Under the Affordable Care Act, referred to by some as “Obamacare,” some 20 million people who could not afford health insurance prior to the law going into effect could now afford to go to the doctor and get the medications they needed for treatment of illness or medical conditions. Now, with our new president’s efforts to repeal the ACA, how will it impact some businesses who generate a substantial portion of their revenue through prescriptions, such as Walgreens Boots Alliance? At the moment, no one really knows – including Walgreens Boots Alliance’s CEO, Stefano Pessina, who, according to news reports, is in the dark as much as the rest of the country.
Chuck Greener, Vice President of Walgreens, doesn’t believe there will be a substantial impact, and says he feels it will be years before a repeal and replacement go into effect. Both Greener and Pessina agree the millions who became insured under Obamacare will remain covered through any replacement program. Pessina said, during the Deerfield company’s first-quarter earnings call, that “For sure they will try to do something sensible and rational, and they will start with something which will not be to the detriment of the citizens.”
Certainly this is the hope of many companies who rely on pharmaceuticals and prescriptions as a substantial portion of their revenue. For Walgreens, the disappearance of the ACA without a replacement in place could be devastating, considering the fact that 67% of the company’s U.S. sales can be attributed to pharmacy sales. In 2016, $56 billion of Walgreen’s revenue came from pharmacy sales.
On the bright side, the Trump administration turned down a recommendation by the Health Resources & Services Administration that would have affected the 304b Drug Pricing Program. Walgreens is the biggest 304b prescription provider in the U.S. This program makes it possible for providers who care for low-income patients to offer drugs at a lower price.
President Trump recently announced that replacement of Obamacare could run into 2018, so we will all have to wait and see how this plays out. Hopefully it won’t be detrimental to patients or pharmacies.
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