No Panacea, but a Start

Prescription drug costs increasingly are socking it to employers, government and most of all, patients. U.S. prescription drug spending has doubled since 1997 to $154 billion last year, and more than one-quarter of the 40 million Americans on Medicare have no drug coverage whatsoever. The choice is too often between the rent and the heart medicine.

Democrats and Republicans each have a proposed drug benefit for Medicare recipients. Yet instead of compromise, expect mud-slinging in this election year. The only bright spot is off in a legislative corner--a bill that would help speed generic drugs to market.

In a speech at the National Press Club on Tuesday, the chairman of the Senate Health Committee, Edward M. Kennedy (D-Mass.), will begin stumping for a drug benefit bill he co-authored with Sens. Bob Graham (D-Fla.) and Zell Miller (D-Ga.). With a $25 monthly premium, Medicare recipients could buy generic drugs for a $10 co-payment and brand-name drugs for a $40 co-payment. The measure would cost $500 billion over 10 years.

Kennedy will certainly compare his bill to the rival GOP benefit that Rep. William M. Thomas (R-Bakersfield) plans to make public this week. In recent drafts of that bill, Thomas kept costs under $350 billion over a decade by charging a $34 monthly premium and requiring patients to eat 20% to 50% of a drug’s cost.

Thomas has sincerely tried for years to control drug costs, and he deserves credit for it.

What’s troubling about the Thomas bill is not its frugality but its fast-and-loose rules. Kennedy would have regional buying groups, like those used by large employers, negotiate discounted prices for a list of the most necessary and effective drugs as defined by Medicare officials. In contrast, Thomas would give control to private health insurers, who could bypass Medicare standards and lists of approved drugs. Just as Medicare HMOs are pulling out of areas where they attract too many ill senior citizens, insurers would be free to avoid offering a drug benefit in certain regions. Or a plan might offer nothing but discount cards for medications made by companies with financial ties to the plan.

Kennedy’s bill may be the better starting point, but it would never get past President Bush’s desk--even if the House were to accept it. As Marshall Wittmann, a senior fellow at the Hudson Institute, a conservative think tank, points out, “The [federal] tax cut pretty much depleted the cupboard as far as paying for a generous prescription drug plan.” Senate Democrats are dead set against a privately run plan like Thomas’.

What Kennedy could realistically accomplish is a prompt vote on a more modest and politically viable bill by Sens. Charles E. Schumer (D-N.Y.) and John McCain (R-Ariz.). That measure would bar pharmaceutical giants from filing frivolous demands for patent extensions on brand-name drugs just to keep generic drugs off the market. The Schumer-McCain bill admittedly is far short of reforming Medicare, but it’s probably the only prescription drug assistance voters can expect from legislators this year.