Sec. Tommy Thompson
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JIM LEHRER: And now to Health and Human Services Secretary Tommy Thompson.
Mr. Secretary, welcome.
TOMMY THOMPSON: Jim, it’s a pleasure to be with you, and thank you so very much for having me.
JIM LEHRER: As we just heard, the Democratic leaders have called the president’s plan a gimmick and illusion that really doesn’t change anything. How do you respond to that?
TOMMY THOMPSON: Very simply. It’s immediate. I think what they are upset about is that they are so surprised that this president, this administration is so aggressive to accomplish something right now. Now what we can do is we’re going to have this plan up and running by October 1. That’s three months from now. That’s really unusual for a Washington, D.C., as you know.
And we’re going to have it up and operational and we’re going to allow seniors to enroll October 1. Some seniors will start getting the benefits as early as November 1 and as late as January 1 of the coming year. And they’re going to have discounts of up to 15-25 percent on their drug purchases. That is immediate. I can’t imagine anybody who would be looking at this and has somebody that they are really trying to represent that is a senior citizen and wouldn’t say, wow, that’s great, congratulations, Mr. President, for doing something dramatic. It’s only the first step but it’s a great first step.
JIM LEHRER: Let’s make sure we understand how this thing works. As of October 1, or whatever date, a senior citizen on Medicare — where does that person go to get this discount card?
TOMMY THOMPSON: We’re setting up a 1-800 number at the Medicare office in the Department of Health and Human Services, so we get all those questions answered. There is going to be five companies at the beginning, and the five major PBMs, the Pharmacists Benefit Managing companies, there already in existence.
JIM LEHRER: These are private companies?
TOMMY THOMPSON: These are private companies, and they will they will be putting out the information. So a senior citizen can enroll and the fee will be anywhere from zero up to a maximum of $25.
JIM LEHRER: Who decides that, whether it’s zero or $25?
TOMMY THOMPSON: The five companies, the five private companies.
JIM LEHRER: And how do they base that on it?
TOMMY THOMPSON: It’s just an enrollment fee to take care of their bookkeeping costs and so on, and it’s just — some of them are going to waive it but it’s just going to be an annual cost for the administration type of work.
JIM LEHRER: And senior citizens can take this card to any pharmacy, or only to specified pharmacies?
TOMMY THOMPSON: The pharmacies that are enrolled in the program, but I can’t imagine with 42 million people currently in Medicare that all pharmacies will not want to enroll. Because this is going to be a great thing for the pharmacies to get individuals into their particular store. This is going to have the stamp of housekeeping good approval from Medicare on it. They’re going to be able to take that card into those pharmacies that are enrolled.
And the PBMs have got to have pharmacies enrolled in the locality where those seniors that they are enrolling are located so they will not have to travel, you know, a distance. They will be able to go down to their local drugstore and be able to get their drugs and those drugs will be at a discount of anywhere from 15-25 percent. Most of the companies say it will be around 20-25 percent.
JIM LEHRER: Who pays for the discount different?
TOMMY THOMPSON: Well, it’s going to be in lost profits to the pharmaceutical companies as well as to the drugstores.
JIM LEHRER: Why would they want to do that?
TOMMY THOMPSON: They don’t want to do that.
JIM LEHRER: Why are they going to do it?
TOMMY THOMPSON: They’re going to do it because it’s going to be there, and the pharmaceutical companies will want to do it because they want to sell their drugs to 42 million. The biggest block of consumers that purchase drugs are the seniors — 42 million of them. And they will want to do it.
JIM LEHRER: How do you know they’re going to do it, Mr. Secretary?
TOMMY THOMPSON: I don’t, but can you imagine turning your back on 42 million customers that are going to be your biggest customers? The drugstores, this is going to be… you don’t want to go out of business, you’ll want the individuals coming to your store. And these individuals are the ones that are going to purchase it and the drugstores are going to say I want those individuals to come to my store and, therefore, they’re going to be enrolling.
JIM LEHRER: All right. Where does the federal government come into this?
TOMMY THOMPSON: The federal government supervisors the consortium that is going to be putting this up, plus it gives those companies that we have certified the opportunity to put on their cards the Medicare stamp of approval.
JIM LEHRER: But you don’t pay any money?
TOMMY THOMPSON: We don’t pay any money at all. It’s beautiful. It’s a free market operation that the private enterprise system is set up to accomplish.
JIM LEHRER: Have you already made deals with these companies?
TOMMY THOMPSON: Yes.
