In mid-April, Senator Jay Rockefeller and 18 Senate Democrats introduced legislation to protect seniors and reduce the deficit by $141.2 billion according to the Congressional Budget Office (CBO) by “making sure pharmaceutical companies pay their share,” reported FiercePharma. Similar proposals were also included in the President’s most recent budget proposal and the President’s Commission on Fiscal Responsibility and Reform.
Other Senate co-sponsors include Bill Nelson (D-FL), Amy Klobuchar (D-MN), Tammy Baldwin (D-WI), Richard Blumenthal (D-CT), Barbara Boxer (D-CA), Sherrod Brown (D-OH), Dick Durbin (D-IL), Al Franken (D-MN), Angus King (I-ME), Patrick Leahy (D-VT), Jeff Merkley (D-OR), Jack Reed (D-RI), Bernie Sanders (I-VT), Brian Schatz (D-HI), Jeanne Shaheen (D-NH), Debbie Stabenow (D-MI), Tom Udall (D-NM), and Sheldon Whitehouse (D-RI).
According to the sponsors, the Medicare Drug Savings Act would eliminate a special deal for brand-name drug manufacturers that allows them to charge Medicare higher prices for prescription drugs for some seniors and people with disabilities. The bill would require drug companies to provide rebates to the federal government on drugs used by dual eligibles – people eligible for both Medicare and Medicaid, who are predominantly low-income seniors and people with disabilities – just as was done for dual eligibles on Medicaid before Medicare Part D was created in 2006. Rebates would also be available to other enrollees in the low-income-subsidy plan in the Medicare Part D Prescription Drug Program.
With the exception of Medicare Part D, all large purchasers of prescription drugs negotiate better prices, including Medicaid and private insurers. This bill simply restores negotiated prices for low-income Medicare beneficiaries.
This bill would correct excessive payments to drug companies, while also saving taxpayers and the federal government from footing the unnecessary cost. Over the past ten years, the 11 largest drug companies alone took in $711.4 billion in profits, including a 62 percent increase from 2003 to 2012.
Ranking Members Henry A. Waxman, Sander M. Levin, George Miller, Jim McDermott, and Robert E. Andrews introduced the companion bill in the House.
“This bill would make sure drug companies no longer receive this unnecessary and excessive payment. It would responsibly help to reduce the deficit – without impacting Medicare beneficiaries – by making sure drug companies don’t get more than they’re due,” Senator Rockefeller said in a statement. AARP and the National Committee to Preserve Social Security and Medicare support the legislation.
Before the Medicare prescription drug program was created in 2006, brand-name drug manufacturers paid rebates for dually eligible beneficiaries on Medicare and Medicaid. All dual eligibles’ prescription drugs were discounted by rebates negotiated by the federal government and some received additional discounts negotiated by state Medicaid plans. But since Medicare Part D was created, drug companies no longer had to provide these rebates and they have been unfairly making more money off of prescription drugs for dual eligibles at the taxpayers’ expense. The bill retains incentives for drug manufacturer innovation and would not impose price controls.
However, Matthew Bennett, senior vice president of the Pharmaceutical Research and Manufacturers of America (PhRMA), said in a statement that the legislation “would bring higher premiums and copays, more restricted access to medicines for seniors and Americans with disabilities, and diminished research on the next generation of medicines,” reported by Kaiser Health News. “Unlike familiar consumer rebates that return savings to shoppers, this policy would undermine a successful and popular program to send ‘rebates’ to the Federal Treasury, not seniors,” Bennett said.
340B Drug Discount Program
In related news, FierceHealthFinance reported that the American Hospital Association (AHA) has asked the Health Resources and Services Administration (HRSA) to delay by at least six months the imposition of a new rule for the 340B drug discount program that would bar institutions from purchasing drugs for outpatients through a group purchasing organization The delay “would give hospitals enough time to modify their inventory management practices to meet the new GPO policies and avoid expulsion from the 340B program,” the article noted.
AHA claimed the lack of public hearings on the matter left hospitals unprepared to adjust to the rule change, which was enacted on April 7. The required changes include tweaks to overhauled inventory management systems, establishing new accounts with drug wholesalers and staff training, according to a letter sent April 3 by AHA Executive Vice President Rick Pollack to the HRSA.
