OUCH! Rx Reform
Should Medicare cover the cost of prescription drugs? That is one of the key questions before the National Bipartisan Commission on the Future of Medicare, which is due to issue its recommendations by March 1. On one side are the nation's seniors, three-quarters of whom take prescription drugs to maintain their health. On the other side is the pharmaceutical industry, which fears the government will force deep discounts in their prices.The pharmaceutical industry has invested heavily in influencing the debate. With final reports not yet in, the industry's campaign contributions have jumped 53 percent over the last midterm election cycle, reports the Center for Responsive Politics. Individual and PAC contributions for 1998 total $9.7 million, with two-thirds going to Republicans. Drug companies also reported spending $74.4 million on lobbying in 1997, tops among all industries.Of the ten members of the Congress appointed to the 17-member commission, four rank in the top ten overall among recipients of drug industry campaign contributions. The commission's co-chair, Rep. Bill Thomas (R-CA), is #2 in the House, with $46,100 in 1997-98. So far, the commission's chairman, Sen. John Breaux (D-LA) has spoken generally about including prescription drug coverage, but has offered no detailed proposal for consideration.A lot is at stake. On average, elderly people spend just over $2000 on medical care and prescription drugs, almost twenty percent of their annual income, even though most are on Medicare and have some type of private insurance as well, according to a recent study by the American Association of Retired Persons. The Commonwealth Fund estimates that 11 percent of Medicare beneficiaries spend more than $100 per month on prescription drugs."The lack of a drug benefit is really dumb medicine," says Martin A. Corry, director of Federal affairs at the American Association of Retired Persons. "Drugs keep people healthier and out of hospitals."But U.S. pharmaceuticals do not want the government buying their products on behalf of America's seniors. They fear price controls, or the likelihood that such a large buyer could demand deep discounts. Currently, drug manufacturers negotiate lower prices with large customers like health insurers, managed care organizations, the Veterans' Administration and state Medicaid programs, but these savings do not extend to most Medicare beneficiaries.Pharmaceutical companies make huge profits on their drug sales here. For example, a September 1998 study by Public Citizen's Health Research Group comparing the cost of eight leading antipsychotics and antidepressants in the U.S. and seventeen other countries in North America and Europe found that Americans pay anywhere from 1.7 to 2.9 as much for their medication. For example, it cost a pharmacist $72.16 to obtain a month's supply of Prozac from Eli Lilly & Co.; in Spain the same drugs cost $25.93. A month's supply of Clozapine, an antipsychotic made by Novartis, cost $317.03 in the United States, compared to $51.94 in Spain.