Importation bill has chance to offer example of concern for ALL U.S. citizens, leadership, innovation

The news hit with the suddenness of a surprise attack early Saturday, June 20—the Pharmaceutical industry had made a late night call to Senator Max Baucus (D-MT) to tell him that is was willing to cooperate by pledging $80 billion over the next decade in resolving one of the biggest problems (and resulting criticisms) of Medicare Part D, The Infamous Doughnut Hole.

The facts surfaced by Monday afternoon however, as it became evident that pharma’s move really was nothing more than a carefully crafted and possibly successful attempt to circumvent several challenges facing it—the possibility of price negotiation for Part D medicines, and the potential contribution that could be provided by allowing personal importation of safe, affordable medicines from licensed, registered pharmacies in Tier One designated countries.
The Doughnut Hole should have been called ‘The Black Hole.’ Seniors were forced to continue paying their premiums, but their coverage was ‘suspended’ when drug costs reached $2250. They had entered The Doughnut Hole, where they would pay 100 percent of their prescriptions for the next $3600—even though they still had to pay for their premiums (a windfall for insurance companies). After paying the $3600, the ‘catastrophic’ level was reached, and the seniors who had survived The Doughnut Hole, were eligible for renewed coverage with low cost co-pays.

The fiscal and medical hit upon the elderly was immediate. Many seniors simply quit taking their medicines or began ‘splitting’ pills. Either action not only derailed the claimed hoped-for goals of Medicare Part D, it caused untold numbers of elderly to gamble their health, well-being and perhaps even their lives by the self-denial of vital medicines that had been forced on them by a pharmaceutical-influenced Congress that enacted Part D. Billy Tauzin, the former Congressman from New Orleans who was instrumental for many of the 11th hour (and 59 minute) changes that shaped Part D was rewarded with a multi-million-dollar position by PhRMA, the influential and well-heeled trade group for the drug companies.

A proposed solution to relieving the burden of The Doughnut Hole dilemma—price negotiation for drugs-- soon became a favorite of politicians, and repeated calls were made from untold numbers of stumps, town hall meetings, and locales where the pols could promise the elderly that help was on the way.

With the election of President Barack Obama, a Democratic House and a Democratic Senate, negotiation seemed ready to be moved from stump speeches to reality.

But, it is said that politics makes strange bedfellows. And, the push for healthcare reform soon created a lot of odd sleeping arrangements. Many of us winced when PhRMA joined with FamiliesUSA, a leading progressive, hard-working and well-respected advocacy group, to work for ‘healthcare reform.’ What, we asked, was the industry looking for? Images of the Fox in the Henhouse, the camel with his nose under the tent, flashed though our minds.

Added to this was the White House meeting President Obama arranged with industry groups representing insurance companies, PhRMA, hospitals, and other healthcare industry groups. Our concerns were quickly validated when a White House statement about pledges to cut the growth of health care costs was actually nothing more than a pledge to reduce the rate of growth by not increasing prices as much as before. The President needs to remember what John Kennedy said about big business special interest groups and what a bunch of SOBs they were.

The fact is that the ‘pledge’ was actually not a true savings. It would be a bit like buying your groceries at a store that has raised its prices 20 percent for the past few years. But, to ‘save money’, it says it will raise its prices only 10 percent next year, so instead of groceries that cost $100 per week in year one, the next year they would cost $110 instead of $120. The store owner could then tell consumers that each had saved $10 in year two, even though they were paying more for the same groceries. Only the rate of the increase was less than in previous years.

This type of math should have been the tip-off that the pharma ‘commitment’ to aiding seniors in The Doughnut Hole isn’t what it at first seemed to be.