“The rule change and AHA request come amid suspicions by U.S. Senator Charles Grassley, an Iowa Republican, that hospitals have been profiting from the drug discount program. It is intended to provide low-cost pharmaceuticals to uninsured patients or those who lack the financial means to obtain them on their own.”
“Instead, some hospitals have been using their 340B discounts to purchase drugs at steep discounts, then selling them to insured patients at hefty markups, FierceHealthcare previously reported. Duke University Hospital, for instance, profited to the tune of $69.7 million on drugs it purchased through the 340B program in 2012. Duke purchased the drugs for $65.8 million, then sold them to patients for $135.5 million.”
Since Bush Started the Medicare Part D Drug Plan My monthly Prices Went up over 275.00 more for Meds.Then for over the Past year Prices of long often meds thru Medicare are jumping monthly,these are meds that have long been out of Patent,however they are being Shorted in the long run in generic versions intentioning requires Long out of patent availble only in (Brand Name), are the quality of the meds are such poor Quality they are defenatly from NON-FDA Pharmacy’s and Sold thru out TN Pharmacy’s,Especally Walmart Store and are Junk and if they even contain Supposedly the meds they claim to be Are of such Low amounts they are in-effective.Continued Complaints do no good,we need FDA inspectors here to check these meds,They include all typres meds from Pain Med to Colon meds,including anti-diarrea meds,Nexium,and Blood pressure Medications.This has gotten worse long before The So-called Seqestration B.S.
For most seniors like me, Rockefeller’s bill is kind of a “Who cares?” Ninety percent of us seniors are not dual eligibles and more than 95% of us seniors have relatively low prescription drug costs. That is, less than 5% of us seniors are affected by the much-dreaded but over-hyped donut hole. Most of us are protected by a combination of relative good health, Medicare Part D itself, the Part D Extra Help program for low-income seniors, donut-hole coverage that upper-income seniors can buy, and state aid in 22 states for middle-income seniors.
Seventy percent of us (middle- and upper-income) seniors pay $50 a month for our drugs AND our insurance premium on average, which is kind of reasonable when you consider that we are — let’s face it — old. And in aggregate it’s over a trillion dollars less than we paid before Part D. (Remember, it’s six years later. We are not the same people.) And 25% of us seniors (low income) pay nothing for our drugs and drug premiums (or pay only very low nominal co-pays).
From the government’s point of view (as opposed to us seniors’ perspective), it’s the “government’s money,” so the government should get to say how it is spent.
But the Rockefeller proposal seems to forget the bipartisan history behind Part D. We’ve been where he wants to go before and it sucked for poor seniors. That’s one of the reasons we have Part D. .
I suggest reading Chapter 15 of the 2013 Annual Report to Congress by the MedPAC organization. (MedPAC also has older but longer reports that go back to the creation of Part D for anyone who wants even more detail.)
Among the many explicit and implicit misunderstandings about Part D is the total lack of understanding of how Part D helped low-income seniors after its passage. The current approach is much preferable to the way in which the previous government-negotiated VA-like process for low-income seniors worked. Almost 50% of Part D funds go to help low-income seniors and this is not a new post-Part-D expense to government. Most low income seniors always got help — albeit second-tier help — with their meds from Medicaid.
Many more players are involved than pharmaceutical manufacturers getting “corporate welfare.” In fact, I’m sure those manufacturers could basically care less if we return to that old negotiated VA-like two-tier system. They’ll still sell their drugs directly to the rest of us seniors (probably at a higher price).But the poor will be unable to get the more expensive life-saving drugs that they now get through Part D.
But again, for most of us “Who cares?” Certainly not a Rockefeller.
Dennis: You SHOULD care. All Americans should. Why should we, the tax payers, spend billions more on drugs for Medicare just because of a clause in the Medicare Part D Drug Plan that is nothing more than a taxpayer funded giveaway to the pharmaceutical companies? This is a no brainer. This could save taxpayers $141.2 billion! I’ve been outraged over this insane giveaway to the pharmaceutical companies for years now. FINALLY someone’s come forward to do something about it. It was nothing more than further evidence that our government has become corrupt. Congressmen added the clause to the Medicare Part D Drug Plan in exchange for campaign donations. They do it because they know they can get away with it. They do it, Dennis, because there are too many Americans like yourself who say “who cares.” We all need to start caring more if we want our Republic to survive and if democracy is still important to us.