In this episode, we shed light on the critical importance of state-level politics in the consumer healthcare industry. Discover how state actions can influence policies, innovate solutions, and even pave the way for federal decisions. Gain insights into the value of collaboration among CHPA members to advocate for the industry's interests at the state level. All this, and more, on today's episode of CHPA Chat.
- Episode Transcript
Speaker 1: The views expressed in this podcast are solely those of the speaker and do not necessarily represent the opinions of the Consumer Healthcare Products Association.
Allegra Bartscherer: Lately, it is all eyes on state level politics, and one state's actions can have a ripple out to other states making it even more important to have a great state government affairs team monitoring the issues. And the CHPA team has monitored a record number of bills in 2023. On this episode, you'll hear which issues are dominating in the self-care industry and which issues are creating tension between federal and state legislators, as well as what's on the horizon that CHPA and its members need to prepare for.
Speaker 1: Welcome to CHPA Chat, conversations in the consumer healthcare industry.
Allegra Bartscherer: Welcome to CHPA Chat. I'm Allegra Bartscherer and in this episode our esteemed guest in today's discussion will shed light on the inner workings of state governments. From deciphering the impact of state elections to unraveling the intricacies of state budgets, we'll explore the significance of state level decisions on healthcare and the environment, illustrating how these actions directly influence the everyday lives of individuals and the consumer healthcare products industry. Joining me is my colleague Carlos Gutierrez, vice president of state government affairs at CHPA. With over 25 years of professional experience engaging with state legislators across all 50 states, he's been CHPA's principal advocate at the state level for the past 13 years. Carlos, it's a pleasure. Welcome to CHPA Chat.
Carlos Gutierrez: Thanks, Allegra. Good to be back on CHPA Chat. Looking forward to the conversation. I'm very biased, but I'm hoping that at the end of this conversation people will be as passionate as I am about the 50 states.
Allegra Bartscherer: All 50 or just your favorites?
Carlos Gutierrez: All 50.
Allegra Bartscherer: Well, let's dive right in. We work in the nation's capital, Washington DC. All eyes are on Congress all the time, tell me, why should our focus be on what's happening in our state capitals?
Carlos Gutierrez: I think, and I believe I'm attributing this correctly, but former speaker Tip O'Neill once said that all politics is local, and he was exactly right. What happens in the states, what happens in your local government has far greater impact on your daily lives than really anything that's happening on the Hill with Congress. That's not to suggest that Congress is irrelevant, that's not to say that they don't matter, but we are a republic of states.
State affairs provides proximity to the people, people are usually within a drive to the state capital. There's policy experimentation and innovation. I think Justice Brandeis once said that states are the laboratories of democracy. There's tailored solutions, very unique to the state. When something happens in Congress, you have to do a one size fits all for all 50 states, and at state level you don't have to do that. You have much more responsive governance. The states are much more nimble, can react a lot quicker than the federal government. And I think probably the thing that distinguishes the states the most is citizen engagement and accountability. Again, you're highly accessible, your constituents can come in and drop by anytime. There's far less security at state level politics. So citizens really do engage.
The constitution specifically delineates that the federal government has specific powers and it's only those powers that they're allowed to get into. And it's things that we're all familiar with, right? National defense, foreign policy, or money, currency, immigration, things of that nature. But they also wanted to guarantee that states had regional autonomy, so states really do pretty much everything else. They have their own laws over education, police powers, intrastate commerce, licensing regulation, marriage law, et cetera. So to me, and again, I'm very biased on this, but to me the real action is in the state capitals around the country. And with the gridlock on Capitol Hill, things just continue to get worse and worse, you can bet you'll continue to see this devolution of policy down to the states and states really acting where the federal government sometimes is missed.
Allegra Bartscherer: So what you're saying is, at the end of the day, in states asserting their sovereignty, they can for the most part take their own lead on policy issues, no matter the preference of the federal government. Can you give us some examples on this?
Carlos Gutierrez: Yeah. Again, they have authority over issues that tend to have a larger impact on our lives. So education, what Congress will do is appropriate money, and they may say, "We want schools teaching...", whatever, right? But at the end of the day, they can't force a state to do that. Now, what they can do is withhold funds and so they can incentivize or disincentivize states in acting a certain way. But education, criminal law, transportation, definitely health and welfare, environment, natural resources, again, property law, there's this tension between the states and the federal government.
I mean, if you look at, for instance, marijuana legalization, there's some states that have chosen to make it legal for medicinal purposes, even for recreational use, while the federal government still considers it to be illegal. So states have the authority to pass their own laws reflecting the will of their own constituents, while the federal government maintains its power to regulate and enforce federal powers across the states. States do a lot more activity around policy that will have an impact on your daily lives than what you really see out of Congress.
