Medicare Part D-The Political Hot Potato
Thursday, November 02, 2006PAUL KANGAS: Speaking of Medicare, the debate over Medicare Part D, its prescription drug plan, is being aired in next week's congressional elections. As Stephanie Dhue reports, Democrats say if they are elected, they will change the way the program is run.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: In TV spots like this around the country, Democrats are taking on Medicare's prescription drug benefit.
UNIDENTIFIED MALE: I want to help the seniors, not the drug companies. I will start by allowing Medicare to buy in volume discounts so we can pass the savings on to the seniors.
DHUE: But some health policy experts say that idea is flawed.
JOSEPH ANTOS, HEALTH POLICY ANALYST, AMERICAN ENTERPRISE INSTITUTE: It is a great sound bite, it is a terrible idea. It is a terrible idea because fundamentally it is an un-administratable idea. It won't be a negotiation in the sense that most people think; it will be price-setting, it will be formula-driven.
DHUE: The pharmaceutical industry says negotiations are now where they should be, between prescription plans and drug companies. The industry worries government price controls will reduce the incentive to pump money into the research and development of new drugs. Still, critics of the Medicare drug plan say, done right, government's buying power can save consumers and tax-payers money.
GAIL SHEARER, HEALTH POLICY ANALYST, CONSUMERS UNION: We have basically lost a wonderful opportunity to rein in drug prices. We have models that work, and yet we seem to be satisfied with prices that are maybe 10 or 20 percent below retail, when we could be getting prices about 50 percent below retail.
DHUE: The Centers for Medicare and Medicaid Services reports that average monthly premiums in 2006 were a third lower than first projected, down from $37 to $24, and the average cost increase for 2007 is expected to be less than 2 percent. Supporters of the current approach point to Wal-Mart's plan to offer $4 generics as a sign that markets do lower prices.
GAIL WILENSKY, SENIOR FELLOW, PROJECT HOPE: The market can be quite effective, sometimes harsher than the government, because the government is subject to political pressures and the market usually isn't.
DHUE: Political pressure could bring the issue to a vote next year. But experts say President Bush will veto any price control plan, making it likely this debate will continue right into the 2008 presidential election.
Stephanie Dhue, NIGHTLY BUSINESS REPORT, Washington.
