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Biotech / Medical : PFE (Pfizer) How high will it go? -- Ignore unavailable to you. Want to Upgrade?

To: Anthony Wong who wrote (7040)	2/18/1999 6:39:00 PM
From: Anthony Wong	Respond to of 9523

Drug Makers Support Getting Seniors Drug Coverage Through HMOs Bloomberg News February 18, 1999, 3:49 p.m. ET Drug Makers Support Getting Seniors Drug Coverage Through HMOs Washington, Feb. 18 (Bloomberg) -- U.S. drug makers endorsed a proposal to make insurers bid for Medicare business, hoping that the new competition will lead health plans to offer expanded prescription coverage for senior citizens. The endorsement by the Pharmaceutical Research and Manufacturers of America is an attempt to head off proposals that would require health insurers serving Medicare beneficiaries to provide prescription coverage. Senator John Breaux, a Louisiana Demiocrat who chairs an advisory commission considering Medicare reforms, has said he might favor adding such a requirement to his plan to let insurers bid for Medicare business. Drugmakers want to leave that up to the insurers. ''We would prefer that this be done through competition as a result of a modernized Medicare system,'' trade group spokesman Jeff Trewhitt said after its board of directors executive committee voted on the Breaux proposal. The vote today restates the industry's long-held position. It has opposed Democratic legislation that would require Medicare prescription drug coverage in the traditional fee-for-service program. ''The industry has long favored something that kept government out of their shorts,'' said Ira Loss, industry analyst with HSBC Washington Analysis. Drugmakers fears that a Medicare prescription drug benefit would lead to price controls that would squeeze their profits. President Bill Clinton has called for a prescription drug benefit for the elderly, and Democratic legislators are crafting bills to extend prescription drug coverage to the 35 percent of senior citizens who now lack it. One introduced by Democratic Representative Tom Allen of Maine would allow pharmacies to acquire prescription drugs for Medicare beneficiaries at reduced prices. Passage Unlikely Those bills are unlikely to pass the Republican-controlled Congress. The Republican National Committee, for example, today blasted a Clinton budget proposal that would reduce Medicare reimbursement for cancer chemotherapy drugs, one of the few medicines covered by the program. The debate is likely to carry into the year 2000 presidential elections, where the industry could face unfavorable publicity over its pricing practices. ''This is the big issue in the Bush-Gore (presidential) campaign,'' Loss said. The industry's formal stand provides Breaux with a powerful ally for pushing his Medicare overhaul proposal. The Louisiana Democrat has yet to gain the 11 votes for the commission to send its recommendations on Medicare to the Republican-controlled Congress and U.S. President Bill Clinton. Breaux is counting on support from the panel's eight Republican appointees and from Democratic Senator Robert Kerrey of Nebraska. Yet other Democrats on the panel want prescription drug coverage included in a Medicare standard benefits package. Compromise Breaux has been considering a compromise that would require health insurers, including sellers of policies that supplement traditional Medicare benefits, to offer a prescription drug benefit. The drug makers didn't rule out supporting such a plan, but didn't come out in favor of it today either, Trewhitt said. ''What we are saying is it is our strong hope and belief this can be done through the competitive marketplace,'' Trewhitt said. Medicare spending is expected to explode once 77 million baby boomers begin retiring after 2010. The commission, charged with preparing the program for that burden, says the program will grow to 28 percent of the federal budget in 2030 from 12 percent now. Competition Breaux's Medicare proposal would invite health insurers to compete for the business of senior citizens. HMOs and other insurers would negotiate annual premiums with the government. Senior citizens would choose from a menu of health plans, and the government would pay part of the premium. Seniors choosing higher- cost plans would contribute more toward their cost of coverage. Currently, 85 percent of Medicare beneficiaries are enrolled in traditional fee-for-service. The remainder are enrolled in HMOs, which have attracted senior citizens by offering drug benefits. Medicare payments to HMOs are based on a non-negotiable reimbursement formula that the health plans complain it is too low in many parts of the country. The commission is scheduled to meet Wednesday, and members have acknowledged it will be tough to meet the March 1 reporting deadline. --Paul Heldman in Washington (202) 624-1842 /mfr