Drugmakers shifted their position on what shape a Medicare prescription drug benefit should take, setting off a round of political posturing last week. Advocates of a pharmacy benefit said they had shamed the industry into changing its position, and pharmaceutical firm representatives emphasized the need for a bipartisan proposal.
Prodded by bad publicity on drug prices, pharmaceutical executives met with top White House officials last week, but no statement about the meeting was immediately released. The meeting came after a drug industry trade group sounded conciliatory tones on the possibility of stand-alone legislation that would add prescription drugs to Medicare's array of benefits.
Previously, the drug industry said it would agree to a Medicare drug benefit only if the program was fundamentally restructured to help seniors pay the premiums to join private-sector health insurance plans.
Now the industry, led by its trade group, the Pharmaceutical Research and Manufacturers of America, says such legislation is unlikely to pass.
Seniors still must be able to afford prescriptions, however, so the PhRMA said it would consider a plan such as the one written by Sens. Olympia Snowe (R-Maine) and Ron Wyden (D-Ore.). It would allow seniors to buy prescription drug coverage and would provide extra support to low-income seniors.
"We are willing to consider and review an incremental prescription drug benefit as long as it could be plugged into comprehensive Medicare reform later," said PhRMA spokesman Jeff Trewhitt.
Meanwhile, Citizens for Better Medicare-a coalition that is partly funded by the pharmaceutical industry and includes some seniors' groups-aired a new round of television advertisements calling for bipartisan legislation. The message differs from the one in last year's ads, which warned the government to stay out of seniors' medicine cabinets.
The coalition declined to say how much it was spending on the advertisements or where they were airing, although they ran in Washington.
To try to shine a favorable light on the industry, the PhRMA released new data on the number of new drugs approved for consumer use in 1999 and drugmakers' spending on research and development.
Seniors' advocates said the industry changed its tack when it saw growing public momentum for a Medicare drug benefit. The issue is expected to be particularly hot because 2000 is a presidential election year and the federal government is beginning to run a budget surplus (See related story, p. 30).
"This is a way to avoid a tidal wave headed in their direction," John Rother, legislative director for the American Association of Retired Persons, said of the new approach.
Negative media coverage of drug pricing has beset the industry in recent months. Many stories have focused on the prices paid by seniors without drug coverage compared with the costs to younger people who have prescription drug coverage.
"Seniors are buying retail, and we need to help them buy wholesale," said a House Democratic aide, who requested anonymity.
However, a House Republican aide, who asked not to be identified, said he found the pharmaceutical industry's latest moves "perplexing."
House Republicans also appear to be recognizing that the prescription drug benefit could become political dynamite this year.
Sources said House Speaker J. Dennis Hastert (R-Ill.) is appointing a 15-member task force to examine how to extend drug benefits to seniors, although the group may focus on giving tax breaks to seniors who buy health insurance to cover their drug costs.