Allegra Bartscherer: Walk me through it. Why does it matter? Why should we be so invested in, say, what's happening in Vermont, or Illinois, or Minnesota? What's the significance?
Carlos Gutierrez: Well, you know that commercial about Las Vegas, what happens in Vegas tends to stay in Vegas?
Allegra Bartscherer: Uh-huh.
Carlos Gutierrez: It's the complete opposite in [inaudible 00:06:36]. State capitals, as I said earlier, are innovation labs. They like to experiment, they like to try things. Sometimes those experiments fail, other times they become so popular that Congress follows their lead. So they act as this policy diffusion, if you will. Transfer of ideas and practices from one state to another, that's very common. So what happens in one of those states, you can bet is going to get passed on to another state.
Same-sex marriage for instance, that first passed in Massachusetts, and Vermont as well, and California, and then the federal government legalized it via the Supreme Court years later. Romneycare in Massachusetts was passed in 2006, that became Obamacare in 2010 for the entire country. And even today, you see states acting on minimum wage laws, for instance, California, New York and Washington, and due to that, there's now a broader discussion going on on Capitol Hill if it's time for them to follow suit.
So states do things and then they copy each other, and I think that's why we should really pay attention. When a state does something, you can bet others are going to try to copy. Once you have 10, 15 states that have acted on something, particularly if it's California, our largest state, and if it were on its own, it would be the fourth-largest economy in the world, or Texas, or New York. There's a lot of population in those states, and once they do something, it by default sometimes becomes national policy. So if you're asking me, that's why I would pay attention, because what happens in a given state can easily spread.
Allegra Bartscherer: So obviously, there're 50 states, but let's be honest, you can't possibly be in two places at once, unless of course you've got a hidden superpower we don't know about, which quite frankly, I'm not totally convinced isn't true. But what's the legislative calendar look like? I imagine it keeps you and your team really busy. Do they meet year round? All at the same time? How's that work?
Carlos Gutierrez: It is, it is really, really busy. And again, that's something that I really like about the job. But thankfully, not all states meet at the same time. Most states will meet at least for a portion of the time every year. There are other states, my home state of Texas, for instance, they meet only once every two years for five months. So during that five months, it is rapid, it is fast, it is really, really fast-paced. Other states, like Michigan and Massachusetts, they meet year round, so it's a mixed bag. But I can tell you, between January until about May, mid-June, it is incredibly busy.
This year, I can tell you CHPA monitored 3,500 bills in the first six months of the legislative sessions.
Allegra Bartscherer: Geez.
Carlos Gutierrez: That is actually the most we've tracked in about 15 years, so it is a record, about a thousand more than we tracked last year. So with all 50 states meeting, gives you an idea of how much legislation is being produced. Even though only about 20% of bills that are filed actually make it into law, you still have to pay attention to them, right? And so needless to say, I get a lot of air miles, I get a lot of hotel points, because between January and June, it's a really, really busy time.
Allegra Bartscherer: Well, let's back up for just a second here. What exactly is CHPA monitoring out there in the states?
Carlos Gutierrez: It runs a gamut. Again, another reason I think working at CHPA is so exciting, because we're not just stuck in one area of policy. The breadth of our issues have really expanded, particularly since CHPA 2020. That's when we began to do work outside of just simply the over-the-counter medicine space and actually also get into dietary supplements and consumer medical devices.
I guess if I was to categorize it on issues, I'd say ingredient defense is a major one. That's basically protecting key ingredients within consumer products. Chemical restrictions is another area that we work on heavily. That's any sort of limitation on, or impact of chemical restrictions in products. And tax issues. A lot of over-the-counter medicines are unfortunately taxed by states, and part of our mission is accessibility and affordability of our products. We think if you remove taxes, they become more accessible and more affordable to citizens across the country. But I think, of late, what's really got the vast majority of our attention has been issues related to the environment, believe it or not. Even though we're in the healthcare space, and healthcare policies are our primary area, of late, we've had to really get into environmental issues, have taken a lot of our time.
Allegra Bartscherer: I assume when you're talking about environmental issues, the sustainability is a big cornerstone of what it is that you're seeing out there in the states. So can you talk a little bit more about what those issues are? I assume that, obviously, packaging, shipping, things of that nature, but what else? Can you go a little bit deeper into how sustainability issues at the state level are affecting the consumer healthcare industry?
Carlos Gutierrez: Yeah, for sure. And it's all of the above, you mentioned all the right issues that we're dealing with. As I mentioned earlier, states are the laboratories, right? They're going to try things, try and address issues, particularly environmental issues. Because there is a sense among states that the EPA and the federal government have failed on this issue, and so they think, "We need to lead". If the federal government's not going to do something about water pollution, or water contamination, or air pollution, what have you, they are trying things. So we deal with pollution and water contamination, we deal with pharmaceutical waste, obviously, in the environment, one of the reasons why they want drug take back in some states, chemical exposures, waste generation from plants and such, and even sustainable sources.
