The price for seniors

When the attack from drug manufacturers comes, it won’t be subtle. But then, when your industry posted $24.5 billion in profits last year, you have little incentive to be subtle. You have, however, a bank truck full of incentives to destroy Rep. Tom Allen’s bill that tries to give seniors a break on increasingly expensive medicine.

The pharmaceutical industry, which set a record in 1997 by spending $74.4 million on lobbying Congress, is claiming poverty. If older Americans have access to less-expensive medications, research in this country will disappear, its lobbyists claim. The bill is “a dagger pointed at the hearts of America’s senior citizens,” they announced recently, telling members of Congress that, “price controls have never produced anything but bureaucracy and shortages.”

Wow.

And this is even before the bill has been debated. Is Rep. Allen demanding that these drugs be given away?

Well, no, actually what his bill would do is offer seniors the same price for drugs that, for instance, veterans already receive, the sort of discount the pharmaceutical industry already offers to health maintenance organizations. The industry reportedly is prepared to spend heavily to defeat the measure. Apparently it believes that a sweetheart deal with HMOs is good for business, but a similar break for seniors is the worst thing since the Black Plague.

The bill, however, is not a disease but a reaction to a study this year by the Department of Health and Human Services, which found that Medicare paid twice as much as the Department of Veterans Affairs for the same drugs in the same quantities. The higher charge costs Medicare more than $1 billion annually.

The price disparity lies in how the drugs are purchased. Medicare reimburses doctors and suppliers for the drugs they administer or supply to beneficiaries. The VA buys drugs directly from manufacturers or wholesalers based on the Federal Supply Schedule, a list of drug prices negotiated by the federal government and pharmaceutical companies. The key to the VA purchases and to Rep. Allen’s proposal for Medicare is that the prices are negotiated, so the industry itself helps set them.

The scary dagger, then, is at seniors’ throats only if the drug industry helps put it there.

Chances are excellent, however, that the industry won’t mention this during its advertising and lobbying blitz against the Allen bill. Instead it will use every emotional image it can dream up to stop legislation that will cut into their profits, even if it also means stopping a bill that allows more older Americans to afford medication. And there’s nothing subtle about that.