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Has the drug industry's fabled political lobbying machine finally met its match?
Even before the Democrats took control of both houses of Congress in the recent election, drug firms were already facing half a dozen bills that could do serious damage to the profitability of pharmaceuticals. California Rep. Nancy Pelosi, the incoming Speaker of the House, has said that changing Medicare law in a way that could conceivably give the government the power to set drug prices is a top priority.
Wall Street is getting worried. In a note to investors, analysts at Prudential Equity Group fret, "Democrats are well positioned to force action on drug prices, and contrary to conventional wisdom, a [presidential] veto is not a sure thing."
Medicare buys half of all drugs in the United States, and if it can control its own costs, pill prices may be pushed down across the board. But that is only the first of many legislative battles drug firms are now facing. A recent report from investment bank Credit Suisse counts six legislative threats.
After years of battling pharma over the issue, Congress is widely expected to enact legislation allowing cheaper drugs from Canada to be shipped into the U.S., the report says. A law that has sped up drug approval times is up for reauthorization, giving Congressional leaders considerable leverage. Fundamental reforms of patent laws could make it easier to launch certain kinds of generic drugs. And there are two bipartisan bills that aim to reform the Food and Drug Administration, giving regulators more power to ensure drug safety.
Legislation |
What it is |
Impact |
Medicare reform |
Would remove a clause that prevents the U.S. government from negotiating directly with drug firms. |
Could allow the government to force lower drug prices |
Drug importation |
A law allowing patients to get cheap drugs from Canada looks increasingly likely. |
Probably minimal, but the industry would lose face. |
Prescription Drug User Fee Act reauthorization |
The law that lets the drug industry fund the FDA in return for faster drug approvals is up for review. |
A delay could slow the FDA; drug safety laws could be attached to it. |
Patent reform |
Basic reforms might make it more difficult to file multiple patents on a drug. |
Limits on whether big pharmaceutical firms can make deals with generic drug makers are possible. |
Medicaid reform |
The system purchases drugs for the poor. A 2005 law already sought to save money. |
Many prescription drugs, like those for schizophrenia, actually have much of their market share here. |
Drug safety |
Two bipartisan bills aim to make the FDA more powerful. |
Will likely force the drug industry to disclose more data and do more studies. Drugs may carry stronger warnings. |
Today, even before the Democrats take over, pharma is facing the first of these legislative battles. The Senate Committee on Health, Education, Labor and Pensions (HELP) is holding a hearing on building a "21st-century FDA." It will focus on the leading FDA-reform bill, which is being sponsored by the committee's current and future chairs: Mike Enzi, R-Wy., and Ted Kennedy, D-Mass. A prepared statement from Enzi's office says the bill will "ensure that drug safety is not an afterthought." The pair began drafting the bill two years ago, when Merck (nyse: MRK - news - people ) pulled the painkiller Vioxx from the market after it was found to cause heart attacks.
The Enzi-Kennedy bill may actually be softer on big drug firms like Pfizer (nyse: PFE - news - people ), Johnson & Johnson (nyse: JNJ - news - people ), and Amgen (nasdaq: AMGN - news - people ) than another bipartisan bill, from Sens. Charles Grassley, R-Iowa, and Chris Dodd, D-Conn., that would have created a powerful office of drug safety within the FDA. But a draft that has been available on the HELP committee's Web site since July has teeth. It would put data from all major company-funded studies of drugs up on the Web. And it would give the FDA the power to fine
The bill got a major push when a report from the influential Institute of Medicine, which the FDA had requested, seemed to back many of its claims--and also recommended that drugs be re-evaluated five years after they are approved. But in a Democratic Congress, the bill could get even tougher. In her note to investors, Catherine Arnold of Credit Suisse speculates that Democrats in the house could favor "more draconian" measures than the Enzi-Kennedy bill.
Drug safety legislation could be coupled to the re-approval of the Prescription Drug User Fee Act, a 1997 law that sped up drug approvals by getting drug firms to help pay for the process. That Five years ago, drug re-importation, which would allow cheaper drugs to be imported from Canada, was the biggest threat facing the drug business. Now, analysts say that Congress will allow it--but that it is unlikely to have a significant effect on the industry's profits, because the number of pills brought into the U.S. in this way would actually be tiny.
Instead, the big focus is on Medicare reform. The Medicare Prescription Drug Benefit that went into effect this year pays industry health plans to cover the drug expenses of senior citizens. Since all of these plans are competing against one another, they don't have much leverage.
