CQ TODAY PRINT EDITION
July 14, 2008 – 7:10 p.m.
Proposed Medicare Requirements Under Fire
By Drew Armstrong, CQ Staff
Administration officials and some Republicans say a little-noticed section of a Medicare bill could open the program’s drug benefit to lobbying and political influence by drugmakers and patients’ groups.
Democrats say the concerns are overblown and politically motivated, designed to affect override votes that appear imminent in the House and Senate.
President Bush will veto the recently cleared Medicare bill (
Both chambers are expected to produce the two-thirds majorities that will be necessary to override Bush’s veto.
The provision in question would affect the Medicare drug benefit, known as Part D. Currently, for all but a few types of drugs, the private drug plans that administer the benefit decide what drugs they will include for coverage and which ones patients have to pay extra for. By including some drugs and not others, the plans force drugmakers to offer lower prices in cases where similar drugs are available.
But in six key disease categories — anti-retroviral AIDS drugs, antipsychotic medications, immunosuppressing transplant drugs, anti-cancer chemotherapy drugs and anti-convulsant drugs to treat seizures — regulations already require the drug plans to cover almost every drug in those categories.
However, the Medicare bill would give the Health and Human Services Department (HHS) authority to require coverage of more drugs beyond the six current categories — any drug for which there would be “major or life threatening clinical consequences” if it were not included and if patients need access to several different types of similar drugs.
Politicizing Medicine
Critics of the provision say that by opening up new types of drugs to such protections, costs for drug plans — and, by extension, for taxpayers and patients — will also rise.
In the past, drugmakers and patient advocacy groups have teamed up to push Congress or the administration for more research dollars or access to new drugs.
The fear is that if new authority is given to HHS in regard to the drug benefit, then the department and its Centers for Medicare and Medicaid Services would come under intense lobbying pressure to expand the range of drugs covered by Medicare.
“It ... politicizes Part D — it would give a drug manufacturer the ability to come in and lobby for coverage of a category, and then lobby for the coverage of a drug,” said Peter Ashkenaz, a spokesman for the Centers for Medicare and Medicaid Services (CMS).
The White House slammed the provision as well, during the Monday conference call. “This new bill is basically politicizing drug benefits by pressuring the secretary of Health and Human Services to expand the drugs under protected classes,” said Tevi Troy, the department’s deputy secretary.
Proposed Medicare Requirements Under Fire
The provision’s supporters disagree, saying that the administration’s concerns are unfounded and that the bill language is strict enough to keep a tight rein on adding new drugs to the protected list.
An aide to Senate Finance Committee Chairman Max Baucus , D-Mont. — who first introduced the language — said it requires the administration to justify any expansion of protected drugs through a formal rule-making process.
The Baucus aide also said the language would help firm up protections for the already-protected drugs, instead of leaving patient groups and physicians wondering if the administration would take some drugs off the protected list or fail to renew their protections each year, as they must do now.
The aide said the provision was requested by advocates for low-income Medicare and Medicaid patients. Several interest groups that focus on particular diseases also asked for the provision, said the aide.
One Senate aide suggested that the administration was trying to gin up controversy in order to pull back Republican senators who voted for passage of the Medicare bill on July 9.
The Cost of a No-Cost Provision
In the Congressional Budget Office’s analysis of the bill, analysts said there would be no cost to the provision.
But administration accountants disagree. The CMS Office of the Actuary, in an internal e-mail, wrote that “this provision would have a different impact than the existing policy and would very likely result in additional federal spending for the Part D program.”
According to the e-mail, CMS analysts believe “that both beneficiary advocacy groups and drug manufacturers would aggressively present any evidence they could ... in order to expand access to drugs and to provide greater inclusion of a manufacturer’s drugs in the Part D program.”
The language first appeared in Baucus’ version of the bill (
Letter-Writing Lobbies
Since then, the provision has provoked a flurry of letter-writing and hand-wringing by the drug plans in opposition. In June, the Academy of Managed Care Pharmacy, the Pharmaceutical Care Management Association, and the Rx Benefits Coalition all wrote to lawmakers opposing the provision.
The three groups represent the full spectrum of pharmacists, insurers, employers and drug plan administrators.
Proposed Medicare Requirements Under Fire
In one of the letters, the Pharmaceutical Care Management Association calls the policy a “ ‘give away’ to brand name manufacturers of prescription drugs by limiting the ability of pharmacy benefit managers... to negotiate discounts.”
The Pharmaceutical Research and Manufacturers of America, which lobbies for the drug industry, declined to take a formal position on the bill in a July 9 letter to Baucus.
Edward Epstein contributed to this story.
Comments
This flap is a red herring! The real reason for Bush's opposition is that the bill cut the huge overhead payoffs to the health insurance companies for providing supplemental policies: another example of corporate socialism. And the bill uses that saving to increase payments to physicians. The giant increases in health care costs directly result from letting the insurance companies put their snouts in the public trough - A single payer system is the only answer!
The whole Medicare D program is a $780 billion giveaway to the drug industry that funds the political campaigns. How best to do it? We already had a drug distribution system in place. It was called drug stores. Let patients go directly to the drug store and get their drugs, and let the drug store bill Medicare for the approved drugs. And let Medicare negotiate with the drug industry, as the VA hospital has to cut its costs by 50%. Our problem is that Congress is owned and operated by industry, all industry, and the most important change will be in the political system with public funding of campaigns. If politicians are to be beholden to their funders, those funders should be the taxpayers. Jack Lohman http://MoneyedPoliticians.net
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