Prescription Drugs Back on President's Agenda

President Bush headed to Minnesota Thursday to tout his plan for shoring up Medicare, saying he wants a program that does not limit the opportunities for researchers to discover better drug therapies.

"In countries which rely on government controls to keep health care costs down — presumably to keep health care costs down — the patient suffers," Bush said, citing a Health and Human Services Department report that says many drug therapies for serious diseases are more difficult to get in industrialized countries with government controls on insurance.

"When government determines which drugs are covered by health insurance, when the government makes those decisions, the invariable results are this: There will be delays and inflexible limits on coverage of new treatments," he added. 

The number of American seniors relying on Medicare for medical coverage is expected to double by the year 2030 from the current 39 million.

Bush said that eight of the 10 best-selling drugs in the world and 34 of the 55 breakthrough drugs entering the market this year are made by American companies. The capacity to be on the cutting edge of new technologies that save lives will be hampered if too much pressure is put on pharmaceutical companies to proscribe to government rules on distribution.

"It is our companies and our researchers which are leading the world in finding the therapies necessary to save lives. And we have got to remember that. And therefore, we need to steer clear of direct government controls that stifle innovation and limit a patient's choice," Bush told an audience at the University of Minnesota Medical College.

But Democrats call the president's logic farcical. Senate Majority Leader Tom Daschle, D-S.D., said that Medicare does not undermine a drug company's capacity to produce new drugs, advertising, and the effort to extend patents on old drugs do.

"If they'd spend more time producing new drugs and greater research and less time trying to find ways out from under their responsibilities and opportunities, I would think we'd all be farther along," Daschle said.

Democrats rallied on Capitol Hill Thursday to call the Republican bill a "sham."

"Unfortunately, the Republican House leadership has provided a phony prescription. It's not a prescription that's going to make us well at all. It's a prescription that's a giveaway to insurance companies with no guarantee that they'll provide any meaningful coverage for seniors," said Sen. Hillary Clinton, D-N.Y. "Placebos are sugar pills. They're given to people instead of real medicine. Well, this is the worst kind of placebo."

The Republican-led House plan that has already been approved would provide $320 billion over 10 years for a prescription drug benefit beginning in 2005.

Costs would be heavily subsidized for low-income Medicare beneficiaries. Under a typical plan, others would pay a monthly premium of roughly $33 and an annual deductible of about $250.

The government would pay 80 percent of the next $1,000 of drug costs and 50 percent of the subsequent $1,000.

All beneficiaries — low-income included — would have to pick up the tab beyond that, until they reached $3,700 in out-of-pocket expenses, at which time all additional costs would be covered.

A Democratic plan offered by Sens. Bob Graham of Florida and Zell Miller of Georgia, on the other hand, would cost $500 billion over 10 years. It would require beneficiaries to pay a $25 monthly premium, no deductible and a $10 co-payment on generic drugs or a $40 co-payment on brand-name drugs. That plan includes a $4,000 cap on out-of-pocket expenditures.

One other plan offered by Sens. James Jeffords, I-Vt., Charles Grassley, R-Iowa, and John Breaux, D-La., would have monthly premiums likely under $30, with a $250 annual deductible. After that, the beneficiary would pay up to half of the costs until total drug spending reached $2,000. Once beneficiaries had paid $3,700 out of pocket in any year, insurance companies would pay at least 90 percent of all additional prescriptions.

Whichever the plan, Senate Republicans and Democrats did get one step closer to getting generic drugs to market quicker. A Senate committee approved a measure that will change the way pharmaceutical companies can hold off on their drugs going generic, changing their multiple opportunities to challenge expiration dates on brand name patents to a one-time only 30-month delay.

Lawmakers said it was the only way to open up the market, and get the debate moving.

"Today's action puts us one step closer to the goal of lowering the cost of prescription drugs for all Americans," said Sen. Edward Kennedy, D-Mass., chairman of the Senate Health Education, Labor and Pensions Committee.  

The Associated Press contributed to this report.