But just to make sure drug firms don't have to negotiate with an 800-pound gorilla, the law contains a provision specifically forbidding the government from negotiating directly with drug firms. This is the sentence that the Democrats want to change or strike from the law. Depending on how a change was enacted, that could lower drug prices a little--or create a system where the government can basically dictate drug prices by saying what it will pay.
Drug firms say that the increasing focus on the risks and costs of drugs miss the point. The industry's trade organization, Pharmaceutical Research and Manufacturers of America, frequently points out that the FDA already sets the worldwide standard for drug safety and that many of the medicines drug firms invent are lifesavers.
"I think it's been easy to beat up on the drug industry," says Tony Zook, who heads AstraZeneca's (nyse: AZN - news - people ) U.S. operations. But he worries that the industry might have trouble surviving if people forget about the good that medicines do and only focus on side effects. "If society is looking for the perfect pill, it doesn't exist," he says.
While drug costs are the main focus of discussion and debate, Zook points out that companies do a great deal to make their medicines available to those who cannot afford them. And the Medicare plan, he says, is already costing less than anyone, iis already costing less than anyone, including the Congressional Budget Office, thought it would.
"The plan has already served seniors well," Zook says. "The focus should be on the 40 million people who are uninsured."
The drug industry has been struggling to move on from the Vioxx debacle, and it seemed that it had already won the battle over Medicare. But it looks like both issues are back on the table. Investors are already worried. Since the election, major drug stocks have dropped more than 5%.
Tell Congress to stop the terrible waiting period for people with disabilities
End the Wait
November 16, 2006 • Volume 6, Issue 46
Every year, many of the approximately 800,000 people who become disabled due to illness or injury are quietly denied access to needed health care. Five months after the Social Security Administration deems someone to be severely disabled, an individual can begin receiving disability insurance. But she must then endure an additional 24-month waiting period before receiving Medicare coverage.
Twenty-four months. That means that when the next presidential election rolls around, people who were deemed disabled in June of this year will finally have affordable, reliable medical insurance. Will our elected leaders have acted to remedy this injustice by then?
A bill to end the 24-month waiting period, sponsored by members of Congress from both parties, stalled last year. When fresh faces arrive on Capitol Hill in January, though, they will have another opportunity to stand up for people with disabilities.
It is imperative that they do. Legislation delaying needed health coverage for people with disabilities remains unchanged, at a time when the number of uninsured Americans continues to increase and medical bills have risen.
The two main options now available for people with disabilities - COBRA coverage and Medicaid - have become increasingly untenable under the COBRA program, workers who must leave their jobs under certain circumstances, such as a disability, can keep their health benefits for 18 months. But many people cannot afford the rising cost of coverage on their limited, fixed incomes: the average disability payment from Social Security is around $900 a month.
Others never even had access to employer-based insurance in the first place. The number of employers providing health benefits has been declining steadily over the past several years, particularly among those with high proportions of lower-wage workers.
Medicaid is also becoming a less viable safety net for people left without coverage, as states cut back on eligibility to curb spending. This year, 18 states reduced or restricted eligibility as a cost-containment strategy, and 45 states iin total have done so in at least one of the past five years. It's clear that looking to COBRA and Medicaid is not the right solution. Eliminating the 24-month waiting period is.
Several of the candidates who were newly elected to Congress last week told the Medicare Rights Center during the campaign season that they will cosponsor legislation eliminating the 24-month waiting period. They are Senators-elect Ben Cardin, Democrat of Maryland; Claire McCaskill, Democrat of Missouri; Sherrod Brown, Democrat of Ohio; and Representatives-elect Ed Perlmutter, Democrat of Colorado; Ron Klein, Democrat of Florida; Patrick Murphy, Democrat of Pennsylvania; and Peter Welch, Democrat of Vermont.
It is time Congress abolishes this unjust and harmful two-year delay in Medicare coverage. People with disabilities have waited long enough.
Medical Record
"Once individuals are approved for SSDI [Social Security Disability Insurance] and receive their first disability check five months later, their two-year wait for Medicare coverage begins in earnest. Nearly all say they are forced to pay out-of-pocket for most services and almost all prescription medication; put off doctor's visits, or visit much less frequently, or not at all (some opting to use the emergency room instead); and, in many cases, forego necessary medications, tests, and rehabilitation therapy. Because of lack of coverage, these individuals say they access services sporadically at best, and inconsistent care is taking a toll on their health" ("Waiting for Medicare: Experiences of Uninsured People with Disabilities in the Two-Year Waiting Period for Medicare", available through The Commonwealth Fund, October 2004).
