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Posted by jrbecker on June 5, 2003, at 11:36:29
http://www.nytimes.com/2003/06/05/politics/05MEDI.html
2 Drug Bills Advance to Aid Access to Generics and to Add Benefits
By ROBERT PEAR
WASHINGTON, June 4 — A bipartisan group of senators, led by a conservative Republican, said today that they would push legislation to give consumers swifter access to low-cost copies of brand-name prescription drugs.
At the same time, Senate Republicans worked out the final details of a separate bill that would add prescription drug benefits to Medicare, the federal health insurance program for the elderly and disabled.
The bill would encourage greater use of private health plans in Medicare. But identical drug benefits would be available through private plans and under the traditional fee-for-service Medicare program, which still serves 88 percent of the 40 million beneficiaries.The Bush administration welcomed today's developments on an issue sure to loom large in next year's elections. "We are encouraged that bipartisan progress is being made," a White House official said.
The agreement on generic drugs was negotiated by Senator Judd Gregg of New Hampshire, a conservative Republican, and Senator Charles E. Schumer, a liberal Democrat from New York.
"This is a real step forward," Mr. Gregg said in an interview. "It will give people access to prescription drugs more quickly, at a lower cost, without a lot of litigation, and there will still be many incentives for pharmaceutical innovation."
The agreement is significant because Mr. Gregg is chairman of the Committee on Health, Education, Labor and Pensions, and he opposed similar legislation last year. Mr. Gregg described the earlier bill as "a lawyers' relief act." It would have allowed generic drug companies to file lawsuits challenging the way brand-name companies use some patents to get an automatic delay in generic competition.
With that provision modified, Mr. Gregg said, he expects the committee to approve the proposal next Wednesday.
Senator Schumer, who has been a champion of generic drugs for several years, said: "The core concept of our bill is that pharmaceutical patents should not be extended for trivial reasons. The drug companies will get their patent protection for a limited period of time, but you won't be able to extend that protection with fancy lawyering tricks."
Under the bill, Mr. Schumer said, consumers of all ages, not just Medicare beneficiaries, could obtain some "relief from the high prices of prescription drugs."
The agreement, negotiated in secret, is to be announced on Thursday, with support from Senators John McCain, Republican of Arizona, and Edward M. Kennedy, Democrat of Massachusetts. President Bush proposed a rules change to speed access to generic drugs last year, but the legislation goes further.
Express Scripts, a pharmacy benefit manager, said greater use of generic drugs slowed the growth of drug spending in the first three months of this year.
Bruce Lott, a spokesman for the Pharmaceutical Research and Manufacturers of America, which represents brand-name companies, said, "Current law works well for patients, but we are reviewing Senator Gregg's proposal." Kathleen D. Jaeger, president of the Generic Pharmaceutical Association, said her group was pleased with the proposal.
Separately, Republicans on the Senate Finance Committee put the final touches on a proposal adding drug benefits to Medicare, at a cost of $400 billion over the next 10 years. That would be the biggest expansion of the program since its creation in 1965.
The Medicare proposal was devised by Senator Charles E. Grassley, Republican of Iowa, chairman of the Finance Committee, which plans to vote on it next week.
Mr. Grassley is sure to win support from one Democrat on his committee, John B. Breaux of Louisiana. He is wooing the senior Democrat on the panel, Max Baucus of Montana. Indeed, Laura Hayes, a spokeswoman for Mr. Baucus, said he was a co-author of the proposal and had been working closely with Mr. Grassley.
The Senate Republican bill defines the "standard drug benefit" as follows: Beneficiaries would have to pay an annual deductible of $275. Medicare would pay 50 percent of drug costs from $276 to $3,450 a year. The beneficiary would then be responsible for all drug costs up to $5,300 a year. Beyond that point, Medicare would pay 90 percent of drug costs, and the beneficiary would have to pick up 10 percent.
This convoluted structure was dictated by a desire to control the cost to the government. The bill provides protection against catastrophic expenses, but there would be a gap in coverage in the middle.
Mr. Grassley's bill is written so the premium for drug benefits would average $35 a month, on top of the basic Medicare premium, which is now $58.70 and is expected to reach $100 a month by 2011.
The actual premium for drug benefits could be more or less than $35 a month, provided that the drug coverage had the same overall value as the prototype defined by Congress.
The Senate Democratic leader, Tom Daschle of South Dakota, said he had "no intention to filibuster" Medicare drug legislation. But he assailed some features of the emerging plan. Premiums, he said, must be fixed, not variable, and Congress should not allow any gap in coverage.
Under Mr. Grassley's bill, federal officials would divide the country into at least 10 regions. In each region, Medicare beneficiaries would have access to at least two private plans known as preferred provider organizations.
Lawmakers expect such private plans to participate in Medicare, but cannot be certain. To ensure at least two plans in each region, the government could assume more and more of the financial risk, thus increasing the federal subsidy to private plans.
Medicare beneficiaries could enroll in the new private plans beginning in November 2005. But the government would authorize the use of drug discount cards next year to help the elderly save money on their medicines. Each low-income beneficiary would be eligible for a drug benefit of $600 a year in 2004 and 2005.
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