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Legislative Update - June 2002

Congress Debating Medicare Prescription Drug Benefit: Call Your Congressman Now !

Legislative Update - June 2002
Alyson Welsh, Director of Government Affairs

Congress Debating Medicare Prescription Drug Benefit: Call Your Congressman Now !

The United States Congress is likely to approve a Medicare Drug Benefit before the November 2002 elections. Health and Human Services Secretary, Tommy Thompson, recently stated that Congress will approve a Medicare prescription drug benefit and that the Bush administration supports the U.S. House of Representatives’ proposal to create such a benefit. OPA has serious concerns about these proposals. Patients must have freedom to choose and not be forced into mail order.

The U.S. House of Representatives’ Republican proposal for establishing a Medicare Drug Benefit was unveiled by Speaker of the House Dennis Hastert (R-Illinois) on May 1, 2002. The Republican proposal would require $350 billion over a 10-year period. Under this proposal, Medicare beneficiaries would pay monthly premiums of $35 to $40, with a $250 annual deductible. Medicare beneficiaries would receive coverage for 70 to 80 percent of the first $1,000 of their annual prescription drug costs and coverage for 50 percent of their annual costs between $1,000 and $2,250. Senior citizens would have to cover 100 percent of their annual prescription drug costs between $2,250 and $5,000. But 100 percent of their prescription drug costs would be covered after the $5,000. This proposal would also cover all drug costs for beneficiaries with annual incomes of less than 135 percent of the federal poverty level, and seniors with annual incomes slightly above that level would receive aid on a sliding scale.

Other provisions of the proposals are:

• Pharmacy Benefits Managers (PBMs) will contract to provide the benefits under the federal program (referred to as Prescription Drug Plans);
• No language to ensure seniors will have the pharmacy of their choice;
• No provisions prohibiting the seniors of being steered toward mail order;
• PBMs will be put at “full risk” which usually means lower reimbursement and greater use of mail order;
• Seniors will be guaranteed “access to negotiated prices” before they meet their deductible, generally referred to as “price controls” on pharmacies;
• Coverage for medication therapy management is provided, but no guarantee that pharmacy will be reimbursed for these services;
• A mandate that pharmacies disclose drug price differentials between the prescribed drug and the generic equivalents.

The Senate Democrats on Capitol Hill have also introduced a Medicare Drug Benefit proposal under the leadership of Senators Bob Graham (D-Florida) and Zell Miller (D-Georgia). Their bill also relies exclusively on PBMs and their “cost containment” tactics. Under the Democrat proposal, PBMs would be able to use all of the methods they use in the private sector to manage costs.

It is extremely important for you to contact your federal legislators to express pharmacy’s opposition to these proposals. Phone calls, e-mails and letters are necessary to inform your U.S. Representative and U.S. Senator on what their constituents think of these proposals. Please refer to your OPA Legislative Directory for the addresses and phone numbers of your U.S. Representatives, or check the OPA website at Please act quickly as Congress is expected to move quickly on these proposals! Please send correspondence to their district offices. Members on Capitol Hill are still not receiving mail in a timely manner due to the events of September 11, 2001. Your letter may make the difference!

United States Senators - Ohio

U.S. Senator George Voinovich
200 N. High Street, Room 600
Columbus, Ohio 43215

U.S. Senator Michael DeWine
37 W. Broad Street, Room 970
Columbus, Ohio 43215

OPA Presents Cost Savings Proposals to State Officials

OPA presented costs savings alternatives for the state’s Medicaid program to officials from the Medicaid Department and Taft administration at a hearing on May 13, 2002. OPA has been working with the Ohio Department of Jobs and Family Services (ODJFS) to create alternative approaches to the state’s budget deficit, particularly in Medicaid pharmacy services. OPA’s proposals included disease management programs (asthma and diabetes) for pharmacists and reimbursing pharmacists for recommending OTC medications for self-treatable illnesses, thus preventing emergency department visits for such illnesses. OPA will continue to work with ODJFS on implementing these recommendations.

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