Eligibility reductions are among the most difficult cost containment measures undertaken by states to constrain Medicaid costs because they negatively affect low-income and vulnerable populations who rely on Medicaid for access to needed health and long-term care services. However, due to the length and severity of the economic downturn that began in 2001, a total of 45 states made restrictions or reductions to Medicaid eligibility in at least one of the five years from FY [fiscal year] 2002 to FY 2006 (Low Medicaid Spending Growth Amid Rebounding State Revenues: Results from a 50-State Medicaid Budget Survey State Fiscal Years 2006 and 2007 , Kaiser Commission on Medicaid and the Uninsured, October 2006).
Sixty-one percent of firms offer health benefits to at least some of their employees…Sixty-five percent of higher wage firms (less than 35% of workers [make] $20,000 or less annually) offer health benefits, compared with 42% of firms with a greater percentage of lower-wage workers” (Employer Health Benefits 2006 Annual Survey: Summary of Findings, Kaiser Family Foundation and Health Research and Educational Trust, September 2006).
Between spring of 2005 and spring of 2006, premiums for employer-sponsored health insurance rose by 7.7%, a slower rate than the 9.2% increase in 2005 and 11.2% increase in 2004. Despite this slowdown, premiums continued to increase much faster than overall inflation (3.5%) and wage gains (3.8%)” (“Employer Health Benefits 2006 Annual Survey: Summary of Findings,” Kaiser Family Foundation and Health Research and Educational Trust, September 2006).
* * * *
Fast Relief: Part D Monitoring Project
The Medicare Rights Center (MRC) needs to hear about all the problems with the Medicare Part D benefit, whether they happen to you or someone in your community. With this information, we will be armed with the needed evidence to push for a Medicare-administered drug benefit.
Submit your story at www.medicarerights.org/partdstories.html
* * * *
The Louder Our Voice,
the Stronger Our Message
Asclepios named for the Greek and Roman god of medicine who, acclaimed for
his healing abilities, was at one point the most worshipped god
in Greece—is a weekly e-newsletter designed to keep you
up-to-date with Medicare program and policy issues, and advance
advocacy strategies to address them. Please help build awareness
of key Medicare consumer issues by forwarding this action alert
to your friends and encouraging them to subscribe
today.
* * * *
The Medicare Rights Center (MRC) is the largest independent source of Medicare information and assistance in the United States. Founded in 1989, MRC helps older adults and people with disabilities get good, affordable health care.
Visit our online subscription form to sign up for Asclepios at http://www.medicarerights.org/subscribeframeset.html.
Illegal
immigrants' healthcare bill is tallied
The cost to taxpayers was $1.1 billion in
2000, a Rand study finds. Critics say the figure is too low.
By Evelyn Larrubia, Times Staff Writer
November 15, 2006
Healthcare for illegal immigrants between
the ages of 18 and 64 cost American taxpayers $1.1 billion in 2000
— or about $11 per household according to a study released
Tuesday by the Rand Corp.
The research, published in the November/December edition of the
journal Health Affairs, put the cost in Los Angeles County that
year at $204 million.
"There are taxpayer implications to illegal immigration, but
healthcare is not one of them," said Jim Smith, a senior economist
with Rand and author of the study. "Why are we talking about
healthcare when that's only $1 billion a year?"
The Federation for American Immigration Reform questioned the study's
conclusions, saying it estimates the total cost of healthcare for
illegal immigrants in California alone at $1.4 billion.
"From the studies that we have done, [the Rand study] certainly
is a low-ball estimate " said Jack Martin of the federation.
"But there are issues other than cost…. In the emergency
rooms, it has to do with very finite resources and the fact that
those medical facilities end up at times being severely overburdened
so that the quality of attention that they can give to U.S. citizens
and legal permanent residents is degraded."
The Rand study, which surveyed Los Angeles County residents about
their use of healthcare services and then used national estimates
on cost to put a price tag on the care, found that nearly 22% of
illegal immigrants have health insurance, which covered about $362
million in costs in 2000. The immigrants themselves paid $321 million
out of pocket.
Though other estimates of some healthcare costs for undocumented
immigrants exist, it is hard to compare them directly to the Rand
findings.
In fiscal year 2004-05, California's Medi-Cal program covered $946
million in services for impoverished illegal immigrants, including
coverage for emergencies, prenatal care, limited cancer treatment,
abortions and nursing home care. In 2003, Los Angeles County estimated
that it spent $340 million on public hospital and clinic care for
illegal immigrants not covered by Medi-Cal.
