Latest Drugwonks' Blog
Conservative House Dems rebel on health care bill
By ERICA WERNER
Associated Press
WASHINGTON -- Conservative Democrats in the House rebelled against their party leaders Thursday, raising concerns about the cost of President Barack Obama's health care overhaul and seeking to put the brakes on legislation. The fiscally conservative Blue Dog Coalition planned to present a letter to House Democratic leaders asking for more time, members of the group told The Associated Press.
Democratic Rep. Mike Ross of Arkansas said that if the Democrats' liberal legislative plan came to the floor as proposed, an "overwhelming majority" of his group would oppose it. The Blue Dogs claim 52 members, so that could endanger the bill.
The move comes just as House Democratic leaders are trying to finalize the proposed legislation and unveil it Friday. Committees plan to vote next week and House leaders want to pass a bill before the August recess.
"We've just got a lot of questions and the top of the list would be how to pay for it," said Rep. Marion Berry, D-Ark.
Pushing to complete a comprehensive health care overhaul plan, House Democrats focused on an income tax surcharge on the highest-paid wage earners to help subsidize insurance for the 50 million people who lack it.
As discussed in the tax-writing House Ways and Means Committee, the surtax would apply to individuals with adjusted gross income of more than $200,000 and couples over $250,000, according to officials involved in the discussion. Most spoke on condition of anonymity because the talks were private.
Rep. Shelley Berkley, D-Nev., a member of the panel, said the panel is looking at a surtax of around 3.5 percent on income above those amounts. Other members suggested it would be closer to 3 percent.
In addition, key lawmakers are expected to call for a tax or fee equal to a percentage of a worker's salary on employers who do not offer health benefits.
Ways and Means Chairman Charles Rangel, D-N.Y., has said his committee needs to come up with $600 billion in new taxes to deliver on Obama's goal of sweeping changes to the nation's health care system to bring down costs and cover the 50 million uninsured. Hundreds of billions of dollars more would come from cuts to Medicare and Medicaid to pay for legislation expected to cost around $1 trillion over 10 years.
Lawmakers cautioned that no final decisions have been made. Smaller tax options remained possibilities, depending on the overall cost of the legislation, including a tax on sugared soft drinks and ending a tax break that drug companies receive for advertising.
In the Senate, Democrats edged away from their goal of passing health care legislation by early August amid heightening partisan controversy over tax increases and a proposed new government role in providing insurance to consumers.
Sen. Chuck Schumer, D-N.Y., told the AP he believes the "ultimate goal" is to have a bill by the end of the year that is signed into law by the president.
Separately, Republicans who met Wednesday with Senate Majority Leader Harry Reid, D-Nev., said he indicated he was willing to allow more time before legislation is brought to the floor.
Failure to meet the August goal would be a setback - but not necessarily a fatal one - for Obama's attempt to achieve comprehensive health care legislation this year. A group of Democratic and Republican senators led by Finance Committee Chairman Max Baucus, D-Mont., is still trying to work out a bipartisan deal.
But the Finance Committee work appeared to have suffered a setback when Reid relayed concerns to Baucus about the compromise taking shape. Finance's proposal was expected to omit a new government insurance option to compete with private insurers - something Republicans oppose but most Democrats favor. A leading contender to pay for the measure was a new tax on employee health benefits, which Obama campaigned against and many Democrats oppose.
Pelosi made clear Thursday that whatever the Senate comes up with, the House bill will have a public plan and will not tax benefits.
"We will not be taxing benefits, health care benefits in any legislation that comes from the House," Pelosi said. "And it will have, coming out of the House, a public option," she said. "The only debate on that is what it will be called: a patient option, public option. Write in your suggestions."
By ERICA WERNER
Associated Press
WASHINGTON -- Conservative Democrats in the House rebelled against their party leaders Thursday, raising concerns about the cost of President Barack Obama's health care overhaul and seeking to put the brakes on legislation. The fiscally conservative Blue Dog Coalition planned to present a letter to House Democratic leaders asking for more time, members of the group told The Associated Press.
Democratic Rep. Mike Ross of Arkansas said that if the Democrats' liberal legislative plan came to the floor as proposed, an "overwhelming majority" of his group would oppose it. The Blue Dogs claim 52 members, so that could endanger the bill.
The move comes just as House Democratic leaders are trying to finalize the proposed legislation and unveil it Friday. Committees plan to vote next week and House leaders want to pass a bill before the August recess.
