At McKesson, our businesses and customers span all settings of healthcare, which allows us to view and understand our complex healthcare system in a comprehensive fashion. We are actively engaged in many public policy issues that impact our operations as well as those of our customers, including physician groups, pharmacies, hospitals, manufacturers, homecare agencies, insurers and long-term care providers.
Whether it is an election year or not, our public policy efforts focus on supporting our businesses and advocating constructive policy solutions to challenging and relevant healthcare issues.
This section of the report describes our public policy approach in the U.S., where we help educate government officials at the local, state and federal levels as they develop policies to improve the healthcare delivery system. Of particular importance to McKesson are health policies that promote the safe, cost-effective and timely distribution of pharmaceuticals and medical supplies and the use of innovative health information technology solutions that improve the efficiency, cost savings and quality of care in our health ecosystem.
In this section, we also describe association memberships, as specified in the Global Reporting Initiative’s guidelines. At the end, we have a list of association memberships specific to Canada. In future years, we look forward to providing additional detail on our approach to public policy in Canada.
Key Public Policy Issues
Public policy issues are important to the company, to our customers, and to our mission of improving the quality and delivery of healthcare. They include the following:
Security of the Supply Chain
Safe medicines are a critical component of effective healthcare. Patients should have access to lifesaving treatments without having to worry about the safety of the medication. A robust and secure medication delivery infrastructure is critical to achieving efficiency, safety and quality.
We work directly with manufacturers, to ensure we are purchasing only legitimate, Food and Drug Administration (FDA)-approved medicines and to prevent the introduction of counterfeit medicines into the supply chain. McKesson also maintains secure facilities that adhere to FDA and Drug Enforcement Administration (DEA) storage and handling requirements.
We are actively engaged in the implementation of the Drug Quality and Security Act of 2013 (DQSA), which we supported during its development and consideration by Congress. The law creates a uniform national standard for drug supply chain security. This includes phased-in unit-level serialization for all pharmaceutical products so they can be traced electronically from manufacturer to distributor to pharmacy, and back up the chain. Today, we are piloting the exchange of serialized product data to assure the integrity of the supply chain and to develop solutions to meet future state and federal regulatory requirements for the traceability of pharmaceutical products.
The Pharmacist as Provider
The shift from a volume-based to a value-based healthcare system will require the use of cost-effective resources. Pharmacists have the expertise to provide a wide array of medical services, including medication therapy management (MTM) and the provision of vaccines and certain other drugs — all at a relatively low cost. Unfortunately, pharmacists are significantly underutilized in today’s healthcare system and not typically reimbursed for certain services they are allowed to provide.
State governments are looking to expand pharmacists’ role as providers.
In addition to providing additional care such as immunizations, these bills would also allow pharmacists to prescribe certain medications. Iowa, Idaho, Pennsylvania, Tennessee, Utah, Washington, and Wisconsin have passed expanded scope of practice legislation, and 12 additional states still have legislation pending.
McKesson believes pharmacists must play a more prominent role in the provision of healthcare services, and we support a variety of initiatives designed to achieve that goal. We are a member of the Patient Access to Pharmacists’ Care Coalition, a leading proponent of the expanded scope of practice for pharmacists. The Coalition’s mission is to develop and help enact a federal policy proposal that would enable patient access to, and payment for, Medicare Part B services by state-licensed pharmacists in medically underserved communities.
We also support the bipartisan Pharmacy and Medically Underserved Areas Enhancement Act (H.R. 592/S. 314). This legislation would enable patient access to, and coverage of, Medicare Part B services (like immunizations and preventive care) subject to state scope of practice laws provided by pharmacists in medically underserved communities.
Emergency Road Access for Vital Pharmaceuticals and Medical Supplies
McKesson delivers one third of all medicines used every day in the United States. We have a long history of providing vital pharmaceuticals, medical supplies and health IT solutions to hospitals, healthcare businesses and individuals impacted by natural disasters, acts of terrorism or other major crises. When a crisis hits we reach out quickly to coordinate with federal, state and local agencies to bring needed medicines and supplies to the affected areas. This was the case with Hurricanes Katrina and Rita, Super Storm Sandy, and many other local crises.
States of emergency, such as hurricanes, blizzards and earthquakes often result in the closure of major highways, bridges and tunnels. During these times, road travel is commonly permitted only by essential or emergency vehicles, though laws and regulations vary by state.
In recent years, severe storms have kept McKesson’s pharmaceutical deliveries from reaching patients in times of need. Governors and state emergency response teams need to permit these deliveries in order for McKesson to be able to reach our customers in states of emergency.
The Public Affairs team secured permission for deliveries in Florida in advance of Hurricane Erika and in South Carolina in the aftermath of Hurricane Joaquin. Our proactive efforts will be replicated in other states to ensure our pharmaceutical deliveries are included in emergency preparedness planning.
