Drugmakers Agree To Continue Assistance Programs

Six large pharmaceuticals companies have agreed to continue their patient assistance programs for low-income Medicare beneficiaries who are enrolled in the Medicare prescription drug benefit, Senate Finance Committee Chair Chuck Grassley (R-Iowa) said on Thursday after a closed-door session with executives from eight companies, CQ HealthBeat reports (Reichard, CQ HealthBeat, 5/11).

Grassley and Sen. Max Baucus (D-Mont.) invited the CEOs of several pharmaceutical companies to attend the session to discuss PAPs after some companies said they would end their programs because of concerns that they could violate federal anti-kickback laws that prohibit drug makers from steering beneficiaries toward their own products.

The companies cited a guidance document issued by HHS Inspector General Daniel Levinson in November 2005 that said PAPs potentially could be considered unlawful if, for example, drug makers arranged to pay for a beneficiary's prescriptions during the so-called "doughnut hole" in Medicare coverage only if the beneficiary agreed to use the manufacturer's product.

However, Levinson in April issued a new advisory opinion in which he clarified that pharmaceutical companies can legally operate PAPs that meet certain specifications (California Healthline, 5/9).

Four of the companies that met with Grassley and Baucus on Thursday -- Eli Lilly, AstraZeneca, Johnson & Johnson and GlaxoSmithKline -- announced in days leading up to the session that they will continue their PAPs for low-income beneficiaries in some form. Merck and Schering-Plough also have indicated that their PAPs will continue.

Grassley said executives from two of the eight companies represented at Thursday's session have not yet agreed to continue their PAPs.

According to unnamed sources, the two companies are Pfizer and Bristol-Myers Squibb, CQ HealthBeat reports (CQ HealthBeat, 5/11). Pfizer said in a statement that the company is "actively investigating a collective, multi-company approach for providing assistance" to low-income beneficiaries.

Meanwhile, Teva Pharmaceuticals and several other pharmaceutical companies have ended their PAPs for Medicare beneficiaries this year and have not yet reinstated them, the Chicago Tribune reports. According to the Tribune, three of four companies -- including Teva -- that manufacture treatments for multiple sclerosis have ended their PAPs (Chicago Tribune, 5/12).

Grassley said, "The drug benefit must not be used as an excuse for ending patient assistance programs." He added, "Many manufacturers have already agreed to continue their programs, and I'd like to see the rest promise by next week to do the same." Grassley said one of the remaining impasses is the issue of whether the costs of the medications will count toward the $3,600 in out-of-pocket spending beneficiaries must pay before "catastrophic" coverage begins and drug plans cover 95% of prescription costs (CQ HealthBeat, 5/11).

Under the so-called "doughnut hole" coverage gap in the drug benefit, beneficiaries are responsible for total annual drug costs between $2,250 and $5,100 -- or $3,600 out of pocket -- after which point drug plans cover 95% of prescription costs (California Healthline, 5/11).

Grassley said that if costs covered by PAPs do not count toward total annual out-of-pocket costs, it will extend the time it takes for those costs to reach the catastrophic trigger and lengthen time pharmaceutical companies pay for prescriptions. He said he believes the HHS Office of Inspector General will allow costs covered under PAPs to count toward the trigger.

A joint PAP proposed on Wednesday by five companies would allow the drugs covered under the program to count toward the trigger.

According to a Finance Committee staffer, the HHS OIG and the drug companies are in discussions about the proposal. The staffer said Grassley and Baucus would like drug companies to extend PAPs to beneficiaries with incomes between 135% and 150% of the federal poverty level, rather than just beneficiaries with incomes above 150% of the poverty level (CQ HealthBeat, 5/11).

Four newspapers on Friday also published articles examining issues related to the drug benefit. Summaries appear below.

• Baltimore Sun: Local governments are pledging "extra hours for phone help and one-on-one counseling" in a "final push" to enroll beneficiaries in Maryland, where 160,000 beneficiaries have signed up for the drug benefit and 200,000 beneficiaries remain without prescription drug coverage, the Sun reports (Salganik, Baltimore Sun, 5/12).
  
  
• Boston Globe: The Globe examines how three companies -- UnitedHealth Group, Humana and the Blue Cross Blue Shield New England Alliance -- "have emerged as the big winners" for enrollment of Medicare beneficiaries in Massachusetts (Krasner, Boston Globe, 5/12).
  
  
• New Orleans Times-Picayune: Rep. Bobby Jindal (R-La.) said the Bush administration confirmed on Thursday that Hurricane Katrina evacuees will be allowed to enroll in the drug benefit without a late-enrollment penalty for 63 days after May 15, but beneficiaries will have to pay a 2% penalty beginning the 64th day, the Times-Picayune reports (Walsh, New Orleans Times-Picayune, 5/12).
  
  
• Philadelphia Inquirer: The enrollment rate is "especially low" in Pennsylvania, where only 17% of the state's 397,000 Medicare beneficiaries have signed up for the drug benefit, the Inquirer reports (Schogol/Naedele, Philadelphia Inquirer, 5/12).

NPR's "Morning Edition" on Friday reported on the upcoming enrollment deadline. The segment includes comments from Diane Archer, founder of the Medicare Rights Center; HHS Secretary Mike Leavitt; CMS Administrator Mark McClellan; and Dan Mendelson, president of Avalere Health, a health care consulting firm (Rovner, "Morning Edition," NPR, 5/12).

The complete segment is available online in RealPlayer.

In addition, PBS' "Nightly Business Report" on Thursday included an interview with Michael McCallister, CEO of Humana, which has the second largest number of Medicare beneficiaries -- 18% of eligible U.S. residents -- enrolled in its prescription drug plans. McCallister discusses the company's premiums for plans and recent earnings (Dhue, "Nightly Business Report," PBS, 5/11).

The complete transcript is available online.