"We've just got a lot of questions and the top of the list would be how to pay for it," said Rep. Marion Berry, D-Ark.
Pushing to complete a comprehensive health care overhaul plan, House Democrats focused on an income tax surcharge on the highest-paid wage earners to help subsidize insurance for the 50 million people who lack it.
As discussed in the tax-writing House Ways and Means Committee, the surtax would apply to individuals with adjusted gross income of more than $200,000 and couples over $250,000, according to officials involved in the discussion. Most spoke on condition of anonymity because the talks were private.
Rep. Shelley Berkley, D-Nev., a member of the panel, said the panel is looking at a surtax of around 3.5 percent on income above those amounts. Other members suggested it would be closer to 3 percent.
In addition, key lawmakers are expected to call for a tax or fee equal to a percentage of a worker's salary on employers who do not offer health benefits.
Ways and Means Chairman Charles Rangel, D-N.Y., has said his committee needs to come up with $600 billion in new taxes to deliver on Obama's goal of sweeping changes to the nation's health care system to bring down costs and cover the 50 million uninsured. Hundreds of billions of dollars more would come from cuts to Medicare and Medicaid to pay for legislation expected to cost around $1 trillion over 10 years.
Lawmakers cautioned that no final decisions have been made. Smaller tax options remained possibilities, depending on the overall cost of the legislation, including a tax on sugared soft drinks and ending a tax break that drug companies receive for advertising.
In the Senate, Democrats edged away from their goal of passing health care legislation by early August amid heightening partisan controversy over tax increases and a proposed new government role in providing insurance to consumers.
Sen. Chuck Schumer, D-N.Y., told the AP he believes the "ultimate goal" is to have a bill by the end of the year that is signed into law by the president.
Separately, Republicans who met Wednesday with Senate Majority Leader Harry Reid, D-Nev., said he indicated he was willing to allow more time before legislation is brought to the floor.
Failure to meet the August goal would be a setback - but not necessarily a fatal one - for Obama's attempt to achieve comprehensive health care legislation this year. A group of Democratic and Republican senators led by Finance Committee Chairman Max Baucus, D-Mont., is still trying to work out a bipartisan deal.
But the Finance Committee work appeared to have suffered a setback when Reid relayed concerns to Baucus about the compromise taking shape. Finance's proposal was expected to omit a new government insurance option to compete with private insurers - something Republicans oppose but most Democrats favor. A leading contender to pay for the measure was a new tax on employee health benefits, which Obama campaigned against and many Democrats oppose.
Pelosi made clear Thursday that whatever the Senate comes up with, the House bill will have a public plan and will not tax benefits.
"We will not be taxing benefits, health care benefits in any legislation that comes from the House," Pelosi said. "And it will have, coming out of the House, a public option," she said. "The only debate on that is what it will be called: a patient option, public option. Write in your suggestions."
I suppose that goes for hospitals as well -- and doctors.
No laughing matter.
House majority leader Steny Hoyer (D, MD) said Tuesday that the healthcare reform bill now pending in Congress would garner very few votes if lawmakers actually had to read the entire bill before voting on it.
"If every member pledged to not vote for it if they hadn't read it in its entirely, I think we would have very few votes."
In fact, Hoyer found the idea of the pledge humorous, laughing as he responded to the question. “I’m laughing because I don’t know how long this bill is going to be, but it’s going to be a very long bill,” he said.
Cliff Notes. Not acceptable in high school. Not acceptable in Congress. Not acceptable for healthcare reform.
Americans hear a lot about the UK and Canada, so much that it sometimes seems like there aren’t any other countries out there. Sure, others pop up from time to time, often as mere entries on a list of nations that have single payer health care or, more ambiguously if more correctly, “national health care,” but real discussion of their ins and outs is thin.
However, given the broad agreement that uninsured Americans should be covered and the leeriness of many about letting government run health care, there is a lot we can learn from a country that has made use of both market competition and government regulation to produce a system where costs are under control, wait times and rationing are prevented, and coverage is universal: the Netherlands.
Presently, the Netherlands achieves universal coverage with a mandate that all resident buy health coverage. Those who don’t, receive a fine. To make sure everyone is financially able to participate, subsidies are given on a sliding scale up to a fairly high income threshold. Nonetheless, enforcement of the mandate has been limited and approximately 1.5 to 2 percent of people have not bought coverage.Another 1.5 percent joined an insurer but failed to pay their premiums.
