Drug Benefit Is ‘Working,’ PhRMA Official Says
"Changing the Medicare prescription drug benefit based on inaccurate and misleading information will only hurt beneficiaries," Ken Johnson, senior vice president of the Pharmaceutical Researchers and Manufacturers of America writes in a Chicago Sun-Times letter to the editor. Johnson's letter is in response to a Nov. 17 Sun-Times editorial that suggested the federal government be allowed to negotiate prices with the pharmaceutical company for the Medicare prescription drug benefit.
According to Johnson, in countries where "governments set prices, medicine formularies are restricted and patient choice disappears." He adds that some countries, such as Canada, threaten "compulsory licensing" when setting prices for U.S. drugs. Johnson says this practice "allows a foreign government to seize a pharmaceutical company's patent rights -- its intellectual property -- unless its price demands are met."
In addition, Johnson writes that the Department of Veterans Affairs' "drug plan is not a useful model" for the Medicare drug benefit because it "serves a small patient population, has a restricted formulary and relies on a limited number of VA pharmacies." Johnson notes that HHS data show that as many as 40% of Medicare-eligible veterans opted for the Medicare program instead of the VA program.
The editorial's claim that drug companies spend more on advertising than research "is simply wrong," Johnson writes, adding that research and development investments "far outpace promotional expenses."
Johnson writes that the "market competition in Medicare Part D is working," as 38 million U.S. residents have drug coverage and are saving $1,200 on average annually, according to CMS. He concludes that many surveys indicate more than 80% of beneficiaries are satisfied with their plans, adding, "Even politicians understand those numbers" (Johnson, Chicago Sun-Times, 11/28).