wholesalers; manufacturers; and, later, community pharmacies. The Contract Processing Network will deal electronically with bids, eligibility for different prices, purchase history, and market-share information that still is largely done by fax. It is expected to streamline the way Rxs are inventoried and managed in a timely and accurate fashion. "It will significantly reduce the number of chargeback disputes occurring every year," Streck said. "It will save millions and millions of dollars."

Michael F. Conlan

Mike Conlan. Wholesalers taking hard look at laws, regulations.

Drug Topics

2001;3:66.