The government sets the requirements for a basic (but quite comprehensive) health insurance package that is open too everyone, regardless of age, sex, or current health status. The companies can offer different types of further coverage on top of the basic plan and can take into account age and other variables on these packages. Competition is vital and insurers have come up with a variety of creative strategies to lure customers, reduce costs, and improve health. Premiums are also actually lower than anticipated, largely due to competition among insurers.
To compensate for the fact that the basic package is open to everyone at the same cost, insurers with more sick members get government funds to make up the cost difference. However, only 30 conditions are on the list used to pay out compensation, leaving some companies carrying increased costs and some patients with difficulty getting coverage above the basic plan.
Health coverage in the Netherlands is still mostly obtained through work. Each person pays an “income-related contribution,” 7.2 percent of income up to €31,200 for 2008, which is reimbursed by their workplace. On top of this, the Dutch pay a premium per adult (children are free) and taxes that are used to subsidize people who cannot afford health insurance on their own.
Health care is cheaper than in many countries, a basic package cost around €1,100 per adult in 2008 with a deductible of €150. Those willing to accept higher deductibles can get lower premiums. But one must beware that around 90 percent of people in the Netherlands opt to get further coverage so the actual typical cost is higher. Some companies also give higher reimbursement for in-network doctors than out-of-network ones.
Despite its successes, many doctors in the Netherlands dislike the new system. They feel that bureaucrats are watching over their shoulders and fear that there will be pressure to use cheaper treatments. Indeed, some insurers encourage the use of generics over brand name medication and given doctors bonuses for complying. Prices are set partially through negotiation between doctors and insurers but only about 20 percent of procedures are subject to such negotiation. Generic drug manufacturers have to accept a 40 percent price cut at the introduction of the new system.
A number of people in the US have seen the Netherlands as an interesting model for American health care and November 2007 from US Health and Human Services Secretary Michael Leavitt traveled there and spoke with a variety of people, from leaders to patients, about the health system there. The HHS said, however, that it “would not endorse a system like the Netherlands.”
As a warning, however, the system in the Netherlands is quite new; the law creating it was passed at the end of 2004 and was implemented only at the beginning of 2006. So while the news so far is largely good, we need to wait a while before more concrete conclusions can safely be drawn.
In all the tumult over healthcare reform, we haven’t heard that much about “drugs from
Witness PhRMA panjandrum Billy Tauzin, who, according to a report in today’s edition of the Wall Street Journal told a White House meeting Tuesday that “if the larger health-care bill passes, the cost savings will be big enough to make reimportation unnecessary.”
A White House official confirmed the meeting took place and said, "As a political matter there may be less pressure" to pursue reimportation after a health bill passes.
(Meanwhile, Bernie Sanders -- the Senator from Ben & Jerry's -- disagrees with "any move to drop the importation idea." Yawn.)
Two things.
First, it’s amazing that this issue is even being mentioned. Why? Because, according to the Congressional Budget Office, importing drugs would lower costs by less than 1% -- decimal dust when you compare it to the $80 billion “deal.” And that’s not even factoring in the significant safety questions.
Second, there is no such thing as “reimportation.” The various schemes under discussion (most recently Senator McCain’s amendment that got voted down in committee the other day) call for the importation of drugs from a variety of nations around the globe – including
(It should also be noted that on-patent medicines represent about 8% of our national healthcare expense. The rhetoric may be great for headline-seeking pols, but is trivial when it comes to lowering health care costs.)
There is no such thing as “reimportation” and no financial incentive for importation. But the most important issue of all is safety. And that should be what stops this absurd notion from going even one step forward.
The Pink Sheet reports that ...
Hamburg's FDA Reorganization Merges Budget And Policy Functions
FDA Commissioner Margaret Hamburg is reorganizing her direct staff reports to streamline the development and tracking of the agency's budget.
As part of the proposed reorganization, the Office of Policy, Planning and Preparedness is being dissolved and a new Office of Policy, Planning and Budget will be created, housing the Office of Policy, the Office of Planning and a newly created office, the Office of Budget. It will be headed by an associate commissioner for budget. Currently, the budget functions are handled in the Office of Operations, which is being trimmed down and re-launched the Office of Administration.
