MEDICARE Rx: Drug Makers Drop Opposition to Coverage Plan
Pharmaceutical companies have dropped their fierce opposition to a Medicare drug coverage plan, the New York Times reports. The industry was previously against the plan because of fears that the federal government would set drug prices. But drug company CEOs Thursday asked the White House for a "cease-fire in their war over drug prices" and stated "unequivocally" that they wanted to work with the president and Congress to institute Medicare coverage of prescription drugs this year. Raymond Gilmartin, chairman of Merck & Co., said, "If properly designed, such legislation could get medicines to people who need them without controlling drug prices." In a joint interview, both Gilmartin and Gordon Binder, chairman of Amgen, appeared "slightly nervous" and worried that President Clinton might assail the pharmaceutical industry in his upcoming State of the Union Message on Jan. 27. "If very important people in America say bad things about the industry, that's harmful to us," Binder said. Tired of being demonized by the White House and wanting to set a "constructive, pragmatic and positive tone" for the coming debate on Medicare drug benefits, both executives believe that a government coverage plan is inevitable and want to "make the best deal possible."
If enacted, a Medicare drug plan would make the federal government the nation's largest purchaser of prescription drugs. The government would reimburse private entities, such as insurance companies and pharmaceutical benefit managers, who in turn could buy drugs and negotiate discounts on behalf of beneficiaries in the fee-for-service program. The President's proposal would pay half of a beneficiary's drug expenses, up to certain limits: the maximum would start a $1,000 a year and would rise incrementally to $2,500 in 2008. In a series of negative advertisements geared toward derailing a Medicare prescription drug plan, drug makers last year attacked the proposal featuring an arthritic Medicare patient named " Flo". Gilmartin now admits, "It's important now for Flo to also be for something positive" (Pear, 1/14).