BUSH AND PHARMACEUTICAL COMPANIES
Bush has taken over $300,000 from
pharmaceutical companies for his Presidential campaign, while the
prescription drug approach Bush favors is the same approach supported by
the drug industry.
Cost of Prescriptions for Seniors is High And Rising. The 50 drugs
used most frequently by seniors rose by nearly twice the rate of
inflation in 1999. The cost of those 50 drugs rose by 3.9 percent
in that year, compared to the 2.2 percent rate of inflation. From
January 1994 to January 2000, the prices of prescription drugs most
frequently used by seniors rose 30.5 percent, which is twice the rate of
inflation for that time period (15.4 percent). [Families USA,
Still Rising: Drug Prices for Seniors 1999-2000, 4/00]
BUSH CLOSE TO DRUG INDUSTRY
Bush Has Taken $385, 315 From Pharmaceutical Companies. The Wall
Street Journal reported, "According to election records analyzed by
the Center for Responsive Politics, a watchdog group, pharmaceutical
manufacturers gave almost as much, $385,315, in hopes that Mr. Bush will
help them fend off government efforts to control drug prices."
[Wall Street Journal, 7/31/00]
Top Bush Adviser Represents Drug Companies. Top Bush health care policy
adviser Deborah Steelman has represented major pharmaceutical companies,
including Bristol-Myers Squibb, Johnson & Johnson, Pfizer, and PhRMA,
a leading advocate for the pharmaceutical industry. [Washington
Representatives, 2000]
Pharmaceutical Companies Ran Scare Ads. The pharmaceutical
industry-backed Citizens for Better Medicare ran print, radio, and
television ads warning that Congressional regulation of drug prices will
result in "Canadian-style government price controls and
government-run health care." The ads imply that unhappiness
with their health care system has driven Canadians into the United
States for medicine. [Associated Press, 4/18/00]
Bush Consultant Created CBM's 1999 Ads. Bush consultant Alex
Castellanos and his firm, National Media, created Citizens' for Better
Medicare's 1999 ads. Castellanos, who is Bush's ad buyer, has been
paid four times as much as any other Bush consultant and is also leading
the Republican National Committee's issue ad effort. [Gannett News
Service, 12/9/99; Washington Post, 9/15/96; Los Angeles Times, 9/11/96;
AP Online, 5/18/00; www.campaignscoop.com;
www.natmedia.com; Roll Call,
5/11/95]
BUSH AND DRUG COMPANIES OPPOSE MEANINGFUL COVERAGE THROUGH MEDICARE
Big Drug Companies Support Legislation that Avoids a Meaningful Medicare
Prescription Drug Benefit. In addition to the recent House
prescription drug bill, big drug companies have supported the Breaux-Frist
legislation (S. 1895) and the SPICE Act (Seniors Prescription Insurance
Coverage Equity Act of 1999, S. 1480/H.R. 2782). The industry
preferred the Breaux-Frist legislation, which was first developed by the
Bipartisan Medicare Commission, because it avoids a Medicare drug
benefit and relies on private insurers and HMOs to provide drug
coverage. [Addicting Congress: Drug Companies' Campaign Cash &
Lobbying Expenses, Public Citizen, 7/00]
PhRMA Lobbied Against Guaranteed Benefit Under Medicare.
"Coats was hired recently by the Pharmaceutical Research and
Manufacturers of America to help lobby the Senate GOP leadership on the
prescription drug issue. PhRMA worries that a Clinton
Administration plan to provide a Medicare drug benefit to all seniors
could lead to price controls. The group wants to build congressional
backing for private-sector alternatives that would provide a
more-targeted benefit to seniors." This approach is the same
approach taken under Bush's plan. [National Journal, 2/26/00; www.georgewbush.com]
Industry Campaigned to "Undermine Support" for Prescription
Drug Benefit. In 1999, the drug industry's main trade group,
the Pharmaceutical Research and Manufacturers of America (PhRMA), spent
$30 million in ads to undermine support for a Medicare prescription drug
benefit. According to trade publications, PhRMA plans to run up to
$35 million in additional ads in 2000. Moreover, a major direct mail and
phone bank operations were to begin, polls were to be released and
extensive lobbying of Capitol Hill was to occur. In fact, one
business lobbyist called the Medicare prescription drug benefit
"the most dangerous expansion yet to be grafted onto (that)
program." [PhRMA's Secret Play Book, Public Citizen Press Release,
1/26/00; National Journal's CongressDaily, 4/26/00]
BUSH PRESCRIPTION DRUG PLAN WOULDN'T LOWER PRICES FOR SENIORS
BUSH PLAN REQUIRES SENIORS TO BEG HMOS AND PRIVATE INSURERS FOR
COVERAGE; FAILS TO GUARANTEE ACCESS TO MEDICALLY NECESSARY DRUGS
Bush Would Force Seniors to Go To HMOs and Insurance Companies to Obtain
Drug Coverage. The Bush plan requires seniors to go to private
insurers - including HMOs - in order to obtain a prescription drug
benefit. According to a Boston Globe editorial, "Gore wants
to add the option of a prescription drug benefit to it (Medicare), *
Bush's approach is different. He would invite private health insurers to
compete for seniors' coverage with a variety of plans, some of which
would offer drug benefits. Bush would have the government pay 25
percent of the premiums for such benefits or for a drug benefit option
he would add to the regular Medicare program. While no one under the
Bush plan would have to pay more than $6,000 for drugs, the actual costs
to subscribers would depend on the premiums, deductibles, and
co-payments set by HMOs or other insurers. One question mark over the
Bush plan is its workability: There is a risk that plans with extensive
coverage would be chosen only by the infirm, which would make the plans
very costly to the insurers and could lead to their collapse."
