Senate Democrats Propose Another Measure Aimed at Reducing Prescription Drug Costs

The Senate Democrats' prescription drug task force yesterday unveiled the "fourth in a series of measures" intended to address the cost of medications, CongressDaily reports. The bill, sponsored by Sen. Debbie Stabenow (D-Mich.), the coordinator of the task force, would allow states to extend the discounts on prescription drugs they receive under their Medicaid programs to non-Medicaid beneficiaries. Stabenow told reporters that the bill aims to "give states the flexibility to set up programs to pass along (drug) discounts under Medicaid to others" and would nullify legal challenges to programs such as those in Maine and Vermont. The task force earlier announced measures that would make it easier for generic drugs to enter the market and to reimport U.S.-made drugs from Canada, as well as legislation that would limit the tax deductions drug makers can take for marketing costs (Rovner, CongressDaily, 5/16). Democrats say that in order for a Medicare prescription drug benefit to be economically viable, Congress first must act to reduce drug prices, which rose 17% last year (California Healthline, 5/8).

Meanwhile, House Republicans continue to work on their Medicare reform package, which includes a drug benefit, but they have said it might not be "unveiled until the week after Congress returns from the Memorial Day break," CongressDaily/AM reports. According to Rep. Richard Burr (R-N.C.), to focus on the drug benefit, Republicans are considering dropping provisions in the package that address payments to Medicare providers. Burr said, "A lot of the provider issues, if they're not part of something now, there's a commitment they will be part of a September fix." But House Ways and Means Chair Bill Thomas (R-Calif.) and Ways and Means health subcommittee Chair Nancy Johnson (R-Conn.) said they expect the provider provisions to remain in the bill (Rovner, CongressDaily/AM, 5/17). Thomas and House Energy and Commerce Committee Chair Billy Tauzin (R-La.) had hoped to include clarification language in two unrelated fiscal year 2002 supplemental appropriations bills, saying that HHS has the legal authority to correct what Republicans call a statistical error in the Medicare physician reimbursement formula. The formula resulted in a 5.4% reduction in physician reimbursements this year and will lead to reductions of 17% by 2005 (California Healthline, 5/15).

However, the main problem House Republicans face with their Medicare reform package is its cost, Urban Institute senior researcher Marilyn Moon said during a briefing sponsored by the Alliance for Health Reform. The House GOP package would cost $350 billion over 10 years, an amount unlikely to address the full cost of seniors' drugs, she added, noting that the Congressional Budget Office has projected that beneficiaries will spend $1.8 trillion on drugs over the next decade. Moon said, "It is difficult to develop a snazzy benefit that pays 23% of costs" (Rovner, CongressDaily/AM, 5/17). Meanwhile, Families USA yesterday released a report, endorsed by Democrats, stating that the House GOP's plan to use private insurers to deliver a Medicare drug benefit would be ineffective. "Relying on private insurance companies to deliver drug coverage for Medicare beneficiaries -- rather than incorporating a drug benefit into the Medicare program -- virtually guarantees that coverage will be uneven in availability, cost and value," the report said (CongressDaily, 5/16).