But those figures include costs for children and the elderly, who
were excluded from the Rand study. Also, the Rand data were collected
in 2000, and the number of illegal immigrants in California has
swelled in the five years since then, as have healthcare costs.
The Rand study also found that illegal immigrants tend to see doctors
less frequently than citizens do. In part, that's because they're
younger, Smith said, and because people with chronic health problems
are less likely to cross the border.
Researchers found that 40% of male undocumented immigrants had never
received a medical checkup and 23% had never seen a doctor, compared
with 21% and 10% respectively of those born here. Among illegal
immigrant women, 21% had never received a checkup, compared with
5% of those born in the United States.
The study was based on a 2000 questionnaire completed by 2,543 adults
in 65 neighborhoods across Los Angeles County. The questionnaire
was not specifically aimed at determining healthcare costs; rather,
participants were asked about a wide range of issues to discern
whether neighborhoods had an impact on people's lives.
However, the survey asked about legal status and whether the participants
held green cards or other documents authorizing their stay in the
country. It also asked them about their use of hospitals and clinics
in the prior two years.
In the midst of the current debate over illegal immigration, Smith
said, he and his colleagues wanted to use their data to "put
some facts" into the discussion.
Smith said the researchers calculated the cost of services, then
inflated them by 25% to account for incidental costs.
He acknowledged that relying on questionnaires is not foolproof,
and that results are tied to the memory and truthfulness of research
subjects. But he stood by the study's basic conclusions.
"Let's say I'm wrong and I've understated these costs by $1
billion — which is a lot — I'd still conclude the same
thing: that these are relatively small aggregate costs for the nation,"
Smith said.
Margaret Laws, director of public financing and policy for the California
HealthCare Foundation, said she welcomed the study as a more scientific
look that provides a point of comparison. Until now, she said, the
only sources of information on the cost of caring for illegal immigrants
have been anecdotal reports.
"Short of hospitals collecting and reporting data in a way
they don't now, there is no other way to measure this," she
said. "It is the best thing we have."
Louisville Metro Council supports Bill for
Universal Health Care
From the Courier-Journal Louisville, KY
The Louisville Metro Council this week passed a resolution in support of a national bill calling for universal health care for Americans.
The council endorsed House Resolution 676, introduced by Democratic Rep. John Conyers Jr. of Michigan, which would expand Medicare and create a "single-payer" health-care system, publicly financed and privately delivered.
Under the proposal, people would have access regardless of employment, income or health. Each year, the program would set reimbursement rates for health-care providers and negotiate the cost of prescriptions.
Many say the controversial proposal isn't likely to become law. Although opponents agree that the problem of the uninsured must be addressed, they say a national system would drive up taxes, stifle medical innovation and lead to waits for services.
Low
Cost Insurance In Massachusetts -- Here's a sample
Boston Globe By Christopher Rowland, Globe Staff --November
1, 2006
Low-cost insurer leaves bills
and a bitter taste Critics cite confusion and policy limitations
Erin Chartier fumes every time she receives mail with her
health insurance company's slogan: "Keeping the Promise of
Affordable Coverage."
"It's affordable because they don't cover anything," she
said. "It makes me so mad." Chartier, 22, spends her days
in a small apartment with her 2 -month-old daughter, Karli, who
was born five weeks premature. Chartier and her husband, Earl, face
about $50,000 in medical bills they thought insurance would pay.
They are insured by Mid-West National Life Insurance Co. of Tennessee
, whose low-cost health insurance plans have generated similar complaints
from other consumers. Mid-West National Life and a sister corporation,
MEGA Life and Health Insurance Co., are subsidiaries of HealthMarkets
, a for-profit national company based in Texas. more...
THE
So-called "CITIZEN'S" Healthcare Working Group
Hartford Courier, October 31 2006
Last April, a government-sponsored task force
came to Hartford to hear citizens' views on how to improve our distressed
health care system. As in nearly all states visited, Connecticut
citizens overwhelmingly said they wanted high-quality, cost-effective
health care funded through a national health program - single payer
health insurance. Yet, such a recommendation would threaten the
profits of powerful interests - insurance and drug companies known
more for their political contributions than for their consideration
of public interest. So in its final report of Sept. 27, the Citizens'
Health Care Working Group simply ignored the citizens. more...