We continue to be committed to enhanced contingency planning and ongoing communication with government agencies to allow us to continue to respond to unforeseen or unanticipated crises.
Appropriate Regulation of Health IT
Patient safety should be one of the highest priorities for all stakeholders in healthcare. Health IT plays a critical role in improving the quality, safety and cost-effectiveness of care. McKesson believes that the implementation of innovative technology solutions plays a key role in improving patient safety. We support policies that promote the development and accessibility of solutions that help to minimize medical errors and other operational oversights. We also advocate that software be defined and regulated in a way that fosters innovation while ensuring product and patient safety.
We advocated for the development of a new oversight framework for health IT that would appropriately support both patient safety and innovation, and actively promoted the inclusion of this provision in the Food and Drug Administration Safety and Innovation Act (FDASIA), enacted in July 2012.
McKesson’s advocacy for an appropriate risk-based regulatory framework for health IT was embraced by others in the healthcare community. This concept was adopted in a Bipartisan Policy Center report, An Oversight Framework for Assuring Patient Safety in Health Information Technology.
In 2015, the U.S. House of Representatives passed the 21st Century Cures Act, comprehensive healthcare legislation that aims to accelerate the discovery, development and delivery of lifesaving and life improving therapies. McKesson advocated for many of the provisions in the bill, specifically those focused on appropriate regulation of health IT to ensure that there are no unnecessary hurdles to patient access. The U.S. Senate is currently considering similar legislation, and our Public Affairs team will continue to engage with lawmakers on this important issue.
Person-Centered Interoperability of Health IT
At McKesson, we have long recognized the importance of the interoperability of healthcare data, which is essential to improving quality, reducing costs, enabling regulatory compliance and ensuring better access to healthcare for millions of people. In an industry with multiple standards and hundreds of health IT platforms, no healthcare technology supplier can solve the problem of interoperability alone. Our current healthcare delivery system lacks a universally adopted, user-friendly, affordable way to allow for the seamless movement of patient-centered data across all settings of care. Solving this challenge will require a multifaceted approach.
In 2013, McKesson, along with other industry leaders, launched the CommonWell Health Alliance®, a collaborative effort among competitors in the health IT industry focused on achieving data exchange between different health IT systems. CommonWell is an inclusive not-for-profit organization supporting real-time access to health data in different locations across all settings of care. As of February 2016, CommonWell services are live in over 4,400 provider sites across all 50 states, the District of Columbia (DC) and Puerto Rico.
McKesson continues to work with CommonWell, industry partners, the Obama Administration and Congress on timely adoption of public policy that will advance interoperability and the safe and timely exchange of health information across the states and all settings of care.
In order to achieve person-centered interoperability, we believe that Congress should declare health IT interoperability to be a national priority, set a final national deadline for achievement of widespread health IT interoperability, and direct the Department of Health and Human Services to set a series of goals, with corresponding deadlines, toward achievement of the final national deadline. By the final national deadline, individuals and their healthcare team across the care continuum should be able to electronically send, receive, find and use a common set of health information.
The 21st Century Cures bill that passed the House of Representatives last year contained language focused on accelerating health IT interoperability. McKesson helped to shape much of the language about health IT interoperability included in the Cures Act. Specifically, the bill provides a patient-centered definition of interoperability, provides for interoperability requirements as part of Electronic Health Record (EHR) certification, and prohibits so-called “information blocking” by either health IT vendors or providers. As the Senate considers similar interoperability legislation, McKesson continues to work with other health IT companies to advocate for a clear definition of interoperability, a deadline for vendors and providers to achieve baseline connectivity, and the use of private sector standards.
Solutions for Prescription Drug Abuse
Prescription drug abuse and opioid diversion is now the country’s fastest-growing public health crisis, impacting families and communities in profound ways. It has also contributed to an alarming rise in heroin use. According to 2015 Centers for Disease Control and Prevention (CDC) National Vital Statistics System mortality data, deaths from prescription painkillers have quadrupled since 1999, killing more than 16,000 people in the U.S. in 2013.
Federal lawmakers have held multiple oversight hearings and debated major legislation to address this epidemic. Governors, Attorneys General and state legislators are convening special pharmaceutical abuse task forces, improving state prescription drug monitoring programs (PDMPs) and tackling prescription take-back programs. The issue continues to evolve with more legislation addressing addiction, treatment and prevention to stem the epidemic.
The epidemic has emerged as a pressing public policy and political issue. Congress passed the Comprehensive Addiction and Recovery Act (CARA), which includes a variety of opioid abuse prevention and treatment programs, including expanded access to overdose reversal drugs and medication-assisted treatment. The bill has new funding to beef up state-led PDMPs and incentives for creating interoperable databases. The bill also provides more tools for law enforcement in its heroin interdiction efforts and prosecuting opioid diversion.
