US Medicare reforms under fire
to provide a prescription benefit for the elderly and disabled has
been slammed by the Democrats, who believe it will prevent US
states from negotiating price discounts with pharmaceutical
companies.
The legislation was signed into law by US President George W Bush on last month, and has been seen by industry watchers as a major boost to the drug industry's growth prospects over the next few years.
The Democrat Governor of Wisconsin, Jim Doyle, used party's weekly radio address earlier this month, to point out that Wisconsin currently uses its purchasing power to negotiate big discounts from drugmakers. The new act, due to come into effect in two years' time, effectively prevents the federal government from doing the same thing.
He alleged that the Act hamstrings the Medicare system by preventing its enormous, nationwide purchasing clout from being used to negotiate similar discounts. The Department of Veteran's Affairs, which looks after the interests of ex-servicemen, can negotiate price discounts, and these are sometimes enormous. For example the DVA purchases AstrZeneca's Zestril (lisinopril), a high blood pressure medication, for 10 cents a tablet. At retail prices the medication is $1.20 a pill.
"Instead … American taxpayers and seniors will be forced to foot the bill for greater drug company profits, " he said.
Wisconsin has been particularly active in trying to reduce its drugs bill, and has been holding discussions with Canadian suppliers to see if it can tap into Canada's cheaper priced medicines market and cut costs. Cross-border supply is being fiercely resisted by the drug industry and the US Food and Drug Administration (FDA) has also expressed its concern at a move that would make it harder to oversee the drug supply chain.
In his address, Doyle called for the legislation to be amended to enable the federal government to negotiate with drugmakers and allow seniors to import their medicines from Canada.
Opposition to the act has also been voiced by Senate Minority Leader Tom Daschle. He maintains that the legislation contains nothing to level off or reduce the costs of drugs.
Sen Daschle recently introduced legislation which would permit Medicare to negotiate discounts and allow US consumers to import their prescription medicines from lower-priced countries.
He believes the bill has some good points - for example encouraging the use of generic medicines and increasing the number of low-income people who can receive cover - but is very unhappy that it does not provide any measures for price control of medicines.