The new structure will be accompanied by new faces at FDA. It may also involve departures: Randall Lutter, the current deputy commissioner for policy, planning and preparedness, and John Dyer, the chief operations officer are absent from the proposed organizational chart included in a memo outlining the proposed changes.
The departure of Lutter and Dyer would noteworthy because they are the last members of senior leadership team tapped by the Bush administration. Former Chief of Staff Susan Winckler departed June 19.
In the memo making the case for the new organization, Hamburg states, "Our program directors have been concerned for some time that we must be more successful in aligning our budget commitments with measurable outcomes."
"I intend to make the development and presentation of the agency's funding needs and performance goals among my highest personal priorities," Hamburg notes.
A focus on planning and budgeting has been one of the requests of congressional appropriators, and FDA's reorganization may help address the concerns of the purse string holders on Capitol Hill.
Appropriations and authorizing committees have expressed willing to provide FDA with more resources, and even as the agency's budget has gone up in recent years, the increases have been accompanied by comments that FDA needs a better plan for spending the funds.
Among the other features of the reorganization is a new deputy commissioner for foods, who will oversee the Center for Food Safety and Applied Nutrition and the Center for Veterinary Medicine. "There is no higher priority than assuring the public that we intend to make the food safety program at FDA successful," Hamburg said.
Former FDA Deputy Commissioner for Policy Michael Taylor is seen as the likely candidate for the post.
He is an experienced former FDA leader and recognized food safety expert. His resume includes posts as the administrator of the Food Safety and Inspection Services at the U.S. Department of Agriculture; vice president for public policy at Monsanto Corp.; and a senior fellow at Resources for the Future, where he focused on food safety. He is currently a research professor at George Washington University's Health Policy Department.
Also as part of the reorganization, the Office of Chief Scientist will be streamlined to focus on innovation and integrity issues, and a new Office of Special Medical Programs will be created. The proposal also adds an Office of External Affairs and elevates the agency's crises management functions.
Hamburg's FDA Reorganization Merges Budget And Policy Functions
FDA Commissioner Margaret Hamburg is reorganizing her direct staff reports to streamline the development and tracking of the agency's budget.
As part of the proposed reorganization, the Office of Policy, Planning and Preparedness is being dissolved and a new Office of Policy, Planning and Budget will be created, housing the Office of Policy, the Office of Planning and a newly created office, the Office of Budget. It will be headed by an associate commissioner for budget. Currently, the budget functions are handled in the Office of Operations, which is being trimmed down and re-launched the Office of Administration.
The new structure will be accompanied by new faces at FDA. It may also involve departures: Randall Lutter, the current deputy commissioner for policy, planning and preparedness, and John Dyer, the chief operations officer are absent from the proposed organizational chart included in a memo outlining the proposed changes.
The departure of Lutter and Dyer would noteworthy because they are the last members of senior leadership team tapped by the Bush administration. Former Chief of Staff Susan Winckler departed June 19.
In the memo making the case for the new organization, Hamburg states, "Our program directors have been concerned for some time that we must be more successful in aligning our budget commitments with measurable outcomes."
"I intend to make the development and presentation of the agency's funding needs and performance goals among my highest personal priorities," Hamburg notes.
A focus on planning and budgeting has been one of the requests of congressional appropriators, and FDA's reorganization may help address the concerns of the purse string holders on Capitol Hill.
Appropriations and authorizing committees have expressed willing to provide FDA with more resources, and even as the agency's budget has gone up in recent years, the increases have been accompanied by comments that FDA needs a better plan for spending the funds.
Among the other features of the reorganization is a new deputy commissioner for foods, who will oversee the Center for Food Safety and Applied Nutrition and the Center for Veterinary Medicine. "There is no higher priority than assuring the public that we intend to make the food safety program at FDA successful," Hamburg said.
Former FDA Deputy Commissioner for Policy Michael Taylor is seen as the likely candidate for the post.
He is an experienced former FDA leader and recognized food safety expert. His resume includes posts as the administrator of the Food Safety and Inspection Services at the U.S. Department of Agriculture; vice president for public policy at Monsanto Corp.; and a senior fellow at Resources for the Future, where he focused on food safety. He is currently a research professor at George Washington University's Health Policy Department.
Also as part of the reorganization, the Office of Chief Scientist will be streamlined to focus on innovation and integrity issues, and a new Office of Special Medical Programs will be created. The proposal also adds an Office of External Affairs and elevates the agency's crises management functions.