The states are debating mandatory PDMP checks for prescribers (and in some cases dispensers), permission for pharmacists to dispense the overdose reversal drug Naloxone without prescription, and mandates for health plans including Medicaid to cover abuse-deterrent opioids.
McKesson will continue to work with government, law enforcement, pharmaceutical manufacturers, other distributors, and pharmacies and healthcare providers who dispense medications to seek effective solutions to reduce prescription drug abuse nationwide.
Our company has made significant enhancements to our internal processes to prevent pharmaceuticals in our care from falling into the wrong hands. We also educate our pharmacy customers about their role in preventing prescription drug abuse.
Value-Based Care and Payment Reform
The Affordable Care Act (ACA) established an ambitious new framework to move our healthcare system away from rewarding health providers for the quantity of care they provide and toward rewarding quality. These new models have been put to work in Medicare, and according to the Centers for Medicare & Medicaid Services (CMS), have contributed to 50,000 fewer patient deaths in hospitals due to avoidable harms, such as infections or medication errors, and 150,000 fewer preventable hospital readmissions since 2010, when the Affordable Care Act became law.
Avenues to advance high-quality care, improve transitions, produce stronger patient outcomes, increase efficiency and reduce costs are critical to support the shift to a value-based healthcare system. The U.S. Senate is working to identify solutions to improve care and reduce costs for Medicare beneficiaries. It is also considering legislation that would cover Medicare Part B services (like preventive care and immunizations) provided by pharmacists in medically underserved communities. As states move to value-based reimbursement, “transparency” is an emerging public policy focus. Transparency for consumers — related to drug pricing, the cost of medical services, how treatment decisions are made and who will be covered for what services — is being debated in state capitals.
CMS has set a goal of moving 30% of Medicare payments into alternative payment models (APMs) by the end of 2016 and 50% into alternative payment models by the end of 2018. CMS continues to focus on several pilots of APMs that emerged as part of payment and delivery system provisions within the ACA.
These pilots, combined with the Medicare Access & CHIP Reauthorization Act of 2015 (MACRA), are intended to reform Medicare payment. MACRA makes three important changes to how Medicare pays those who give care to Medicare beneficiaries: 1) ending the Sustainable Growth Rate (SGR) formula for determining Medicare payments for healthcare providers’ services, 2) creating a new framework for rewarding healthcare providers for giving better care, not just more care, and 3) combining existing quality reporting programs into one new system. These changes create a Quality Payment Program (QPP).
MACRA allows healthcare providers to take part in quality programs in one of two streamlined ways: 1) Merit-Based Incentive Payment System (MIPS), and 2) alternative payment models. Both go into effect over several years beginning in 2019. MIPS is a new program that combines parts of the Physician Quality Reporting System, the Value Modifier, and the Medicare Electronic Health Record (EHR) incentive program into one single program providers will be measured on. These areas include quality, resource use, clinical practice improvement and meaningful use of certified EHR technology.
CMS published a MIPS and APM Proposed Rule in April 2016 that will set the stage for dramatic changes in provider payment incentives, reporting and behavior. McKesson closely analyzed the rule for potential impacts to reimbursement incentives for our provider customers and requirements of our solutions that assist providers with managing, documenting and reporting the delivery of care. McKesson’s comments, submitted in June 2016, applaud CMS’s goals to promote interoperability and increase flexibility in the Meaningful Use program. McKesson encouraged CMS to include the Oncology Care Model two-sided risk arrangement as an advanced APM and to give providers more flexibility in reporting requirements.
McKesson is also engaged in supporting the shift to a value-based healthcare system through the promotion of effective government policies and business solutions. McKesson is engaged on three policy fronts to support this shift: 1) support of an expanded role for the pharmacist, 2) accelerated adoption of interoperability in health IT to advance the exchange of healthcare information, and 3) the promotion of appropriate, evidence-based clinical and claims solutions to enhance efficiencies and quality outcomes.
We are pleased that the Obama Administration announced a pilot program in 11 states to incentivize Medicare Part D plans (which cover prescription drugs) to offer pharmacist-led medication therapy management services to their beneficiaries. This pilot will be implemented in January 2017. Additionally, our Public Affairs team engages with the Senate Finance Committee’s Workgroup on Chronic Care, which is focused on identifying policy solutions that improve care and reduce costs for Medicare beneficiaries. We discussed ways to expand MTM services, as well as examples of successful value-based reimbursement models that have utilized McKesson software solutions.
Responsible Management of Healthcare Information
We are committed to carefully managing the rights of individuals and safeguarding the privacy of healthcare information entrusted to us by utilizing industry-accepted best practices. This data is critical to the timely and effective delivery of healthcare products and services, improvements in quality and safety, and the development of new lifesaving and life-enhancing medical innovations. We advocate and subscribe to policies and practices that protect the privacy of patients and healthcare consumers, while simultaneously enabling the essential flow of patient information.