JIM LEHRER: You know they are prepared to make these discounts —
TOMMY THOMPSON: We haven’t made the final deals but all five of the major CEOs of those companies that are doing the bulk of the card work across America today were at the rollout today. All of them enthusiastically said this is a great idea. It’s going to be helpful to our senior clients, and they’re going to be able to get a discount of 20-25 percent.
JIM LEHRER: What about the idea that the pharmacy industry said that this is actually price controls on their industry?
TOMMY THOMPSON: It is to a certain extent but it’s also the free market that is doing it. Government is not doing it. Discount companies are going to enroll their members and they’re going to go just like they do right now. Just like they do right now with the smaller number of people, they’re going to go and try and get —
JIM LEHRER: Like the woman on our tape — this is the same system —
TOMMY THOMPSON: AARP is doing it right now. But it’s the same system, only it’s going to be much more expansive, and it’s going to have a much bigger impact because of the purchasing power. The tremendous, the tremendous importance of this is that all Medicare clients are going to be able to apply. What is really going to help, it is going to help those thirteen to fifteen million that don’t have any drug coverage right now as far as insurance is concerned.
They are the individuals in America that pay the highest price because they have nobody negotiating for them, Jim. They go into the drugstore, they pay the highest prices, and these are usually the real working poor, people that are on Medicare and Social Security, have no other assets. It’s going to really help those individuals because now for $25 — up to a maximum of $25 — they’re going to be able to get enrolled and somebody else is going to do the heavy lifting of purchasing their drugs for them by driving down the cost.
JIM LEHRER: What do you say to the Democrats that say that is fine, 15-25 percent discount, but if you have a heavy drug bill like this woman we just heard about paying four, five hundred, six, nine hundred dollars a month, that is still a lot of money.
TOMMY THOMPSON: It is.
JIM LEHRER: What are you going to do about those?
TOMMY THOMPSON: We have announced, at the same time we’re announcing this card, our statement of principles. And the president outlined them and said we’re going to strengthen Medicare. We’re going to put in Medicare a prescription drug agenda. We’re going to also give seniors options. We’re also going to allow them to have the option to stay in their same fee-for-service program that they have right now.
But at the same time we’re going to give them other options to have for their Medicare coverage the federal program that all senators, all congressmen, all secretaries, all federal employees have. And we’re also going to strengthen it as far as security. And all we are asking those individual critics of us about this card, pass our proposal. It’s going to be marked up in hopefully the Senate Finance Committee on July 23.
JIM LEHRER: Is it correct to say you and the president are committed to eventually having a prescription drug benefit for all Medicare recipients?
TOMMY THOMPSON: Absolutely.
JIM LEHRER: I mean, completely a part of the system…
TOMMY THOMPSON: No.
JIM LEHRER: …no discount cards, no this or that, but everybody gets prescription drug coverage under Medicare?
TOMMY THOMPSON: Absolutely. With the proviso that we went to strengthen Medicare. We don’t want to just put the prescription drug in it and then allow the system, the failed system to continue. We want to be able to strengthen Medicare and make it better. But we want a prescription drug component in there and we also want to be able to have the other things, the options, and the strengthening it, the financial security, the management system, all of these things that will provide better healthcare for all of our seniors. The president is absolutely passionate about this as I am.
JIM LEHRER: Is it correct to say that you believe and the president believes that the prescription drug part of this is the single most important part of reforming Medicare?
TOMMY THOMPSON: Absolutely there is no question.
JIM LEHRER: So why not go ahead and do that?
TOMMY THOMPSON: Because there’s no reason, there is no impetus then —
JIM LEHRER: To do the rest?
TOMMY THOMPSON: — to do the rest. That is what some people want to do. They just want to pass prescription drug. And I make the analogy; it’s eating the dessert. I want them to eat the main meal first, get that done, then we’ll go to the dessert and we’ll fix up the system so it lasts, so it’s going to be there for your children, my children, our grandchildren.
And it’s going to be in a fiscal, sound basis. It’s going to give people the options to have their best program. You and I are different individuals. You have different desires and different needs than I do. And you should have the same opportunity to have the best health insurance program in your senior years as I want for mine. That is why the federal health insurance program is the best option. If you want to continue in the same Medicare program that you have had for years, you can have that choice.
But if you want something different, that’s a little bit better, that has more benefits and you pay a little bit less for that, a more streamlined program, then you should have that option. That is what we want to give the American seniors across this country.
