Great Expectations
Industry leaders hope Bush attends to their special needs
But the drug industry can hardly rest contented. In the campaign, Gore tapped early on into a politically potent issue: the plight of seniors struggling to afford expensive medicines. Bush tried to neutralize Gore's call for adding a drug benefit to Medicare by coming up with his own more industry-friendly plan. Now Bush would like a quick deal on a drug plan to show that bipartisan cooperation is possible under his leadership--before the run-up to the 2002 congressional election.
Drug dilemma. Any plan affecting seniors is hugely important to the drug industry. About 40 percent of all U.S. spending on drugs is done by those over age 65. Yet only about two thirds of seniors have help with those costs, even as the industry continues to introduce innovative, expensive medicines to treat diseases that afflict the elderly.
A prescription drug benefit in Medicare poses a particular dilemma for drug makers, notes John Iglehart, editor of the journal Health Affairs. It would surely expand sales, a plus for the industry. But it would also invite much closer government scrutiny of drug prices. Every other Medicare component, from hospital fees to medical equipment, operates under government-administered pricing. "Over the long term, can drug makers be the only ones with carte blanche to make up their prices and have the government pay?" asks Stuart Altman, a health policy professor at Brandeis University. "Probably not."
It's uncertain, of course, that Bush will succeed in pushing through any kind of drug benefit. His campaign plan, low on details, involved giving block grants to states to help low-income seniors pay drug bills, to be followed by a more inclusive benefit relying heavily on private insurers and linked to broader reform. One fly in the ointment: Last year all 50 governors said that they didn't want states to do the job. Democrats oppose a narrowly targeted benefit as compromising Medicare's status as a social insurance program for all.
But even the prospect of having taxpayers foot the seniors' drug bill increases chances of government action to rein in drug costs. Consider the issue of patent protection. In recent years, drug companies have aggressively attempted to "evergreen" their patents, making it harder for lower-priced generics to be marketed. Promoting generics "would both help consumers and make it less expensive for the government to pay for a drug benefit," says Democratic Sen. Charles Schumer of New York. He and Arizona GOP Sen. John McCain reintroduced a pro-generics bill last month.
Even Gail Wilensky, a conservative healthcare adviser to Bush, is talking about things the government can do to "up competitive pressure on the drug industry." The government could research and publicize which newly approved therapeutics really make a difference to patients, for instance, helping doctors resist one-sided drug company marketing.
The trick for legislators will be to rein in costs without harming the industry's ability to invest in new cures. In the end, after all, the drug makers' ability to reduce human suffering is worth much more to them in Washington than any number of friendly administration officials. -Pamela Sherrid
With Dan McGraw and Pamela Sherrid
advertisement