So for a CHPA member, this would translate to drug take back mandates, like you said earlier. There's six states that have laws on the books that mandate pharmaceutical manufacturers pay for and maintain a drug take back program in those states. Extended producer responsibility for packaging. Extended producer responsibility, also known as EPR basically just says that you, as a manufacturer of a product, are responsible for the life of that product, from creation of it to the delivery to the consumer, and even after the consumer is done with it, that you still have a responsibility to figure out a way that that gets properly disposed of. There's post-consumer recycled content and packaging. So there's been state bills that want to mandate how much of your packaging should be made of recycled material.
As I mentioned earlier, there's this tension between state and federal government. The federal government has told us the opposite at times. The FDA has given us guidance before that in dietary supplements, for instance, you are to use virgin plastic only, no recycled plastic, but then you have states wanting to mandate the opposite. There's PFAs, and that's just an acronym for what folks call forever chemicals, that are really, honestly, are found everywhere in a lot of products, whether it's a consumer healthcare product, whether it's the water that you're drinking daily. There's been some recent research to suggest that those could be carcinogenic and harmful to people's health, so there's been some work on that. We don't typically get caught up in that, but we got to pay attention to it.
And then lastly, even labeling restrictions. Even being able to call, you know the chasing arrow symbol that you can see in a lot of bottles that you buy?
Allegra Bartscherer: Yeah.
Carlos Gutierrez: Basically just says that this bottle is recyclable. Many states are wanting to regulate that a little better, because while it may be recyclable, they want to make sure that it's recyclable within their state.
Allegra Bartscherer: Interesting.
Carlos Gutierrez: So if you're in Maryland, for instance, that plastic bottle you're carrying that you bought wherever you bought it, might be a recyclable plastic, but they're not doing that type of recycling in the state of Maryland, so they're wanting to change even some of the labeling within our products. So it's vast, we're working on a lot of environmental issues. By far it's our biggest issue right now.
Allegra Bartscherer: Well, I know that you and your team are really focused at the task at hand, which I want to circle back on how you guys monitor all of that, but with an eye always focused a little bit on the future, what do you see as the next challenge? What are the emerging issues that are coming down the pike that the consumer healthcare industry should be keeping an eye out for?
Carlos Gutierrez: I think one of the things that's really concerning us, and this has always been the case, it's always been there, but we've really seen it become much more profound of late, and that's this growing distrust of federal regulators by states. And it's on both sides of the aisle, the far left and the far right are questioning whether the FDA is doing its job, or the EPA is doing its job. Even though they have the expertise, the scientists, et cetera, the resources to actually figure out if something is a contaminant or is safe to consume, states, which typically don't have the resources or the expertise to determine that, are nonetheless trying to get involved in that.
What we're seeing is that rather than taking their guidance from the FDA or from Congress, they're just skipping over them and look into Europe. Europe is a lot more progressive on issues, they also have a very different standard. I like to say, "In America we use science." You've got to have evidence that something is bad, and if you have that evidence, then you act on it. In Europe, it's much more the precautionary principle. It's, "We don't know if it's bad, and therefore we're going to act on it, because we just don't know." And that has a really large impact on whether or not a medication, for instance, is going to be affordable, or how accessible it's going to be.
So we had an issue come up recently about titanium dioxide. It's a colorant, and I didn't know much about this until I was exposed to the issue, but it's a colorant that manufacturers use to, whether it's in dietary supplements or in medicine, to repel UV rays, and it helps protect the integrity of the product that people are going to consume. Really, really important. It's basically what whitens a medication, or what have you. Well, Europe decided to ban that substance, and FDA looked at the data that Europe used and decided, "No, we still think it's safe to use." Well, states didn't care, and we saw a couple of states this year look to try and ban that ingredient. So I think if I was to say what's emerging, that's what really has us worried, is this distrust of the expertise of the federal government, and states just making their own choices on really, really important matters.
Allegra Bartscherer: That's a lot to monitor, and I know how quickly it moves at the state level, so again, how do you guys keep track of everything? How do you keep a finger on the pulse?
Carlos Gutierrez: Well, yeah, thankfully we have a lot of tools. Obviously, every state has a legislative website, we monitor those. We have our own legislative tracking service, that also helps us. And then I'm on several email subscriptions, news alerts, you name it. But bottom line, we also have a really great team. It's not just me, we have Robbie McLuckie on staff, who handles most states east of the Mississippi River. We have Kennedy Solomon, who handles most of the states west of the Mississippi River. So we can sort of divide and conquer.