JIM LEHRER: In an ideal world — and I’m not suggesting we’re in an ideal world, how long will it be — will the card system be the interim step toward a permanent system —
TOMMY THOMPSON: Yes.
JIM LEHRER: Or how long do you think it’s going to get the permanent, new system?
TOMMY THOMPSON: If the Congress takes it up, and I take Senator Daschle and Representative Gephardt, let’s do it on a bipartisan basis.
JIM LEHRER: Are you talking to them? Is there are a plan? Are you working on that?
TOMMY THOMPSON: I’m talking to everybody that will talk to me about this. The White House is. My department is. We want to get this done this year. This is the year to do it. Next year is an election year. There’s going to be a lot of demagoguing going on but this is the year to fix Medicare. Put a prescription drug component in there and — and put it on sound footings for the future.
JIM LEHRER: Another question on prescription drugs, the House yesterday passed some legislation that makes it legal for Americans to buy drugs from abroad by mail. In other words, American drugs that have been shipped overseas and then can be reimported. It hasn’t gone to the Senate or whatever yet, but what is the administration’s position on that?
TOMMY THOMPSON: We are opposed to it because we cannot guarantee the safety of it. And, you know —
JIM LEHRER: But these are American drugs.
TOMMY THOMPSON: American drugs, but they are sold overseas, and we have a lot of counterfeit drugs that are put into the market. We have no way to ensure the safety of it, Jim. And that is our concern. If we could ensure the safety of it, then we would be more than happy to go along and support it, but we can’t. It’s our responsibility as a government to make sure that the drugs that you have, that you take are safe and are going to accomplish the objective that your doctor and you feel is necessary. We don’t know that. And it’s not the only this administration. The prior administration turned it down as well.
JIM LEHRER: But what do you say to somebody that says that is fine, Mr. Secretary, but I can buy these drugs for three to nine times cheaper by having them mailed to me from Britain or from France than I can going down to my corner drugstore. And you are saying no, don’t let me do it, because you are worried they may not be safe?
TOMMY THOMPSON: Yes, I’m saying that.
JIM LEHRER: If I’m willing to take the chance?
TOMMY THOMPSON: If you are willing, then go ahead and do it. But I can’t guarantee you the safety of it. And I think it’s our responsibility — especially my department, that’s a responsibility for the safety of the drugs and food of America to be able to say to Americans that do it, that that is safe. If there was some way to make sure that those drugs were the same as they left the factory, left this country and went to a foreign country and then came back in, were the same, that would be fine. That would be great.
JIM LEHRER: You can’t do that?
TOMMY THOMPSON: I can’t do that. And that is the concern that we have. But if you do that as an individual, I’m not going to stand in your way. But you have to know that you are doing it on your own.
JIM LEHRER: The U.S. Government doesn’t approve.
TOMMY THOMPSON: Yes.
JIM LEHRER: Finally another subject: Stem cell research. When is the president going to make that decision?
TOMMY THOMPSON: The president is spending a lot of time and he is going to — he is working very hard on this. I’ve never seen an individual that has been so concerned about hearing all sides of this issue. He is —
JIM LEHRER: How close is he to making the decision?
TOMMY THOMPSON: I can’t tell you. I would say that it’s in the near future.
JIM LEHRER: Next couple of days?
TOMMY THOMPSON: No.
JIM LEHRER: All the reports say that you are personally in favor of continuing federal funding of stem cell research. Are those reports correct?
TOMMY THOMPSON: At this point in time, Jim, I would just like to say that the president has asked me to do some reviews and to make recommendations and until I make those recommendations to the president I think I should leave it just as that.
JIM LEHRER: In a general sense is the president making — in your opinion — is the president making a scientific decision, or is he making a political decision?
TOMMY THOMPSON: I can assure you it’s not a political decision — it will be a scientific and ethical decision that this president will make, will base his final decision on.
JIM LEHRER: But isn’t it basically weighing the whole element of when life begins and anti-abortion ideas versus other things — all that it’s not a big –.
TOMMY THOMPSON: It’s all of that and more.
JIM LEHRER: Very complicated, you think it’s complicated?
TOMMY THOMPSON: It’s a very complicated subject and I have spent a lot of time studying this myself. This president is spending a lot of time on it, and I got to tell you he is doing what is right. He is making, he is going to make a decision, but he is going to make a decision he feels comfortable with.
JIM LEHRER: Mr. Secretary. Thank you very much.
TOMMY THOMPSON: Thank you.