Uwe Reinhardt tries to claim that critics of a public option on the grounds a government plan might lead to rationing are also blindly loyal supporters of everything health plans do to keep down costs that drive down utilization.
Read more here
Rationing to save money without regard to health or value is dumb. Doing so without the consent of the doctor or patient and the use of population based information as Reinhardt has relentlessly proposed for a decade is inefficient and does not contain costs or improve improve health.
Further, Reinhardt stumbles en route his leap to logic, as do other single payer supporters, in assuming that administrative controls can tamp down costs. They do not and cannot. All they do -- take note Dr. Krugman -- is ration more completely and destroy innovation.
Then again, Reinhardt who believes America is NOT a democracy but an aristocracy, also believes in massive redistribution of income.
Which is why he continues to charge and take nicely sums from corporate and investor groups to talk about health care.
I wonder if Reinhardt will also pledge to enroll in Medicaid to help drive down health care costs and create social solidarity? Will Krugman?
Read more here
Rationing to save money without regard to health or value is dumb. Doing so without the consent of the doctor or patient and the use of population based information as Reinhardt has relentlessly proposed for a decade is inefficient and does not contain costs or improve improve health.
Further, Reinhardt stumbles en route his leap to logic, as do other single payer supporters, in assuming that administrative controls can tamp down costs. They do not and cannot. All they do -- take note Dr. Krugman -- is ration more completely and destroy innovation.
Then again, Reinhardt who believes America is NOT a democracy but an aristocracy, also believes in massive redistribution of income.
Which is why he continues to charge and take nicely sums from corporate and investor groups to talk about health care.
I wonder if Reinhardt will also pledge to enroll in Medicaid to help drive down health care costs and create social solidarity? Will Krugman?
HELP at 8+2+2?
More details to follow (on).
More details to follow (on).
CMPI TO HOST HILL BRIEFING ON FOLLOW-ON BIOLOGICS WITH REP'S ESHOO AND ROGERS
Event Focused on Ensuring “Patient Safety” is Top Priority of Follow-on Biologic Legislation Being Debated on Capitol Hill
Next Wednesday, July 15th, on Capitol Hill, the Center for Medicine in the Public Interest will host a briefing for Congressional Staff and the media entitled: “A Follow-On Biologics Legislation Update; Congressional Leaders and Medical Experts Discuss Patient Safety.” The event will be co-hosted by two high-ranking members of the House Energy and Commerce Committee, Congresswoman Anna Eshoo (D-CA) and Congressman Mike Rogers (R-MI). The Representatives are lead sponsors of bipartisan legislation to modernize the regulatory pathway for Food and Drug Association approval of follow-on biologics.
Representative Eshoo's legislation: H.R. 1548, the Pathway for Biosimilars Act, ensures that new standards for testing will make certain that follow-on biologic drugs are both safe and effective. The bill currently has 108 cosponsors and has the broadest bipartisan support of any legislation designed to regulate follow-on biologics.
“CMPI applauds Representatives Eshoo's and Rogers' commitment to ensuring patient safety is the top-priority for follow-on biologics legislation,” said Robert Goldberg of CMPI. “The next few weeks are going to be a pivotal time in Congress as health care takes top billing in the House and the Senate. It is critical that advocates for safe and effective follow-on biologics do all they can to support Representative Eshoo's legislation. Representatives Eshoo's and Rogers' dedication to ensuring FDA takes the appropriate steps to ensure the safety of patients could mean the difference between health and illness for millions of Americans.”
Also speaking at the event will be former Congressman Mike Ferguson; Dr. Geno Merli, Director of the Division of Internal Medicine and Vice Chairman of Clinical Affairs, Thomas Jefferson University; and John F. Crowley, President and Chief Executive Officer of Amicus Therapeutics. All three will help highlight the importance of balancing cost reduction and the well-being of patients in the follow-on biologics debate, bringing their unique experiences and perspectives directly to Hill staffers.
WHO: Representative Anna Eshoo (D-CA), Representative Mike Rogers (R-MI), Leading Medical Experts
WHAT: Briefing for Congressional staff and the media
WHEN: Next Wednesday, July 15th, 12-1pm
WHERE: Cannon Caucus Room, Cannon House Office Building 3rd Floor, Washington, D.C.