But I think one of the things that differentiates CHPA, and I'm honestly just very thankful for, is that a lot of trade associations in Washington DC tend to be very federally centric, all their resources are on what's going on the Hill. CHPA, one of the things that attracted me to them was that they put just as much emphasis on what's going on in the states. Our members are heavily engaged on what's going on in the states, and so I love that. I think that we're one of the few trade associations around town that really put a lot of emphasis on state government affairs, and so really proud to be part of this team. But again, like I said earlier, needless to say, we are on planes early and often, and when there's a hearing, we try to be there in person to testify and put our best foot forward in representing our membership.
Allegra Bartscherer: That segues nicely into my next question was... I mean, obviously it's important for citizens to be engaged and to know what's happening in their states, but also for companies like our manufacturer members that belong to CHPA, what's your advice to them? How can they get engaged? And can they pick up the phone and call you when there's an issue that they're seeing that directly affects them, that perhaps maybe we're not currently so focused on?
Carlos Gutierrez: Yeah. There's an old saying in politics that says, "You're either at the table or you're on the menu", and it's totally true. If you're not engaged on an issue, they're going to attack the industry, or the person, or the interest that isn't there to defend themselves. So first and foremost, if you're a member of CHPA, I think that's a great start. You have professional staff here that will represent you in state capitals, it's essentially your government affairs team in Washington DC while you've got better things to do, you're operating a company and are very busy. So that's, I think, the first thing.
The other thing I would say is leverage your place in the state economy in which you are. You're a job creator, you have employees, you contribute to the economy, leverage that with your lawmakers. Introduce yourself to your local senator, your local house member. Make sure that you've got their cell phone number, they know who you are, you're a player in the local economy, and then at the appropriate time, use that as leverage. If you've got a facility in a district, and there's a bill that's going to impact you one way or the other, you need to make your voice heard. Either through us, and we're happy to work with you in that way, or even if you just want to do it on your own.
I can tell you that our phones are always open, our doors are always open. For anyone that's a CHPA member, if you have an issue, no matter how big, no matter how small, no matter where it is, let us know, and usually I think we can figure out a way to tackle that issue and hopefully come to a decent resolution for you. But I think the key is be engaged, whether it's through CHPA, even another trade association, or on your own, don't just sit back and be a passive citizen, you really got to be engaged with your local government.
Allegra Bartscherer: Piggybacking off of that, can you touch a little bit on how being engaged with CHPA, being engaged with your local government, the value in also being engaged with other CHPA members, where you're able to share in some of those challenges that both companies might face, or those shared opportunities to be able to push something through, what's that collaboration like between CHPA members?
Carlos Gutierrez: Strength really is much better in numbers, right? So you may have an issue in a random state, let's just say it's Arizona, and when you're part of CHPA and you're engaged in, say, our state and local government affairs committee, or you hear of an issue on our newsletter, we put out a newsletter every week on everything that we're tracking around the country, it spurs interest by other members. You may have a very similar issue to two, or three, or four other manufacturers. Once we have that, we can really use that in going to a lawmaker and explaining how this policy, this idea, this bill that they're considering really does have an impact on employers and employees, and even more so on perhaps affordability of healthcare in the state.
I always tell people, lawmakers, they're usually experts in one area. We elect our neighbors, so if you elect a teacher, that teacher probably is going to have a really strong sense of education policy, but they're not going to know about healthcare policy, they're not going to know about environmental policy, they're generalists. It's up to us, either as lobbyists or as a citizenry, to educate them about an issue. I think that's the great thing about trade associations, is that you have like voices come together on important issues, you're able to relay important information, or how some sort of policy change will impact you, and it has a difference.
I can tell you when we've had members call us and tell us they tried individually to go and get a policy change, or reach out to a local mayor, whomever, and they get the runaround. Then when we try to reach out with a formal letter with our logo at the top, and they have to pay attention because they know that it's not just one individual trying to get ahold of them, but it's an entire industry. So I think there's a lot of benefit to being part of a trade association. I obviously think very highly of CHPA, and again, encourage any manufacturer to not only join, but to be active and utilize us, put us to work.
Allegra Bartscherer: I love it. You heard it here. Get engaged, stay involved, make a difference. Carlos, thank you for your time today. It's been a great conversation. I think what's clear is from education and healthcare to infrastructure and economic growth, state governments, you guys play a pivotal role in shaping the future we desire. The laws enacted, the budgets allocated, and the leaders we elect directly impact the communities we call home. Thanks for joining us for this edition of CHPA Chat. Till next time.
Speaker 1: Thank you for joining us here at CHPA Chat. For more information, and to hear our entire catalog of shows, please visit chpa.org.
The views expressed in this podcast are solely those of the speaker and do not necessarily represent the opinions of the Consumer Healthcare Products Association.