MEDICARE: Prescription Benefit Prospects Are Bright

      President Clinton hailed drugmakers' apparent willingness to compromise on a Medicare prescription benefit this weekend, calling it "a very good first step." He added, "Now what we need is positive actions from the drug companies and positive action in Congress" (AP/Newsday, 1/15). Clinton said that "he's not going to let them dodge questions about high drug prices," adding, "I think what they're worried about is the fact that if the government becomes a big buyer that we'll be able to bargain for lower prices at greater volume. I don't think that's a bad thing. I think what they ought to do is come sit down with us and see if we can agree on a common approach" (Love, AP/Arkansas Democrat Gazette, 1/15). The drug manufacturers appear to be taking the first steps toward an agreement, as they will meet with White House Chief of Staff John Podesta Thursday and began unveiling new ads today featuring "Flo," the senior citizen who once complained, "I don't want big government in my medicine cabinet." Flo now encourages seniors "to urge Washington to put politics aside and join hands" (Kiely/Ulklmann, USA Today/Detroit News, 1/17).

Congress Moving Forward
      At the same time, "congressional Republicans now appear much more anxious to embrace the issue in a crucial election year, in which control of the House and Senate is at stake, and they are readying a plan of their own," the Washington Post reports. Rep. Thomas Davis (R-Va.), chair of the National Republican Congressional Committee, said, "We're not doing it because Democrats are making it an issue; we're doing it for the American people." In June, Clinton had proposed a plan of his own that would cost $118 billion over 10 years beginning in 2002 and would pay up to half the cost of patients' drugs in exchange for a monthly fee. When fully phased in 2008, seniors would pay $44 monthly, while the government would kick in up to $2,500 annually. In contrast, the GOP plan could include a combination of tax reductions and state block grants. The plan would be targeted to seniors near or below the poverty line, while Clinton's plan would offer benefits to any senior who wanted to participate. Senate Majority Leader Trent Lott (R-Miss.) said, "I don't know exactly how we get to the prescription drug thing because the administration wants to give everyone free drugs. It's not affordable, and it weakens the Medicare system." The Democrats "are likely to resist the GOP's more narrow proposal because it targets only some seniors and bypasses the Medicare system," the Washington Post reports. House Minority Leader Richard Gephardt (D-Mo.) said, "My attitude is we're willing to compromise, we're willing to find common ground." He added, "The devil's in the details, but I think we have a fighting chance to get this done this year. I think the pharmaceutical companies are sensitive to this issue and the Republicans are hearing it from their constituents. I think this thing has tremendous political attractiveness" (Babington/Eilperin, 1/15).

Skeptics
      Not everyone is as optimistic. Marty Corry, lobbyist for the AARP, said, "The outlook for Medicare reform in 2000 remains almost as cloudy and overcast as before the statement put out by the pharmaceutical industry" (AP/Arkansas Democrat Gazette, 1/15). Chip Kahn, president of the Health Insurance Association of America (HIAA), said, "Mandated private insurance coverage won't work for seniors. HIAA believes that there's got to be a better way to assist seniors who need help affording the cost of expensive prescription medication." HIAA has proposed tax credits, federal money for state drug purchase programs and equitable funding for Medicare HMOs. Kahn added, "We encourage the pharmaceutical industry to work with us to achieve our common goal; to provide immediate, effective assistance to seniors who need help purchasing their medicines" (HIAA release, 1/14).

Protect Drug Companies
      There's a good chance that Medicare reform "will fall prey to politics," columnist Ted Bunker writes in the Boston Herald. He asserts, "Democrats see a potent issue to help them regain control of Congress. Republicans, now with the industry's blessing, are scrambling to defuse the issue by offering a plan of their own. Let's hope that the 39 million people on Medicare don't get lost in the political shuffle." Bunker argues that "what could wind up buried in the political hay is the remarkably productive labs run by drug companies." He writes, "Price controls would squeeze out investment capital and shut off the flow of new drugs. No one, least of all health care providers or the elderly, should encourage that outcome." Bunker defends the drug industry, maintaining that drug and medical device innovations "have helped to cut overall costs of medical care, while helping to lengthen normal life expectancies for us all." Bunker concludes, "As Washington takes aim at this issue, all sides should remember that a cure can be worse than the disease. Drugmakers need profits to keep developing medicines that save both money and lives" (1/17).