‘Greed’ Inflates Drug Prices, Democrats Say

Carrying anti-corporate fervor to a new legislative front, Senate Democrats on Tuesday kicked off debate on how to help consumers meet the skyrocketing costs of prescription drugs--and accused pharmaceutical companies of padding their profits at the expense of consumers.

Just one day after the Senate unanimously approved a bill to crack down on corporate corruption, the chasm between the parties reopened as the Democrats pressed their proposal to expand Medicare to cover prescription drug costs.

“What this debate is about is greed--corporate greed,” said Sen. Edward M. Kennedy (D-Mass.). “Prescription drug legislation is going to be opposed by those that are profiteering.”

The Republican-controlled House kept the corporate reform ball rolling by passing legislation to increase criminal penalties for securities fraud and corporate misconduct.

The day’s actions on both sides of the Capitol illustrated how the issue of corporate reform is likely to linger in Congress, filtering into debate on other issues.

The start of the Senate’s debate on prescription drug costs also underscored how sharply and abruptly the congressional agenda has come to be dominated by issues on which Democrats traditionally dominate.

“What [the prescription drug] issue symbolizes is that the political zeitgeist has shifted to Democratic turf,” said Marshall Wittmann, a conservative analyst at the Hudson Institute, a Washington research group. “What’s most striking is that both sides are quibbling about a major expansion of a government program at a time of burgeoning [federal] budget deficits.”

Just a few months ago, Democrats were in a defensive crouch as President Bush and his GOP allies commanded the stronger political position, in part because the congressional agenda was dominated by national security issues.

Another act of terrorism would return the focus to security concerns. But polls have indicated in recent weeks that, heading into the fall elections, voters are more concerned about domestic issues such as the economy and health care. For instance, a June poll by the Pew Research Center for the People and the Press found that 56% of those surveyed wanted to hear political candidates address domestic issues, compared with 20% wanting to hear about terrorism and security.

In that environment, Democrats are hoping their call for a Medicare prescription drug benefit will have new momentum.

Republicans sought to blunt that advantage by recently passing their version of a prescription drug bill in the GOP-dominated House. But Democrats say that bill, which would cost about $350 billion over 10 years, is too limited to meet the needs of Medicare beneficiaries. Democrats also criticize the measure’s reliance on private insurers to offer the benefits.

Democrats want to showcase their more generous alternative in the Senate, which Democrats control by a one-vote margin. Senate Majority Leader Tom Daschle (D-S.D.) has set aside two weeks for debate on Medicare, prescription drug costs and related matters.

But the outcome of the debate is far from certain. For procedural reasons, any proposal will have to be passed with at least 60 votes--and members of both parties concede that none of the major alternatives has reached that threshold.

That presents the distinct possibility that after its spotlight on the issue, the Senate will remain without a bill.

Republicans say Daschle has deliberately rigged the debate to that end: to produce a political impasse and blame the Republicans in the fall campaigns. Daschle denied that is his aim, suggesting there is real political risks to stalemating on an issue for which public demand is so great.

“Not to act would put the Senate in a bad light,” he said.

The Senate’s immediate focus is a bill to speed up the process of getting cheaper generic drugs to market, which supporters tout as a limited but significant step toward controlling drug costs. The bill is designed to close a legal loophole that allows pharmaceutical companies to delay the marketing of generic versions of drugs when their patents run out.

Some Republicans warn that the bill goes too far and threatens to undermine the incentive for drug companies to develop pioneering medicines.

But if the broader effort to enact a prescription drug benefit for senior citizens collapses, Congress may yet approve some version of the generic drug bill, said Sen. Bill Frist (R-Tenn.). As a Democratic aide put it, Republicans “want to get something done on drugs. They are not going to want to go home empty-handed.”

For now, Democrats are planning to make the generic drug bill the vehicle for amendments to expand Medicare drug coverage. Debate is expected to revolve, at least initially, around two major alternatives:

* The leading Democratic proposal, co-sponsored by Kennedy and Sen. Bob Graham (D-Fla.), would cover prescription drug costs for seniors through Medicare. Sponsors said it would cost $500 billion over seven years. It would require enrollees to pay a monthly premium of $25 and a co-payment of $10 for generic drugs or $40 for brand-name drugs. Republican critics say the Kennedy-Graham bill is a budget-busting new entitlement that the nation cannot afford.

* A less-costly centrist alternative--called the “tripartisan” bill because its Senate sponsors include Republican Charles E. Grassley of Iowa, independent James M. Jeffords of Vermont and Democrat John B. Breaux of Louisiana--would cost $370 billion over 10 years. It would set a $250 annual deductible, and monthly premiums would be an estimated $24. But instead of providing the benefit through Medicare, the government would pay subsidies to private insurers who provide drug coverage.

Democratic critics say the plan, like the version passed by the House, would leave too much to the initiative of private insurers and fail to guarantee that affordable benefits would be available. On the other hand, some conservative Republicans object to the plan as too expensive.