[Boston Globe editorial, 9/13/00]
Bush Plan Could Force Seniors into HMOs, Raise Medicare's Premiums, and
Limit Access to Pharmacies. The Bush plan would require seniors to
join private insurance plans, including HMOs, in order to obtain
prescription drug coverage. Furthermore, the Bush plan could force
even more seniors into private HMOs by raising Medicare's premiums.
The New York Times reports, "Some critics suggest that it is Mr.
Bush's plan that would increase the number of older people enrolling in
managed care*. A question is whether the premiums would rise for
traditional Medicare causing more people to choose managed care."
Furthermore, Bush's prescription drug plan would, like the House
Republican and Frist plans, provide private insurers and HMOs to
contract out to a limited number of pharmacists and effectively limit
access to pharmacies and drugs. Al Gore's plan allows all
pharmacists to have fair negotiations with insurers and pharmacy benefit
managers to participate in health plans. [New York Times, 9/17/00,
georgewbush.com; Gore 2000 policy]
THE BUSH PLAN LEAVES OUT 7.1 MILLION MIDDLE CLASS SENIORS
Nearly Half of Medicare Beneficiaries Without Drug Coverage Would Not Be
Covered By Bush, Including Middle Class. Experts estimate 7.1
million seniors who currently do not have coverage would be left out of
the Bush plan since it only provides premium support for seniors with
incomes up to 175 percent of poverty ($14,600 for singles and $19,700
for couples) -- for example, a widow with an $18,000 income would not
get any assistance. A yearly supply of Prilosec, a commonly prescribed
ulcer medicine, could cost her over $1,400 a year or nearly 8 percent of
her annual salary. The Economist reports, "* that Mr. Bush's plan
will bring 3.8 (million) people under Medicare's new umbrella for drug
insurance. Mr. Gore's scheme would cover all 11.7 (million) who lack
such cover, largely because of the plans' different levels of premium
subsidy and catastrophic coverage." And Bush's catastrophic
benefit is likely to only apply to 250,000 seniors, while Gore's would
help 2.8 million. [Governing Magazine, 9/00; Testimony of Michael Hash,
Deputy Administrator of HCFA Before the Senate Finance Committee,
3/29/00; The Economist, 9/9/00]
Private Insurers May Not Be Able To Provide An Affordable Benefit If
Costs Are Too High. The Bush plan supports giving seniors a
prescription drug benefit by providing more private sector coverage
options. Bush, therefore, asks seniors to find a managed care plan
that includes a prescription drug benefit, or remain without
prescription drug coverage. The private insurance industry has already
noted that stand alone prescription drug benefits are not feasible.
Blue Cross / Blue Shield noted that "to pass legislation to provide
access to such coverage would constitute an empty promise to Medicare
beneficiaries." Private insurers may not even be
able to provide combined medical and prescription drug benefits since an
increasing number of HMOs are actually dropping Medicare beneficiaries
from their plans. Todd Richter, a health insurance analyst at Banc
of America noted, "All the health insurers are running away from
Medicare business right now." [National Journal, 4/1/00; AP,
6/13/00; Blue Shield Association Letter to Senator Roth, 4/24/00;
Reuters, 9/6/00]
EVEN BUSH'S SHORT-TERM PLAN WOULD FAIL TO PROTECT MILLIONS OF SENIORS
Millions Of Seniors Would Be Left Out As State-Based Policies Would
Provide Only a Patchwork of Protections. States currently cover
very few seniors. Bush's short term plan touts a state block grant
approach that he calls the "immediate helping plan."
