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A Simpler and Cheaper Prescription Drug Benefit

By Roger Hickey and Jeff Cruz  Posted by Rob Kall (about the submitter)     Permalink
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The drug industry plans to spend millions in 2006. This memo outlines a strategy to tell the truth about the confusing and costly Bush prescription drug plan -- and to organize to support a new, simpler prescription drug plan under Medicare -- a plan that will force the drug industry to compete to lower drug prices. We want to talk with you about the plan -- and the political strategy behind it.

Two years ago, as President Bush's prescription drug bill was being pushed through the Congress, labor and progressive activists made a strong, clear case against it.

First, we said the bill was a mammoth giveaway to the drug industry because it mandated the Federal government to spend billions of dollars on prescription drugs while actually prohibiting drug companies from competing to offer the lowest prices. This allows drug companies to charge whatever they want, fueling inflation in drug prices and in the health care system beyond seniors. The estimated cost of the program has soared after its passage, mainly due to drug prices.

We warned that the new law subsidized HMOs to displace and undermine Medicare - a strategy already discredited in the failed "Medicare+Choice"
program that saw HMOs rush into providing Medicare coverage only to abandon those plans when they couldn't make enough profit. HMO-like PDP and PPO private drug providers would have no incentive to keep prices down.

And finally, we warned that the Bush drug plan would drive seniors crazy by offering plans so confusing - and drug formularies so constantly changing - that even doctors would not be able to make sense of them. We knew Seniors would have a very hard time figuring out how to sign up for the new program, deciding what plan to choose, and - given the various holes in coverage - figuring out whether they would even benefit.

Those Democrats (and the AARP) who supported the Bush drug legislation argued that despite its flaws, the plan was one step on the road to the progressive goal of adding a comprehensive drug benefit to Medicare.
They argued the legislation could always be fixed or improved later.
Well, as the new legislation goes into effect and seniors and their families begin to struggle its complexities - and as health care inflation, driven by drug prices, continues to skyrocket - it is time for a new progressive-labor-senior coalition to lead once again. Our message:
politicians must agree to change the law to create a simple, efficient drug plan under Medicare - one that will stand up to big PhRMA and get drug prices under control.

Over the next year we can expect two big simultaneous movements:

1. Seniors and families will be increasingly frustrated and outraged as
they grapple with the complexity of the Bush drug plan and its confusing
benefit and delivery structure. There will be huge opportunities for
organizing - if we have an alternative plan - one that seniors and progressives can push and Democratic candidates will embrace.
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2. The drug industry will spend millions on TV spots - with the help of
phony senior groups thanking Members of Congress and President Bush for providing a wonderful new prescription drug benefit. If they want to take credit for what most seniors will experience as a confusing and frustrating mess, let us use the flood of advertising - and the fact that the drug industry is paying for it - to dramatize the fact that Republicans passed their drug plan to help the HMOs and the drug industry, not seniors. But to pull this off, we must embrace an alternative that offers both simplicity
and lower prices.

The Durbin-Berry-Schakowsky bill offers us this clear alternative that we can rally behind and make into a winning issue. This bill, the Medicare Prescription Drug Savings and Choice Act of 2005 (H.R.752/S 345), would:

A. Establish a standard drug-coverage plan administered by
Medicare.

B. Mandate negotiated prices for prescription drugs.

By creating at least one standard drug-coverage plan administered by Medicare nationwide, this Democratic alternative would provide a simple option for those confused with the complexities of the plethora of competing private plans. With a recent Kaiser report finding more then 60% of seniors to not understand the program, a standard Medicare plan will help alleviate the current confusion with prescription drug benefit.
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Negotiating group-purchasing agreements with the drug companies can lower costs to both users and to taxpayers. According to the CBO, the Veterans administration and Department of Defense have saved an average of 41% and 42% of the wholesale costs of drugs though price negotiation. These saving could be used to help plug the "doughnut hole" and still save taxpayer money.

Only by uniting to support a simpler and cheaper alternative for beneficiaries can we tap the average senior's increasing frustration with the needlessly complicated and expensive Republican plan. We hope that your organization will join us and the 57 current Democratic cosponsors in supporting the Medicare Prescription Drug Savings and Choice Act of 2005.

To join other organizations already working to make this a winning strategy, contact Jeff Cruz (jcruz@ourfuture.org) or Roger Hickey
(hickey@ourfuture.org) at 202 055-5665.

 

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