State Block Grants Possible in 2002 If Medicare Reform Fails This Year - Tauzin

Congress will consider a state block grant drug benefit in 2002 if a Medicare reform package does not pass this year, House Energy & Commerce Committee Chairman Tauzin (R-La.) predicted during a March 22 media briefing.

"All bets are off next year," Tauzin declared. "We could very well want to consider a stand-alone drug benefit package next year if we have failed in our efforts to do Medicare reform this year."

"All of us know that we want to complete the drug benefit package before Congress adjourns next year," Tauzin said. "If that can't be accomplished, next year could be a very different story."

For now, however, proposals such as President Bush's "Immediate Helping Hand" and Commerce/Health Subcommittee Chairman Bilirakis' (R-Fla.) similar state-based assistance plan are not likely to receive consideration, Tauzin said.

"Immediate Helping Hand and other proposals like it that are stand-alone bills are not likely to pass this year," the Louisiana Republican said.

Moving a drug benefit within the context of Medicare reform through the House by August is a realistic deadline, Tauzin maintained. "We've discussed those deadlines with the President, and frankly, I think that's a reasonable one," he said.

"If we're going to have a reasonable chance of taking Medicare reform which includes a drug benefit through the floor to the President by the end of the year, we're not going to be in the election cycle on the issue."

Although the particular scope of a drug benefit has not yet been determined, the Breaux/Frist model of implementing a benefit through Medicare akin to the Federal Employee Health Benefit Plan program seems to have preliminary consensus. The FEHBP model "has a lot of currency right now," Tauzin said. "It's one of the concepts with the greatest currency."

One lingering challenge for advocates of the FEHBP model is the annual cycle of oversight of the program, which in recent years has taken the form of hearings on the role of prescription drug costs in driving premium increases (¹ (Also see "FEHBP Premium "Call Letter" To Kick Off Hill Debate On Employee Program" - Pink Sheet, 26 Mar, 2001.)).

Tauzin urged pharmaceutical manufacturers to participate in the creation of benefit proposals. "I'm just gently reminding them that they have a responsibility to help us find a solution short of price controls because we don't want to go there," he said.

Tauzin does not appear inclined to follow-up on calls by Democrats and some Republicans for legislation addressing direct-to-consumer advertising.

"If there is a drug that can help make life much better for people, or control chronic problems or illnesses, and those companies want to make sure people know about it, they ought to have the right to do that," Tauzin said.

"Obviously that means more people are going to be using that drug, and that raises healthcare costs," Tauzin said. However, "I'm happy that somebody invented Lipitor and I'm on it today," Tauzin declared.

Pfizer's Lipitor (atorvastatin) is the market-share leader in the cholesterol reduction category and appears to be well-tolerated by Republican health officials. In addition to Tauzin, HHS Secretary Thompson takes Lipitor (² (Also see "Future Lipitor spokesman?" - Pink Sheet, 12 Mar, 2001.)).

The Commerce Committee will also focus on the delayed privacy regulations issued in the final days of the Clinton Administration. The Bush Administration has reopened comments on the rule.

HHS Secretary Thompson is expected to appear before the committee during the first week of April to discuss the regs (³ (Also see "Dems pressure Thompson on privacy" - Pink Sheet, 26 Mar, 2001.)).

The current rule, if implemented, could cost the healthcare system an additional $30 bil.-$50 bil., Tauzin maintained.

Prescription drug reimportation is not likely to find support from the House Commerce Committee. Former HHS Secretary Donna Shalala made the correct decision in declining to certify the reimportation legislation, Tauzin said.

"Secretary Thompson is going to face the same problem," Tauzin predicted. "I don't think that he will be able to certify to Congress that the safety concerns have been properly addressed in the reimportation issue."