Compromise reached on Medicare reform
pharmafile | November 18, 2003 | News story | |
US politicians have moved closer to agreement on how to reform the country's healthcare system to include insurance for prescription drug costs for all 'seniors' for the first time.
Differences between two rival proposals to overhaul the government Medicare system have now been resolved in a compromise between the Senate and the House of Representatives, and could lead to a bill being passed by the end of November.
Forty million senior citizens currently have no assistance in paying their prescription drug costs, a situation that has mobilised patient groups, the wider public, and now both political parties in seeking a workable solution.
President Bush has backed the compromise proposal which would give seniors insurance for prescription drug costs by 2006, estimated to cost the nation $400 billion over the next ten years.
Meanwhile a new Medicare-approved drug discount card will be available for seniors within six months of the bill becoming law, to provide short-term relief from rapidly increasing prescription costs.
The overall cost of the reforms - and whether or not the plan may exceed it – is one of a number of vital details which may yet scupper the plan. President Bush and the Republican party need the proposals to become law before the next election to prove their commitment to reform and reducing healthcare costs to patients and businesses, which have risen dramatically over recent years and has become a key political issue.
President Bush said: "I'm pleased we've come this far. And I think there's going to be immense pressure on members of both the House and the Senate to support this bill. It's a good piece of legislation. It is a complex piece of legislation. After all, we're changing a Medicare system that has been stuck in the past for a long period of time.
He added: "There's some mighty active groups of people who are interested in good healthcare for our seniors that are getting mobilised. So I think we've got a good chance of passing it. I know I will be actively pushing the bill, because it conforms to the principles I laid out of prescription drugs for our seniors: choice for seniors, accountability for the Medicare plan.
The compromise has retained a scaled-back version of the most contentious element of the House plans, which put forward proposals to require not-for-profit Medicare systems to compete with private insurance schemes run by Health Management Organisations (HMOs). Republicans say the plans, due to be piloted from 2010, will give seniors choice and drive down costs through competition, but Democrats say it is just one of several unsatisfactory elements of the new plans.
Responding to news of the compromise solution, Senate minority leader Tom Daschle said: "It keeps drug prices high, causes two million retirees to lose drug coverage and coerces seniors into HMOs. He added: "It is hard to imagine a plan less faithful to what seniors have been promised."
Despite opposition from Democrats and some patient lobby groups such as Families USA, most stakeholder groups have welcomed the breakthrough and are keen to see it become law as soon as possible.
The respective lobby groups for pharmaceutical and biotech companies PhRMA, and BIO both applauded the plan, which they have been heavily campaigning for in Washington.
"When Congress enacted the Medicare programme in 1965 without a drug benefit, prescription drugs were a marginal component of healthcare," said Carl B. Feldbaum, president of BIO. "But in the almost 40 years since, hundreds of new medicines - including more than 160 biotech products – have joined the nation's pharmacopoeia, extending lives and reducing disability."
Media commentators have already given a healthy prognosis for the industry if the new plans become law, with the Wall Street Journal predicting increased sales on the back of greater use of prescription drugs among Medicare members.
But the new plans also retain a proposal to allow imports of prescription drugs from Canada, a trend which has accelerated rapidly this year, despite the pharmaceutical industry attempts to restrict supplies.
The revised plan would allow re-importation, but only providing the government Health and Human Services department gave it the all-clear, which it almost certainly would not.
FDA Commissioner Mark McClellan, who is very close to the Bush administration has strongly opposed re-importation, largely because of safety concerns. The congressmen behind the new plans have proposed a study of these issues, which opponents and supporters of the practice will be eager to influence.
