In New England Journal, Iglehart Evaluates Chances of Medicare Prescription Drug Proposals

While Congress works out a plan to restructure Medicare, the "chief question" it will face is what type of prescription drug benefit to attach to the program and how much money to allocate toward it, John Iglehart, editor of Health Affairs, writes in the fifth installment of the New England Journal of Medicine's Health Policy 2001 series. Iglehart writes that the "prospects for a Medicare drug benefit may soon improve, since virtually all members of Congress support it, the federal treasury is flush with revenues and President George W. Bush has said that enactment of such a measure is a priority of his new administration." However, to successfully enact a Medicare prescription drug benefit, Democrats and Republicans will need to come together and "resolve several fundamental disagreements." Iglehart writes that the Bush administration -- as well as "many Democrats" -- opposes instituting price controls on drugs, and the pharmaceutical industry is "prepared to wage war" to avoid them. He states that an "open-ended drug benefit would not be a viable approach either," since it "would place the entire financial burden on taxpayers and beneficiaries." Although federal agencies receive "substantial discounts" on pharmaceuticals, Iglehart writes that Congress cannot extend the federal supply schedule to Medicare purchases because drug prices for other insurers would then "undoubtedly rise substantially." Extending the federal prescription program to Medicare would also be "strongly oppose[d]" by drug firms, Iglehart adds. He concludes, "At this point, enactment of a Medicare drug benefit during Bush's first year in office seems unlikely, given both the new president's recently expressed determination to seek fundamental reform of the program, rather than only an expansion of drug coverage, and the sharply increased estimate of what broader drug coverage would cost" (Iglehart, New England Journal of Medicine, 3/29).