WHY: A Follow-On Biologics Legislation Update; Congressional Leaders and Medical Experts Discuss Patient Safety
Those interested in attending this event can RSVP via email to Meryl Reichbach at mreichbach@cmpi.org or by calling her at 212-417-9169.
My Facebook friend, Senator Charles Grassley (R, IA), has asked eight leading medical journals to describe their policies and practices regarding ghostwriting.
Grassley said his inquiry is part of his broader effort to establish transparency with regard to financial relationships between the pharmaceutical industry and medical professionals.
The text of the letter (sent to the American Journal of Medicine, the Annals of Internal Medicine, the Annual Review of Medicine, the Archives of Internal Medicine, Nature Medicine, PLoS Medicine, The Journal of the American Medical Association, and The New England Journal of Medicine) can be found here.
But inquiring minds want to know … who drafted the letter onto which Senator Grassley affixed his signature?
Grassley said his inquiry is part of his broader effort to establish transparency with regard to financial relationships between the pharmaceutical industry and medical professionals.
The text of the letter (sent to the American Journal of Medicine, the Annals of Internal Medicine, the Annual Review of Medicine, the Archives of Internal Medicine, Nature Medicine, PLoS Medicine, The Journal of the American Medical Association, and The New England Journal of Medicine) can be found here.
But inquiring minds want to know … who drafted the letter onto which Senator Grassley affixed his signature?
The Senate Health, Education, Labor and Pensions Committee's health reform bill establishes a public insurance option administered by HHS, which would negotiate rates directly with providers, including drug firms, according to senior committee staff.
The bill states that "the [HHS] Secretary shall negotiate rates for the reimbursement of health care providers for benefits covered under a community health insurance option."
Direct negotiations? Some things to consider:
"It is not obvious that allowing the government to negotiate with pharmaceutical companies will lead to lower prices than those achieved by private drug plans. Private plans like Kaiser or United are able to negotiate deep discounts with pharmaceutical companies precisely because of the plans' ability to say no – the ability to include some drugs and to exclude others, allowing the market to judge the resulting formulary. On the other hand, when the government negotiates, its hands are tied because there are few drugs it can exclude without facing political backlash from doctors and the Medicare population, a very influential group of voters. Neither economic theory nor historical experience suggests government price negotiation will achieve lower drug prices. Congressional Democrats need to be careful in making the logical leap from market share to bargaining power. Empowering the government to negotiate with pharmaceutical companies is not necessarily equivalent to achieving lower drug prices. In fact, neither economic theory nor historical experience suggests that will be the outcome. Members should think carefully before jumping on the bandwagon – this promise may bring just the opposite of what was ordered."
Stanford Business School's Alain Enthoven and Kyna Fong
"Both the non-partisan Congressional Budget Office and Medicare actuaries have said they doubt the government could negotiate lower costs than the private sector. The theory behind Part D is that market forces and competition among drug plans, overseen by government, can achieve better results than a government-run program. The multitude of plans allows seniors to pick one that best meets their needs. Government price negotiation could leave people without drugs that manufacturers decide aren't sufficiently profitable under the plan. Medicare recipients account for half of all drug prescriptions. With that kind of clout, government might try to dictate prices, not just negotiate them. This could leave people without drugs that manufacturers decide aren't sufficiently profitable under the plan. The VA plan illustrates the point. It offers 1,300 drugs, compared with 4,300 available under Part D, prompting more than one-third of retired veterans to enroll in Medicare drug plans."
"Our View On Medicare Part D: Put Brakes On Drug Plan 'Fix,'" USA Today, 11/13/06
The bottom line here is that Part D is a tremendous success – due in no small part to the Non-Interference Clause. Consider:
* The projected cost for Medicare Part D is $117 billion lower over the next decade than experts estimated just last summer. This means that over the 10-year period from 2008 to 2017, the estimated $915 billion cost of Part D fell to $798 billion.
Why? Marketplace competition.
* And, according to a study published in the Annals of Internal Medicine, the Medicare drug benefit led to a 17 percent decrease in out-of-pocket expenses, or $9 a month, for seniors who enrolled in the new Medicare Part D benefit in 2006, the first full year prescription coverage became available in the federal health insurance program for the elderly and disabled.
* And the savings amounted to an extra 14 days of medicine for those who signed up, or a 19 percent increase in prescription usage.
