Bush Medicare Plan Will Supplement State Rx Assistance, Thompson Says

The Bush Medicare plan will not interfere with state drug assistance programs, HHS Secretary Thompson testified before the House Ways & Means Committee hearing July 19.

Thompson made his comments in response to concerns expressed by committee members from Pennsylvania and Massachusetts that the Administration's proposal would interfere with existing state programs.

"One of the President's principles is that seniors should have the option of a subsidized prescription drug benefit as part of a modernized Medicare. How do you see a subsidized prescription drug through Medicare affecting a state drug plan?" Rep. Coyne (D-Penn.) asked.

Pennsylvania has already invested funds to create the state's senior drug assistance program, PACE, Rep. English (R-Penn.) noted.

Bush's approach "would allow the seniors better coverage...[and] additional resources," Thompson said.

"I don't think we can do it all this year, but if we can build a Medicare program in a strong fashion and give people a choice, I think it is going to benefit the state programs...because [seniors] won't go from Medicare to Medicaid after Medicare dollars have been depleted," he added.

During the Pharmaceutical Research & Manufacturers of America's annual meeting last year, Pennsylvania Gov. Thomas Ridge (R) suggested that any federal drug benefit should build on existing state programs (¹ (Also see "Medicare Rx Block Grant Approach Viewed Skeptically By Penn. Gov. Ridge" - Pink Sheet, 24 Apr, 2000.)).

Rep. Neal (D-Mass.) asked: "If the federal discount is better for one drug and the state discount is better for another, will my constituents be able to participate in both plans and shop for the best priced drug?"

Senior citizens would be able to participate in both, Thompson responded.

Cost-savings would come from pharmaceutical companies, not pharmacies, Thompson added. "With the power of 40 mil. subscribers, you're going to be able to get a good discount from the pharmaceutical companies and be able to pass that out through the pharmacists to the individual senior citizens."

Bush's "Immediate Helping Hand" proposal to provide block grants to states' low-income drug programs did not curry favor on Capitol Hill. The Administration's Medicare proposal, announced July 12, includes an Rx discount card program; enrollment is expected to begin Nov. 1 (² (Also see "Bush Rx Discount Card Relies On Increasing PBM Visibility" - Pink Sheet, 16 Jul, 2001.)).

Ways & Means Chairman Thomas (R-Calif.) praised the program as an immediate solution to prescription drug costs.

"It is ironic that in the eight years of the previous Administration...the intense discussion about trying to provide prescription drugs for seniors had to be played out in the legislative arena exclusively and [that] without passing new legislation nothing would be done for seniors," he said.

Health Subcommittee Chairman Stark (D-Calif.), however, questioned the lack of details in Bush's plan.

"How do you strengthen the program without either cutting benefits or cutting payments to providers?" Stark asked. "You're not mentioning putting any more revenues into the program."

The Administration intentionally offered a broad proposal to allow for input from Congress, Thompson answered. "We're here to offer what we think is a fairly constructive suggestion."

Stark and Rep. Kleczka (D-Wisc.) objected to the fact that Democrats were not consulted during the development process. "So far you haven't been forthcoming with us. Democrats haven't been included and that's no way to start a bipartisan plan," Stark said.

"No one that I'm aware of, Democrats, I should say, on this committee has been invited" to work with HHS in developing this proposal to modernize Medicare, Kleczka added.

Thompson replied HHS has "worked considerably on a bipartisan basis....I instructed my staff to meet with both political parties as often as they can."

The National Association of Chain Drug Stores and the National Community Pharmacists Association filed suit against HHS July 17 over the discount card program, charging that the Administration did not follow proper comment procedures (³ (Also see "Roche Goes To Glaxo Again: Marketing Head Abercrombie Is U.S. CEO" - Pink Sheet, 15 Jan, 2001.)).