However, only 22 states have any type of plan up and running today, and
only 16 of those are actual insurance plans (and they only cover
low-income and have had limited success), as opposed to discounts at the
drug store. Even including the estimated coverage for state plans
that haven't been implemented yet, the best-case scenario for current
non-Medicaid state prescription drug plans is coverage for 1,162,002
seniors nationwide. Expanding coverage through this approach would
no doubt leave millions of additional eligible beneficiaries behind. [NCSL,
"State Senior Pharmaceutical Assistance Programs," 8/13/00;
Governing Magazine, 9/00]
National Governor's Association Explicitly Rejected State-Run Drug
Plans. In 2000, the National Governor's Association said the federal
government should assume the cost and responsibility for providing
prescription drug coverage for seniors. Their resolution said,
"If Congress decides to expand prescription drug coverage to
seniors, it should not shift that responsibility or its costs to the
states. *" [HR 39, adopted Winter Meeting, 2000]
BUSH CRITICIZED CONTAINING DRUG PRICES, EVEN THOUGH THAT IS KEY FOR HIS
PLAN TO SUCCEED
High Drug Costs Key Reason HMOs Dropping Coverage. According to
the Bergen County Register, "The problem is some HMOs have had a
disastrous experience trying to provide coverage for older people, since
they tend to have more medical problems than younger people and cost
more to cover. In the last two years, some HMOs that had contracted with
states to provide coverage have dropped hundreds of thousands of
Medicare beneficiaries. They said the costs were too high.
And news articles last week noted that HMO premiums in general are
climbing 10 percent to 30 percent, mostly because of rapidly increasing
drug costs. Medical care is getting more expensive, not less. It's hard
to imagine that many HMOs would be eager to take on millions of elderly
Americans, given the potential drain on their profits." [Record
(Bergen County, NJ), 9/10/00]
Vice President's Plan Would Reduce Costs Be Dealing in Bulk.
According to the Times Picayune, "Mr. Gore would not enlist HMO
participation in his plan. Instead, the federal government would
negotiate directly with pharmaceutical companies for lower
drug prices. And since Medicare, which now covers 39 million older
Americans, would be buying prescription drugs in such huge
quantities, consumer advocates say there's a good chance that drug
prices would come down considerably." [Times-Picayune, 9/10/00]
Gore's Plan Would Put Advocates on Side of Seniors Over Drug Companies.
"Throughout the 1990s, the drug industry has been among the most
profitable around. In 1999, the profit margin for the biggest drug
makers averaged 18.9 percent, dwarfing the 5 percent average profit for
all Fortune 500 firms, according to an independent analysis. Meanwhile,
drug costs have outpaced price increases for other products. Drugs
have seen a 6.7 percent annual price increase while yearly inflation
averaged 2.6 percent between 1991 and 1998. Under Gore's plan, the
government would hire pharmacy benefits managers to negotiate drug
discounts for Medicare beneficiaries. Representing millions
of
seniors at one time, they would be in a powerful position to demand
lower prices." [Times-Picayune, 9/10/00]
Only Vice President's Plan Would Be Able to Negotiate Lower Prices.
"Further, Bush proposes that the government would subsidize
prescription drug coverage to seniors offered through insurance
companies, while Gore would offer a standard set of benefits to
all Medicare recipients. Bush, thus, would throw most
elderly people on the mercy of insurers, who have cut and run on
hundreds of Medicare recipients over the last two years
while complaining that the government wasn't paying them enough. Under
Gore's plan, patients would have to deal with the federal Health Care
Financing Administration, which may be a faceless government bureaucracy
- but it's one without the option of dumping them. And
Medicare would have the clout to bargain for lower prices on
medicines. A study published this week by the General Accounting Office,
the watchdog arm of Congress, found that federal purchasers were able to
trim 19 percent off state Medicaid spending for prescriptions last
year." [News and Observer (Raleigh, NC); 9/8/00]
Bush Said Price Negotiation in Gore Plan Was a "Hostile
Takeover" of the Drug Industry. Bush has said that Gore's
plan to negotiate lower prices for seniors was a "hostile takeover
of the drug industry." [Baltimore Sun, 9/6/00]
Dana Marie Kennedy
Director of Seniors Outreach
Democratic National Committee
(202) 863-7151
(202) 863-8063 - FAX
430 South Capitol Street, S.E.
Washington, DC 20003
E-mail: kennedyd@dnc.democrats.org