Healthy
Skepticism
The Boston Globe October 28, 2006
MASSACHUSETTS is in the midst of yet another healthcare experiment. By July, all residents will be legally required to have health insurance -- a so-called "individual mandate." The bill's sponsors believe that the uninsured can buy their way out of their predicament. "As doctors in an urban hospital, we are not optimistic about this proposal. We care for uninsured and underinsured patients who often lack the resources to eat well or find proper child care, much less to buy insurance. The individual mandate is another ill-fated Band-Aid." more...
The
Elephant in the Florida 22nd: Medicare Prescription Benefit
Washington Post, October 1, 2006;
By Anushka Asthana
HOLLYWOOD, Fla. -- Betty Priscak has voted for veteran Rep. E. Clay Shaw Jr. (R-Fla.) in every election he has been in, but now she thinks it is time for a change. Priscak, a 74-year-old in increasingly poor health, plans to vote for Ron Klein, Shaw's Democratic challenger, in November.
Why? She is upset with the Medicare prescription drug program passed by the Republicans in 2003. She calls it "devastating." more...
Healthcare-NOW Ithaca Allies Challenge Candidates
..The cheers, claps and chants from people that joined the universal health care rally on The Commons last Tuesday were passionate and well-conceived. Demonstrators held signs up that said: "People are Dying to be Insured," or "Single-Payer Health Care for All." There was a poster, too, stating how the fastest growing segment of the uninsured are adults 18-34 and the middle class. It leaned against the podium where elected officials spoke. more...
The
American Economy Dethroned By the Swiss ...
Dernieres Nouvelles d'Alsace, France Translated By Pascaline
Jay
September 27, 2006 http://www.watchingamerica.com/dna000011.shtml
1) The American Economy Dethroned By the Swiss ...
2) Entrants to US workforce 'ill-prepared'
Switzerland was the most competitive country in the world in 2006, according to the yearly rankings published by the World Economic Forum. Yesterday, the people responsible for the rankings said the Confederation's public institutions and scientific research programs were the best in the world. Our Swiss neighbors, who were number four last year, have thus managed to nose out the usual champions, Finland and Denmark, with the United States now dropping to number six in the rankings, two thirds of which are based on the results of a survey carried out of 11.000 of the planet's business executives. more ...
Past
News Articles:
Click on the linked title to read the whole story
Cost of Healthcare Drove Me Out of Business (from Alan Balkema -- published on October 5, 2006)
Ithaca Healthcare Rally at Governor Candidates' Debate (from Ithaca Times -- published on October 4, 2006)
Walmart AGAIN (from New York Times -- published on October 3, 2006)
One fifth of Healthcare $ Don't go to Healthcare (from Jonathan G.Bethely -- published on October 3, 2006)
U.S. Healthcare the Worst --Gets a "D" (from Julie Light -- published on October 3, 2006)
Unions Praise Universal HC Proposal (from Press Associates, Mark Gruenberg -- published on October 2, 2006)
Luring Customers From Medicare (from The New York Times By Milt Freudenheim -- published on September 22, 2006)
Just Try Voting Here: 11 of America's worst places to cast a ballot (or try) (from Mother Jones - September - October 2006 issue -- published on September 14, 2006)
Health Insurance Too Expensive (from Aberdeen News.Com -- published on September 13, 2006)
Medicare For All (from Pittsburgh Post-Gazette By Bill Wood, M.D. -- published on September 13, 2006)
Vermont Could Save $51 Million With Single Payer (from Thomas J.Garvey, MHA -- published on September 12, 2006)
The Sickly State of Health Insurance (from AlterNet By Nomi Prins -- published on September 12, 2006)
Stanford to Ban Drug Makers' Gifts to Doctors, Even Pens (from NY Times - By ANDREW POLLACK -- published on September 12, 2006)
Massachusetts Plan - Insurers Plan to Raise Rates (from Boston Globe By Jeffrey Krasner -- published on September 12, 2006)
The only health-care solution: single-payer system (from THE INDIANAPOLIS STAR -My View: Aaron E. Carroll -- published on September 10, 2006)
Four Largest Massachusetts Insurers Plan Double-Digit Premium Increases For 2007 (from Boston Globe -- published on September 10, 2006)
Single-payer health care system is the answer Access possible for all at a fraction of current cost (from The Monitor by Marcos Santiago -- published on September 9, 2006)
Michael Moore Documentary Rattles Health-Care Giants (from Online publication 'Advertsing Age' By Rich Thomaselli -- published on September 9, 2006)
Clergy team up in health care effort (from The Tribune San Luis Obispo - By Sarah Arnquist -- published on September 8, 2006)
How Unions Can Attract Youth (from By Ben Waxman:http://benwaxman.blogspot.com -- published on September 5, 2006)
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