MEDICARE Rx: Clinton Blasts Drug Industry, Calls For Study
President Clinton blasted the pharmaceutical industry yesterday for telling "flat-out falsehoods" about his Medicare prescription drug proposal. "We cannot stand by and watch the pharmaceutical industry go on and distort this debate," he said at a White House news conference (Hunt, AP/Philadelphia Inquirer, 10/26). Accusing drug companies of "distorting" his plan through a series of misleading advertisements, Clinton noted, "Old Flo's up there arguing for keeping 13 million seniors, just like her, from having any access to any drugs. [I bet] she wouldn't be making that ad if she had found herself in the same position. ... I wish they'd spend this ad money explaining why seniors have to get on the bus and go to Canada to buy drugs less than half the price they can buy them in America" (Gerstenzang, Los Angeles Times, 10/26). In an effort to "set the record straight," Clinton reiterated earlier promises that the drug benefit would be "purely voluntary" and would not lead to a "big price control system" (White House release, 10/25). He also ordered a 90-day HHS study of seniors' prescription drug costs and announced that he will preserve one-third of the non-Social Security budget surplus over the next decade to shore up and overhaul Medicare. The provision, included in the Social Security legislation he plans to send to Congress today, would set aside $374 billion over 10 years, the Wall Street Journal reports (McGinley, 10/26).
Pushing Reform This Year
Clinton also used yesterday's event to put pressure on Congressional Republicans to institute a drug benefit this year. Lamenting a recent GOP decision to forgo Medicare reform in 1999, he said, "Unfortunately, the Republican leadership in Congress has refused altogether to consider adding a prescription drug benefit, effectively rendering meaningful Medicare reform impossible this year" (Hunt, AP/Nando Times, 10/25). He added, "Asking [the elderly] to wait for Medicare reform is like putting their lives on hold and maybe into a lottery. ... It is unacceptable especially because it is so unnecessary." House Ways and Means health subcommittee chair Bill Thomas (R-CA) called Clinton's charges "cynical and politically manipulative," declaring, "After the president's talk today we should all be concerned because the president offered 'good' politics and proved once again how infrequently he associates with the truth" (Mathis, Houston Chronicle, 10/26). According to Thomas, Clinton's plan would cost $50 billion more than White House estimates, and "Medicare premiums will double, ... [s]eniors currently with drug insurance will lose coverage" and the program will remain rather weak, as the "president's proposal to strengthen ... [it] is more perceived than real." Thomas said, "[A]n expensive new benefit may do more harm than good if it risks bankrupting the entire Medicare program. Republicans are committed to providing prescription drug coverage to low-income seniors who need it most while protecting all seniors from higher premiums and more out-of-pocket costs" (House Ways and Means release, 10/25). Rep. Bill Archer (R-TX), chair of the House Ways and Means Committee, agreed with Thomas' analysis. Citing a PricewaterhouseCoopers study, he said that "50% to 75% of employers would drop or limit their prescription coverage if Clinton's plan were enacted, eliminating drug insurance for up to nine million beneficiaries" (Los Angeles Times, 10/26). But Clinton remained undeterred, declaring, "I don't intend give up the battle until it is won" (White House release, 10/25).
Groups on all sides of the debate have weighed in with reaction to yesterday's news conference and Clinton's plan. The following is a sample:
- Timothy Ryan, executive director of Citizens for Better Medicare: "[Our advertisements'] clear message has always been to expand prescription drug coverage to seniors. ... [T]he real question is ... do we protect and expand the good private coverage that most seniors have, or do we undermine that coverage and effectively push seniors into a big government plan? It's a false debate to argue that it's the White House plan or nothing" (CBM release, 10/25).
- Council for Citizens Against Government Waste: "President Clinton is proposing a huge new bureaucracy for what is really a relatively small problem. ... [T]here is no need for a new universal entitlement program. The President's plan is indeed a Siren's Song ... [that] will eventually destroy private insurance coverage for seniors' drugs" (CCAGW release, 10/25).
- AARP: "[P]rivate sector drug coverage is often inadequate. ... Designing a drug benefit that protects those currently in need and those who will face substantial costs in the future will require coverage for all beneficiaries as well as adequate financing" (AARP release, 10/25).
- Carol Jimenez of California Health Advocates: "The private marketplace is not meeting and has never met the prescription needs of older and disabled Americans. Medicare managed care is clearly not the solution to the prescription drug problem that many hoped it would be."
- Vicki Gottlich of the National Senior Citizens Law Center: "Congress has got to step in. People with Medicare need their medications. They can mean the difference between life and death" (Medicare Rights Center release, 10/25).
- Alan Holmer, president of the Pharmaceutical Research and Manufacturers of America: "Our view is that America has the best health care system in the world and we don't want to copy the Canadian system with its rationing of health care, its limits on access to medicines and its waiting lines that are often three times longer than in the U.S." (AP/Philadelphia Inquirer, 10/26).
- New York Times: The pharmaceutical industry's "new ads are trying to raise groundless fears that government is going to take over everyone's medicine cabinet, which is far from what the Clinton proposal would actually do. ... [Although] the plan falls short of providing complete drug coverage ... it is an important step toward making access to drugs more affordable for 13 million Medicare beneficiaries who now have no drug coverage" (10/26).
Getting the Facts
Two recently released studies, however, indicate that the whole brouhaha over a drug benefit may just be a case of blowing smoke. The National Center for Policy Analysis reports that "many complaints about drug prices are based on a misunderstanding of how the prescription drug market actually works." According to the report, "Although some drug prices are lower in Canada ... on the average, drug prices in Canada, Germany, Switzerland and Sweden are higher than prices in the U.S." In addition, while many believe that drug prices are rising, "the average price of drugs has increased modestly -- only 3.2% in 1998 ... Overall spending on drugs is increasing primarily due to non-price factors -- people are buying more drugs and newer, more expensive drugs" (NCPA release, 10/25). A second report from the American Enterprise Institute indicates that "congressional reports [on drug prices] ignore inconvenient evidence and, as a result, grossly overstate the price differences that they decry" (AEI release, 10/4).