Background: Prescription Drugs
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SUSAN DENTZER: It’s been clear for months that prescription drug costs and coverage would be big issues this election year. So after the House of Representatives voted last month to expand seniors’ coverage for prescription drugs, Senators said this week they also felt compelled to act.
SEN. EDWARD KENNEDY: Every single day that we fail to enact a prescription drug benefit program that is affordable, accessible, available to seniors, we are violating that solemn commitment and promise to our seniors — every day, every day, today, tomorrow.
SUSAN DENTZER: But there’s broad disagreement on how to expand drug coverage under Medicare. So today Senators started debate on a provision to lower drug costs by allowing more generic drugs onto the market faster. Along with Democrat Chuck Schumer of New York, Republican John McCain of Arizona is a lead sponsor.
REP. JOHN MCCAIN: There are people today, as we speak, who are making a choice between their health and their income. Madame President, that’s wrong. It’s wrong.
SUSAN DENTZER: McCain and other proponents say the bill would end several of the legal maneuvers that pharmaceutical companies engage in to extend their exclusive patent rights on brand-name drugs. Those measures can delay the entry of cheaper generic alternatives into the market by up to several years — costing consumers and the government hundreds of millions of dollars.
REP. JOHN MCCAIN: And it’s wrong when patent companies game the system by doing things like bringing suits, which then delays the implementation. It is wrong when patent drug companies actually pay generic drug companies not to produce a particular prescription drug while they continue their profits.
SUSAN DENTZER: Senators today debated whether other provisions should be added to the generics bill. One, sponsored by Democrat Byron Dorgan of North Dakota, would allow individuals — as well as pharmacists and health insurers — to import lower-cost prescription drugs from Canada.
SENATOR BYRON DORGAN: This prescription drug is Celebrex, quite a remarkable drug, I’m told. It is for pain for arthritis. It is sold both in the United States and Canada and sold in a bottle that is almost identical, with the exception that the one is sold in the United States has a blue cap; the one that’s sold in Canada has a white cap.
The U.S. consumer is charged $2.20 per tablet; the Canadian consumer is charged 79 cents per tablet. Same drug, same bottle, made by the same company. The question that we should ask, it seems to me, as policymakers is: Why should an American citizen have to go to Canada to get a fair price on a prescription drug made in the United States?”
SUSAN DENTZER: But Senators also made clear today that their most important votes will come later this week or next — and will deal with proposals to broaden Medicare coverage for prescription drugs. As it stands, Medicare for the most part pays only for drugs that beneficiaries take when they’re in the hospital. That leaves them relying on private insurance coverage for the costs of outpatient drugs, or paying those bills out of pocket. The broadest of three different proposals now under consideration in the Senate is a Democratic plan sponsored by Senators Kennedy, Bob Graham of Florida and Zell Miller of Georgia. Its estimated cost is $600 billion over ten years. Senate Majority Leader Tom Daschle today called it the best option.
REP. TOM DASCHLE: I like it because it provides universal coverage. I like it because it keeps the premiums low. It’s a Medicare model, not a private sector model. And I think if we’re talking about a Medicare benefit, it ought to be Medicare-administered.
SUSAN DENTZER: Next is the so-called “Tripartisan plan,” backed by conservative Democrats, some Republicans and the Senate’s lone independent, Jim Jeffords of Vermont. The estimated cost of the plan is about $370 billion over ten years.
SEN. CHARLES GRASSLEY: Our bill – we call it the “21st Century Medicare Act” — has the best prescription drug benefit that we can buy within our budget. It offers a great benefit with the lowest premium of any of the pending comprehensive prescription drug proposals. The average premium under the 21st century Medicare Act is just $24 a month.
SUSAN DENTZER: The third drug coverage measure is an all-Republican plan; it would pay seniors’ drug costs only after they reached so-called “catastrophic” levels. Backers estimate the cost at about $160 billion over 10 years.
SEN. PHIL GRAMM: It is something that we can do now. I’m afraid that if we fool around with proposals that when you fill in the blanks and project the proposal out to 10 years, end up costing over a trillion dollars each, that we’ll end up with this Congress coming to an end without having provided prescription drugs to people who need it the most.
SUSAN DENTZER: Senate budget rules will probably require 60 votes to adopt a Medicare drug coverage plan, and Senators agreed today that none of these proposals has yet garnered enough votes to pass.