Specifically, we recommend uniform national privacy and security standards across the states to ensure the portability and interoperability of patient information. The current assortment of differing laws, regulations and policies that govern the use of data at the federal, state and local levels has the unintended consequences of constraining the use of data that would improve the quality of healthcare delivery and enhance public health and research.
In order to protect patient information, ensure accountability, and promote health IT adoption and innovation across the healthcare system, we advocate policies that align federal and state regulations related to inadvertent disclosures and general breach laws. Conflicting and varying federal and state regulations regarding the use and sharing of data and the protection of privacy create an uncertain liability exposure, which has a significant chilling effect on investment in health IT.
McKesson’s Public Affairs activities aim to shape relevant health policy, create productive working policy collaborations with key internal and external stakeholders, and enable McKesson to become a trusted advisor on many healthcare policy issues and other tax, trade, labor, environmental and general business climate issues that impact our ability to satisfy our mission. We engage stakeholders in a number of ways in these areas:
- Government Relations: We continue to develop and strengthen relationships with public officials at all levels of government as we advocate policies to improve healthcare delivery and promote efficiency, ultimately reducing costs. McKesson retains contract lobbyists in Washington, DC and in selected states to provide additional insight into legislative issues as well as regulatory initiatives, and to assist McKesson in proactively shaping the outcome of these public policy issues.
- Internal Subject Matter Experts: By collaborating with internal subject matter experts and coordinating our messages across the company, we develop and offer policy solutions to challenging healthcare issues. The Public Affairs team leads a company-wide group of employees that serves to strengthen and maximize advocacy efforts at the federal, state and local levels. In conjunction with experts in our business, the Public Affairs team also coordinates corporate strategies on regulatory issues of importance to McKesson, increases intra-company awareness of regulatory issues, and ensures a coherent and impactful company-wide position on critical public policies.
- Industry Partners and Policymakers: McKesson plays an active role in educating policymakers about the solutions we offer to improve patient safety, reduce the cost and variability of care, and improve the quality and efficiency of healthcare delivery. Through tours of our distribution centers and visits to pharmacy and hospital customers, policymakers can better understand the steps we take to assure the safe, efficient and rapid distribution of pharmaceuticals and medical-surgical supplies and the tools and technology solutions we provide our customers to improve the quality and delivery of healthcare.
McKesson understands that the decisions made by policymakers have a profound impact on our industry, business, customers, and the patients they serve. We seek to educate elected and appointed officials about the solutions we offer to improve patient safety, reduce the cost and variability of care, and improve the quality and efficiency of healthcare delivery.
McKesson believes that transparency and accountability with respect to political expenditures are important.
Political Contributions Policy
- The McKesson Code of Conduct specifically prohibits the payment of corporate funds to any political party, candidate or ballot measure campaign, and some personal political contributions by directors, officers and employees in certain roles without the written approval of Public Affairs.
- All corporate political contributions in excess of $1,000 are approved by the Chairman of the Board and Chief Executive Officer.
- The personal political views of McKesson executives or employees are not considered when making contributions.
- The company does not make “independent expenditures,” nor does it contribute to so-called “Super PACs.”
- Contributions made by the McKesson Corporation Employees Political Fund are not made with corporate funds and are governed by its Board of Trustees.
- All corporate political contributions are subject to strict federal and state laws and regulations on disclosure. The senior vice president of Public Affairs reports all corporate political contributions annually to the Board of Directors, and the Board exercises oversight with respect to corporate political contributions.
Political Action Committee (PAC)
McKesson engages in the political process primarily through the McKesson Corporation Employees Political Fund.
Contributions made by the PAC are funded entirely by eligible McKesson employees on a voluntary, non-partisan basis. Such contributions are not made with corporate assets. The PAC allows employees to pool their financial resources to support federal, state and local candidates, political party committees, and political action committees. Eligible employees may choose not to participate without fear of reprisal.
The activities of the PAC, which is governed by its own Board of Trustees, are subject to comprehensive regulation by the federal government, including detailed disclosure requirements. The PAC files monthly reports of receipts and disbursements with the Federal Election Commission (FEC), as well as pre-election and post-election FEC reports.
Click here for the FEC database of PAC contributions and enter “McKesson Corporation Employees Political Fund” or “Committee ID: C00108035.” Similarly, where allowable and in strict conformance with state election laws and regulations, PAC contributions are made in accordance with objective and consistent evaluative criteria.
Corporate Political Contributions
While the McKesson Corporation Employees Political Fund is the primary vehicle for political engagement, the company does make a limited number of corporate political contributions at the state level where permitted by law. This includes corporate contributions to state candidates and political action committees in areas where the company has a significant employee or facility presence.