MEDICARE: Drug Cos. Protest Pricing Plan For Seniors
The pharmaceutical industry is focusing in on a "little-noticed bill in Congress" that would allow Medicare recipients to purchase prescription drugs at the same steep discounts available to managed care plans and federal agencies, the Wall Street Journal reports. The provision, introduced by Rep. Tom Allen (D-ME) in September, would include seniors in the Federal Supply Schedule -- a group of 9 million favored customers who currently receive discounts of up to 60% on prescription drugs. The Journal reports that the "drug industry, one of the biggest-spending lobbies in Washington , greeted the proposal with an instant onslaught of opposition," claiming it would result in "40% or more of the U.S. pharmaceutical market [having] to be steeply discounted, or put under price controls." The Pharmaceutical Research and Manufacturers of America (PhRMA), within hours of the bill's introduction, released a statement calling it "[a] dagger pointed at the hearts of America's senior citizens." PhRMA argues that reduced profit margins from the "legislation would stunt vital research, add regulatory costs and ultimately harm the elderly by halting the development of promising drugs that could aid against the ravages of old age."
Playing The Game
The bill has drawn support from moderate Democrats and influential health care experts such as former Health Care Financing Administration head Bruce Vladek, who called the proposal "nifty" and said, "I think it is original, and it speaks to the major issues." Republicans have not been as enthusiastic. House Ways and Means Committee Chair Bill Archer (R-TX) said, "Anytime the government gets involved in price setting of drugs, it can have unanticipated consequences." Drug industry lobbyists are swarming Capitol Hill, trying to persuade the bill's 53 co-sponsors to withdraw their names. The Journal reports that the "mobilization ... is a case study of how the balance of power in the health care field is shifting in favor of the marketers of brand-name remedies." But Rep. Earl Pomeroy (D-ND), who has been visited by PhRMA lobbyists and plans to meet with pharmaceutical industry representatives, warned that voluntary pricing changes -- not campaign cash -- will be the determining factor. He said, "The effective response from the industry will not be in how many Gucci-shoed lobbyists they send to the Hill -- it will be the discussions in their boardrooms about their pricing policies" (Lagnado, 12/18).