The president's budget proposal provides for discounted drugs for some poor people on Medicare via rebates from pharmaceutical makers who, in turn, are trying to kill it through lobbying by disease advocacy groups and other industry allies. Similar efforts by health insurers just succeeded in reversing planned cuts to Medicare Advantage plans by the Centers for Medicare and Medicaid Services into rate increases.

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Re-Posted with the permission of the Columbia Journalism Review where it originally appeared on April 9, 2013

As we reported in a companion piece here on CJR.org-- "Medicare uncovered: What's not on the table" (and Op Ed News) --the president's budget proposal contains a provision that takes a baby step toward discounted drugs for some poor people on Medicare. It would allow the government to obtain rebates from pharmaceutical makers for drugs covered under Medicare, for the benefit of seniors enrolled in its low-income subsidy program.

Mandating these discounts begins to use Medicare's purchasing leverage to help both beneficiaries and taxpayers. How do the drug makers respond? By trying to stomp it out, of course. And just how they are trying to block the measure is interesting: disease advocacy groups, which tend to have ties to drug makers, along with others who may be ideologically allied, are signing on to a letter campaign by two of the industry's allies.

Since the middle of March, those two allies have enlisted hundreds of organizations to sign on to letters to Congress arguing against the requirement that drug companies give the rebates. The two are the Council for Affordable Health Coverage , a group that's been around since the 1990s to push conservative and market-oriented views on healthcare, and another organization, called RetireSafe , which The Hill reports is funded in part by the Pharmaceutical Research and Manufacturers of America.

The drug companies fear that these discounts, in the form of rebates for some Medicare beneficiaries, could open the door for more serious negotiations later on--the kind of negotiations other countries engage in that allows them to pay much less for medicines. Such a step, involving a more robust use of government marketing power, could affect their bottom lines. Drug companies are some of the most profitable enterprises around, and are not about to accept change lightly.

The letters from the Council for Affordable Health Coverage and RetireSafe are similar. The Council's letter argues that the rebate "is a poorly informed, ill-conceived policy that poses serious risks to the health and well-being of millions of seniors." It predicts dire consequences, like increasing premiums, jeopardizing patient adherence to drugs, and shifting costs to employers. Too bad most signers of the letters probably won't see the rebuttal to these arguments posted late last year on a blog on Health Affairs, the respected peer-reviewed journal about health policy. "Rebutting an unfair critique" was the headline.

The RetireSafe letter makes some of the same arguments, which apparently have come from a study by Douglas Holtz-Eakin, former director of the Congressional Budget Office and now president of the American Action Forum , a policy institute that supports limited government. The RetireSafe letter disingenuously notes that while supporters of drug price negotiations "assume that because HHS (Health and Human Services) is precluded from negotiations, no negotiations to lower drug costs take place. The opposite is true." Drug plan sellers, it says, "already negotiate discounts and rebates with manufacturers as a condition of participation in Medicare."

Well, yes they do. But drug companies dealing with their friends in the insurance industry is hardly the same as engaging in tough negotiations with the government. Whether signatories to the letter wil take the time to understand the difference is another matter.

So who has signed on to these letters to help out the drug makers? Many of the organizations--more than 300 signers on each letter--are disease advocacy groups. It's not uncommon for such groups to have close ties to drug makers, either as direct funders or consultants or both. Take for instance, the Society for Women's Health Research . According to its website, it formed a corporate advisory council in 1991 whose 22 members are mostly makers of drugs and medical devices. The mission of the advisory council, according to the site, is "to engage the resources of the health care industry and its suppliers in collaboration with SWHR to spearhead changes to improve womens' health and research."

Other signers include lots of groups representing older adults--ironically the group who face income declines as they age and would benefit the most from lower prices for their medicines. Letter-writing campaigns can be effective, as the health insurers have just shown, when they got the Centers for Medicare and Medicaid Services to change a proposed rate cut for Medicare Advantage Plan--to an increase. This campaign may also pay off for the drug companies.

Either way, the campaign certainly seems newsworthy.

Authors Bio:
Trudy Lieberman, a
journalist for more than 40 years, is a contributing editor to the Columbia Journalism Review where she blogs about health care and retirement
at www.cjr.org. Her blogposts are at http://www.cjr.org/author/trudy-lieberman-1/
She is also a fellow at the Center for Advancing Health where she blogs about
health at http://www.preparedpatientforum.org/.   Her blog posts are at http://blog.preparedpatientforum.org/blog/category/author/trudy-lieberman/   Lieberman has had a long career at Consumer Reports specializing in
insurance, health care and health care financing.   She was also the director of the Center for
Consumer Health Choices at Consumers Union.  
She is a contributor to The Nation,
and has written a column about health and the marketplace for the Los Angeles Times.   Lieberman began her career as a consumer
writer for the Detroit Free Press
where her reporting became a model for consumer writers across the country.

She has won 26 national and
regional reporting awards and other honors, including two National Magazine
Awards, 10 National Press Club Awards, five Society of Professional Journalists
Deadline Club Awards, a John J. McCloy Fellowship to study health care in
Germany, a Joan Shorenstein Fellowship from Harvard University to study media
coverage of medical technology, an honorary doctorate of humane letters from
the University of Nebraska, and two Fulbright Fellowships---a senior scholar
award to study health care in Japan and a senior specialist award to
participate in training conferences in the United Kingdom for European health
journalists.   She is the author of five
books including Slanting the Story the Forces That Shape the News and
the Consumer Reports Guide to Health Services for Seniors, which was
named by Library Journal as one of
the best consumer health books for 2000.

Lieberman is an adjunct associate
professor of public health at City University of New York where she teaches
courses on the media's influence on public health.   She was director of the health and medical
reporting program at the Graduate School of Journalism, City University of New
York, has taught media ethics in the Science, Health and Environmental
Reporting Program at New York University, and has been an adjunct professor of
journalism at Columbia University.   In
2006, she was a Beamer-Schneider SAGES Fellow at Case Western Reserve
University where she taught courses on media ethics and the ethics of health
care delivery.   In 2007, she was
appointed the James H. Ottaway visiting journalism professor at SUNY New Paltz
where she taught a course on the media and the marketplace.   In 2011, Lieberman was named the Soderlund
Visiting Professor in the College of Journalism and Mass Communication at the
University of Nebraska where she taught public affairs reporting.

Lieberman served five years as the
president of the Association of Health Care Journalists, a professional
organization of over 1300 journalists who cover health and medicine, and
continues to serve on the board of directors as immediate past president.   She is currently a national advisory council
member of the California Health Benefits Review Program.   She has served on the board of directors for
the National Committee for Quality Assurance, the Medicare Rights Center, and
Village Care of New York.   Lieberman
appears on many panels and lectures widely on health care in the U.S.   She holds a B.S. with distinction from the
University of Nebraska and earned a certificate in business and economics
journalism from Columbia University's Graduate School of Journalism where she
was a Knight-Bagehot Fellow in 1976-77.

She can be reached at trudy.lieberman@gmail.com
and can be followed on Twitter at trudy_lieberman.