LOBBYISTS: Debate Over Prescription Drugs Creates Unusual Enemies
The current debate over prescription drug benefits not only divides Democrats from Republicans, it pits two large, influential lobbies against one another -- the Health Insurance Association of America and the Pharmaceutical Research and Manufacturers of America, the New York Times reports. For several months, the pharmaceutical industry has been arguing on Capitol Hill and in broad advertisements that private insurance companies should offer prescription drug benefits. In a recent advertisement, the pharmaceutical industry argued that the Democrats' proposal to add a prescription drug benefit to Medicare "would hurt the industry, slow research and ultimately harm patients."
Allies No More?
However, the insurance industry, normally an ally of the Republican Party, has voiced objections to the GOP plan, which relies on insurance companies to offer prescription drug benefits. Even though the GOP plan would offer insurers subsidies, HIAA officials argue that private companies would face difficulties offering an inexpensive product and making a profit while drug prices keep climbing and the elderly, who take the most medications, would be purchasing the coverage. Chip Kahn, president of HIAA, testified before a House committee earlier this month, "We do not believe that private drug-only insurance is a viable concept given the substantial economic and regulatory barriers and problems with adverse selection that would face such a product." Democrats say that the insurance industry's resistance proves that the GOP plan is unrealistic. "This really shows the GOP drug plan to be a mirage," Ronald Pollack, executive director of Families USA, a health care advocacy group, said, adding, "It looks good from a distance, but there's very little there. Notwithstanding the fact that the GOP bill would provide huge subsidies to insurance companies, the insurance companies are still saying, 'We're not going to offer these policies.'" But PhRMA officials counter that a privatized plan would work, since, as PhRMA Executive Vice President Judith Bello testified, the insurance industry has already created private policies for "cancer, sports accidents, emergency room visits, pregnancy complications and campers."
John Feehery, a spokesperson for House Speaker Dennis Hastert (R- Ill.), said that the GOP plan "will create a huge pot of money that the private market will want to get involved in. The fact is, this is a great benefit for seniors and we've already had some movement from the private sector that they will be interested in it." But critics point to Medicare+Choice, the last major effort to privatize health benefits. Rep. Benjamin Cardin (D-Md.) contended that the plan "by anyone's analysis has not worked" and points to the large numbers of private HMOs that have pulled out of the Medicare program because of its unprofitability (Toner, 6/25).