Can Part D be made even better? Absolutely. But this is good news worth sharing -- and not because it helps any particular partisan political agenda but because it means that more Americans -- tens of millions of more Americans -- are getting access to the medicines (largely chronic medicines) that will help them live healthier lives. And this, in no small measure, significantly reduces more drastic medical interventions -- which in turn reduces our overall national health care spending.
We shouldn’t interfere with success.
By revoking the Non-Interference clause, Uncle Sam will be able to "negotiate" prices for Part D drugs. That's kind of like negotiating with your hands tied behind your back and a gun pointed at your head. There's also the potential for Uncle to dictate that Part D prices be tied to prices in other countries -- a kind of Medicare reference price.
“Direct negotiations” means price controls. And price controls = choice controls.
The HELP committee will resume markup of the health reform bill on July 7th.
The bill states that "the [HHS] Secretary shall negotiate rates for the reimbursement of health care providers for benefits covered under a community health insurance option."
Direct negotiations? Some things to consider:
"It is not obvious that allowing the government to negotiate with pharmaceutical companies will lead to lower prices than those achieved by private drug plans. Private plans like Kaiser or United are able to negotiate deep discounts with pharmaceutical companies precisely because of the plans' ability to say no – the ability to include some drugs and to exclude others, allowing the market to judge the resulting formulary. On the other hand, when the government negotiates, its hands are tied because there are few drugs it can exclude without facing political backlash from doctors and the Medicare population, a very influential group of voters. Neither economic theory nor historical experience suggests government price negotiation will achieve lower drug prices. Congressional Democrats need to be careful in making the logical leap from market share to bargaining power. Empowering the government to negotiate with pharmaceutical companies is not necessarily equivalent to achieving lower drug prices. In fact, neither economic theory nor historical experience suggests that will be the outcome. Members should think carefully before jumping on the bandwagon – this promise may bring just the opposite of what was ordered."
Stanford Business School's Alain Enthoven and Kyna Fong
"Both the non-partisan Congressional Budget Office and Medicare actuaries have said they doubt the government could negotiate lower costs than the private sector. The theory behind Part D is that market forces and competition among drug plans, overseen by government, can achieve better results than a government-run program. The multitude of plans allows seniors to pick one that best meets their needs. Government price negotiation could leave people without drugs that manufacturers decide aren't sufficiently profitable under the plan. Medicare recipients account for half of all drug prescriptions. With that kind of clout, government might try to dictate prices, not just negotiate them. This could leave people without drugs that manufacturers decide aren't sufficiently profitable under the plan. The VA plan illustrates the point. It offers 1,300 drugs, compared with 4,300 available under Part D, prompting more than one-third of retired veterans to enroll in Medicare drug plans."
"Our View On Medicare Part D: Put Brakes On Drug Plan 'Fix,'" USA Today, 11/13/06
The bottom line here is that Part D is a tremendous success – due in no small part to the Non-Interference Clause. Consider:
* The projected cost for Medicare Part D is $117 billion lower over the next decade than experts estimated just last summer. This means that over the 10-year period from 2008 to 2017, the estimated $915 billion cost of Part D fell to $798 billion.
Why? Marketplace competition.
* And, according to a study published in the Annals of Internal Medicine, the Medicare drug benefit led to a 17 percent decrease in out-of-pocket expenses, or $9 a month, for seniors who enrolled in the new Medicare Part D benefit in 2006, the first full year prescription coverage became available in the federal health insurance program for the elderly and disabled.
* And the savings amounted to an extra 14 days of medicine for those who signed up, or a 19 percent increase in prescription usage.
Can Part D be made even better? Absolutely. But this is good news worth sharing -- and not because it helps any particular partisan political agenda but because it means that more Americans -- tens of millions of more Americans -- are getting access to the medicines (largely chronic medicines) that will help them live healthier lives. And this, in no small measure, significantly reduces more drastic medical interventions -- which in turn reduces our overall national health care spending.
We shouldn’t interfere with success.
By revoking the Non-Interference clause, Uncle Sam will be able to "negotiate" prices for Part D drugs. That's kind of like negotiating with your hands tied behind your back and a gun pointed at your head. There's also the potential for Uncle to dictate that Part D prices be tied to prices in other countries -- a kind of Medicare reference price.
“Direct negotiations” means price controls. And price controls = choice controls.
The HELP committee will resume markup of the health reform bill on July 7th.
Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.
