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President Threatens Veto of Medicare Drug Changes,
Senior Advocates Push for Negotiated Drug Prices
Feb. 11, 2005 President Bush today threatened to
veto any changes Congress might make to the Medicare prescription drug
benefit that begins in January 2006, but his press secretary could not
identify what changes the President suspects may be coming. One
possibility are new demands by Medicare advocates for the government to
negotiate drug prices with the pharmaceutical industry, something the
bill now prohibits.
All week there has been bickering about the new
cost estimates for the Medicare. The new estimate says the first ten
years of the program will cost $724 billion. When selling the package in
2003, the administration said he would cost $400 billion, but later
revised that number to $534 billion. Most have now agreed it is a matter
of timing, with the original ten-year estimate including years prior to
the programs actual beginning.
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"I signed Medicare reform proudly and any attempt
to limit the choices of our seniors and to take away their prescription
drug coverage under Medicare will meet my veto," Bush said. He was
speaking at a swearing-in ceremony for Mike O. Leavitt, the new
secretary of Health and Human Services.
(See complete remarks by Press
Secretary Scott McClellan on President's veto threat at bottom of this
article.)
The new look at the high cost of the program has
renewed demands by senior advocates for a change in the law that would
allow the government to negotiate prices with the pharmaceutical
companies. The bill specifically prohibits this practice that most say
would result in much lower prices for drugs.
Because the Medicare law explicitly forbids the
government from negotiating drug prices with the pharmaceutical
industry, older adults and people with disabilities will have high
out-of-pocket costs, pharmaceutical companies will get their asking
price (or close) and the American taxpayer will foot the bill, said a
newsletter issued today by the Medicare Rights Center.
Moreover, this ban on negotiation is unprecedented. It is inconsistent
with Medicare coverage of all other services, for which Medicare
negotiates prices, and also with prescription drug coverage in every
other industrialized nation in the world and the U.S.s own Department
of Veterans Affairs, they added.
To avoid such reckless mismanagement of public
resources, we must remind Congress that it is in its power to amend the
Medicare law to allow Medicare to negotiate prescription drug prices on
behalf of the 42.7 million Americans with Medicare, they continued.
Such bulk-purchasing of prescription drugs ensures
lower costs for older adults, people with disabilities and ultimately,
the American taxpayer. Negotiating prescription drug prices is the
fiscally responsible, business-savvy and ethical thing to do. Former
Secretary of Health and Human Services Tommy G. Thompson knew that, and
said so (but only on his way out of the Administration).
On thing remains clear: the program, as currently
designed, is costly and does not make the best use of public funds. When
you compare the high cost to the taxpayer of Medicare Part D with the
benefit that people will be receiving, you cannot help but wonder where
all the money is going, said a newsletter issued today by the Medicare
Rights Center.
A person with Medicare with typical drug expenses
of $3,167/year will have to spend at least two-thirds of that amount out
of pocket even with Medicare drug coverage. So who, pray tell, is
benefiting from this costly benefit?
When we remember that the Medicare law is
projected to increase drug makers profits by $139 billion, or 38.4
percent, over eight years, the answer becomes clear, the newsletter
said.
Press Briefing by Press Secretary Scott
McClellan on Bush Veto Threat
Q Scott, the President used a word today that we
don't often hear from him, saying he would veto any Medicare legislation
that came his way -- if there is such legislation -- that would weaken
the prescription drug benefit, in his view. Did he have something
specific, either someone in Congress specific in mind or some proposal
specific in mind when he said that today?
MR. McCLELLAN: He was making a general statement.
There are some who would like to undermine the reforms we've put in
place to expand benefits for America's seniors and make health care more
affordable for our seniors. The President was making very clear to
America's seniors that we stand with you, we made a promise to you, and
we're going to keep that promise. And he's not going to let anybody take
away what we have provided to you that you waited on for way too long.
Q Is it just -- is his veto threat just on the
parameters -- the benefits of the prescription drug benefit? Senators
McCain and Kennedy, for example, have talked about legislation that
would revisit the issue of bulk purchasing by the government. Others
have talked about revisiting the reimportation issue in a way
inconsistent with the test laid out by the task force of the
administration. If you touch those things, but not prescription drug
benefit, is that a veto --
MR. McCLELLAN: That's why I said the President was
making a general statement. I'm not trying to get into individual,
specific ideas that people have talked about, but you've heard from a
number of people who are seeking to undermine the Medicare reforms we
put in place for America's seniors that provides them with prescription
drug coverage, that provides them with more preventive care, so that
they can have the care they need, when they need it, and have more
affordable health care. Seniors will realize significant savings through
this. The President was making a very strong statement that we made a
promise to you; we're going to keep our word, we're not going to let
anybody undermine these important reforms that we are working on putting
in place right now.
Q Would he consider revisiting the bulk purchasing
issue, for example, undermining the reforms in place?
MR. McCLELLAN: We've made our views very clear when
it comes to that. I think that all you need to do is look at the
Congressional Budget Office, and their analysis. They looked at the
issue and pointed out that there would not be any significant savings
through that approach; that the approach that was put in place, where
private plans can negotiate those prices is an approach that is going to
provide seniors with significant savings. And we believe that's the way
to move forward on implementing these reforms.
It's historic legislation that modernizes Medicare
for the first time in its history. It provides greater competition and
choice for seniors. It gives them more options and better benefits. It
gives them the kind of preventive care they need to prevent costly
surgeries from happening in the first place. As the President said
earlier today, it made no sense why Medicare wasn't providing some of
that coverage and bringing competition and choice into Medicare. We'll
improve the quality of care, make it more affordable, give seniors what
they have waiting on for far too long, and it will help provide savings
to Medicare in the long-run.
Q To just sort of refine on John's point, then,
Scott. These are Republican majorities we're talking about on Capitol
Hill, so when the President is issuing a veto threat, presumably he's
saying to members of his own party, he's going to fight their desires to
scale back the growth of this project. How does that play for this
Republican President?
MR. McCLELLAN: I think that you've seen some
Democrats in recent weeks talking about undermining these reforms. And
in terms of Congress, we're working very closely with the congressional
leadership to address the important priorities for the American people.
The congressional leadership, I think, recognizes the important of
putting these reforms in place. The Medicare reform legislation enjoyed
some strong support. And the President believes now is the time to focus
on putting those reforms in place. And we're going to continue to work
with Congress to make health care more affordable and more accessible
for all Americans.
Q So it's a veto threat to congressional Democrats?
MR. McCLELLAN: Again, the President was making a
general statement, Carl. I know you're trying to get me to get into
specific people. The President made a general statement. And you heard
from members of the Democratic Party earlier this week who really were
trying to move forward on an attempt to undermine the reforms that we
put in place. We're not going to let that happen. The President was
making a general statement that these reforms are something that we
promised to America's seniors, and we're not going to let people take
them away.
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