On Sunday, President Obama issued the following statement about the agreement with the drug companies:

"I am pleased to announce that an agreement has been reached between Senator Max Baucus and the nation’s pharmaceutical companies that will bring down health care costs and reduce the price of prescription drugs for millions of America’s seniors. As part of the health reform legislation that I expect Congress to enact this year, pharmaceutical companies will extend discounts on prescription drugs to millions of seniors who currently are subjected to crushing out-of-pocket expenses when the yearly amounts they pay for medication fall within the doughnut hole any payments by seniors not covered by Medicare that fall between $2700 and $6153.75 per year. The existence of this gap in coverage has been a continuing injustice that has placed a great burden on many seniors. This deal will provide significant relief from that burden for millions of American seniors.

"The agreement by pharmaceutical companies to contribute to the health reform effort comes on the heels of the landmark pledge many health industry leaders made to me last month, when they offered to do their part to reduce health spending $2 trillion over the next decade. We are at a turning point in America’s journey toward health care reform. Key sectors of the health care industry acknowledge what American families and businesses already know - that the status quo is no longer sustainable. The agreement reached today to lower prescription drug costs for seniors will be an important part of the legislation I expect to sign into law in October. I want to commend House chairmen Henry Waxman, George Miller and Charles Rangel for addressing this issue in the health reform legislation they unveiled this week. This is a tangible example of the type of reform that will lower costs while assuring quality health care for every American."
It was to be Monday before the facts began to surface. Simply put, PhRMA had negotiated an arrangement that would become law only if Congress enacted comprehensive healthcare reform, a part of which would include expanded coverage for more Americans, creating new, additional and profitable markets for the pharmaceutical industry. It is distressing to once again witness the ability of pharma to define issues to its advantage. Perhaps I need a refresher course in civics, but why does the industry have to ‘agree’ to cuts that are intended to be a part of the governing legislation enacted by the U.S. Congress? What option do they have?

Also, why is the Obama Administration so ready to heap praises upon the drug companies, all of which have reaped whirlwind, virtually ensured profits at the expense of the American public that has been denied access to the health benefits provided by access to vital medicines because it must pay the highest cost in the world for its prescription medicines?

But, it is an ill-wind that blows no good. Last Fall, before the elections, a group of advocates for senior advocacy groups from areas across the country, met in Washington, DC to shape support for personal importation of prescription medicines from Tier One countries. At that time, the participants reached a consensus that the importation concept should be included as a part of discussion about comprehensive healthcare reform, a ‘third-leg’ of the stool, because such access to vital medicines is essential to the health and well-being of Americans. It also urged consideration of the beneficial budgetary impact that could be provided though the inclusion of personal importation of prescription medicines into Part D thereby remedying plan shortcomings while saving money for the elderly, protecting their health and creating real savings for the Plan.

Sources tell us that moves have made recently by supporters of importation to define a stronger argument for importation of prescription medicines within the framework of the healthcare debate. We applaud such action. Now, there is an additional opportunity to address the benefits of improved health and savings by fine-tuning the healthcare debate to explore other opportunities for personal importation and defining a role for personal importation in Medicare Part D. Senators Dorgan and Snowe, the two legislators most identified with importation, have issued a statement that reflects their realization that the pharma 'offer' really does not address the challenge of lowering prescription drug prices. And, already, there is a growing realization that the pharmaceutical industry's motives are self-serving.

It is time to call out the pharmaceutical industry. There are legitimate questions that deserve answers about the motives of pharma. It has reaped the benefits of guaranteed pricing for Part D that has led to windfall profits. The claimed or hoped-for savings,while beneficial to individuals, is too little-too late for many elderly. As to the claimed savings to be scored by the Congressional Budget Office, there is a growing realization that possible trade-offs to gain pharma support might actually lead to increased--and virtually guaranteed--sales and earnings.

There is a role for personal importation in helping provide a solution to providing safe, affordable prescription medicines for all Americans. We believe the pharma moves should lead to increased discussion of creating such access, free of what we believe to be unnecessary delays by empowering Secretary Sebelius to designate Tier One countries whose standards of oversight, safety, and efficacy meet of exceed those of the U.S.