Debate on Medicare Drug Benefit Set To Begin in Senate; Work on Generic Measure Delayed

Senate Majority Leader Tom Daschle's (D-S.D.) effort to begin a floor debate on competing Medicare prescription drug benefit proposals stalled on July 15 when Republicans delayed action on a bill designed to ease restrictions on generic medications, the AP/Augusta Chronicle reports (AP/Augusta Chronicle, 7/16). With the Senate Finance Committee unable to reach a consensus on competing Medicare prescription drug benefit bills, Daschle had planned to bring to the floor the generic drug legislation, which senators would be able to amend with their prescription drug plans during debate. The generics bill would amend a provision in the 1984 Hatch-Waxman law that allows brand-name drug companies to receive an automatic 30-month patent extension from the FDA when they file a lawsuit against generic drug makers for alleged patent infringement. It also would prevent brand-name companies from paying generic manufacturers to keep their products off the market and would allow generic companies to legally challenge "frivolous patents," including "superficial changes" in a treatment's color or physical design intended only to "stifle competition" (Kaiser Daily Health Policy Report, 7/15). But in a procedural move, Sen. Judd Gregg (R-N.H.) objected to moving the generics legislation to the floor, meaning Democrats must file a formal motion to proceed (Pear, New York Times, 7/16). While Democrats "accused Republicans of stalling" the floor debate, Gregg said there were "outstanding disagreements" over the generics bill that needed to be resolved. Under Senate rules, 60 votes are needed to "overcome" Gregg's objection and move the bill to the floor, and the generics bill cannot be considered earlier than July 17 (AP/Augusta Chronicle, 7/16). Sen. Don Nickles (R-Okla.) criticized Daschle's plan to bypass the Senate Finance Committee for consideration of the drug benefit bills, saying it "seriously jeopardizes the likelihood of passage of a [Medicare drug benefit] bill this year" (New York Times, 7/16).

Push for Discount Cards
Meanwhile, Sens. Chuck Hagel (R-Neb.) and John Ensign (R-Nev.) "entered the fray" over Medicare drug benefits by unveiling a 10-year, $160 billion proposal that relies on pharmacy discount cards (Carter, AP/Nando Times, 7/15). The plan would establish a national prescription drug card designed to lower drug prices through a "bulk-rate" pooling program. Medicare would not manage the benefit but would "endorse and promote" it (Grove, Las Vegas Sun, 7/15). Instead, pharmacy benefit managers would administer the program. Seniors would not pay any premiums, but would be responsible for a one-time $25 fee -- which would be waived for seniors earning less than 200% of the federal poverty level -- to have access to the discounted drugs. Once they reached an out-of-pocket limit that varies by income, seniors would pay only a "small copayment" (Hagel release, 7/15). Seniors earning less than $17,720 -- or 200% of the poverty level for an individual -- would not pay more than $1,500 a year for drugs. The drug payment cap is set at $3,500 annually for seniors earning between $17,721 and $35,440, or between 200% and 400% of the poverty level. Seniors with incomes between $35,441 and $53,160, or 400% and 600% of the poverty level, would pay no more than $5,500, while those earning more than $53,160, 600% of the poverty level, would spend no more than 20% of their income on drugs (Las Vegas Sun, 7/15). "This legislation is immediate, market-oriented, permanent, available to all Medicare beneficiaries, and affordable for both seniors and the American taxpayer," Hagel said (Hagel release, 7/15). Sens. Phil Gramm (R-Texas) and Richard Lugar (R-Ind.) are also backing the plan (Las Vegas Sun, 7/15).

AARP Pressure
It is becoming "unlikely" that any of the drug plans will win the support of the House, the Senate and President Bush before the November election, the Philadelphia Inquirer reports (Davies, Philadelphia Inquirer, 7/16). In response, the AARP on July 16 is expected to release a survey indicating that about 40% of its membership will vote against politicians who do not support a prescription drug benefit for seniors (Davies, Detroit Free Press, 7/16). Advocates hope that such a "backlash" will push senators to support a plan that is "more generous" than the plan the House passed last month (Philadelphia Inquirer, 7/16). Under the House plan, seniors would pay a $250 annual deductible and a $33 monthly premium. Low-income seniors would be exempt from the premiums and deductible. The federal government would cover 80% of seniors' annual prescription drug costs up to $1,000, 50% up to $2,000 and no costs between $2,000 and $3,700, after which a catastrophic benefit would begin (Kaiser Daily Health Policy Report, 7/10). Chris Hansen, the AARP's director of advocacy, said, "Members of Congress are increasingly aware that this is much more than a political football and it's something their constituents need." He added, "I don't know if the critical mass is quite there yet for passage" (Philadelphia Inquirer, 7/16).