PhRMA's efforts to support the roll-out of the Medicare prescription drug benefit will begin with the use of industry sales reps to deliver educational material, incoming Pharmaceutical Research & Manufacturers of America Chairman Miles White (Abbott) told the association's annual meeting in Palm Beach, Fla. April 3.

"Starting this month, I am pleased to announce that PhRMA will kick off a broad education and outreach initiative enlisting the industry's 80,000 sales reps," White declared. "They will be asked to deliver CMS informational brochures and materials to physician offices, so that caregivers can tell their patients where to call with questions about enrolling in the new prescription drug benefit program."

The first priority will be to help ensure that seniors understand and enroll in the Medicare-endorsed discount card program that launches June 1 (¹ Also see "Medicare Rx Discount Program Includes Five Cards Offered Free Of Charge" - Pink Sheet, 5 April, 2004., p. 17).

"Early Feedback Is Vital"

PhRMA is redoubling its efforts to ensure that the new Medicare law is well received by seniors in the wake of polling data showing that the new law is not well understood.

Seniors' initial response to the Medicare prescription drug program will be critical to the future of the new benefit, outgoing association Chairman Robert Essner (Wyeth) said April 2. "Good early feedback is vital to getting the program started off on the right foot," Essner declared.

"PhRMA and our member companies can do a great deal to help get this new Medicare prescription drug benefit off to a good start."

"PhRMA will work with government agencies, seniors organizations and patient advocates to educate and to enroll beneficiaries," Essner said. The goal will be "to ensure that seniors understand their options, select the plan that is best for them and then actually enroll in the new drug benefit."

No Time To Celebrate

The enactment of the Medicare prescription drug coverage law in 2003 after a bruising legislative debate was a significant accomplishment for PhRMA.

"It should not go unnoted that this victory was the product of a 10-year effort to mount the case, enlist allies, build the defenses and muster the right arguments to finally succeed."

However, Essner suggested, the industry cannot afford to celebrate the victory.

"Unfortunately, the politics of Washington today have created skepticism and controversy about the value of this important legislation," Essner said. "Politics have cast a shadow over an achievement that everyone, especially those over age 65 and those who plan to be, should instead be celebrating," Essner continued.

"Despite what is being said, this law will not create a financial boon for our industry, but it will begin to deal with one of the most difficult challenges the U.S. has faced: the fact that some of our senior citizens are unable to afford medicines deemed vital to their health."

Card Plan "Must Work"

PhRMA's emphasis on helping the Medicare program get off to a good start was applauded by Sen. John Breaux (D-La.) during an April 3 address.

Breaux underscored the urgency of the effort. "The drug discount card program has got to work," he declared. "We're working with CMS and with [Administrator] Mark McClellan and [HHS Secretary] Tommy Thompson to do everything we can to make sure it is not too complicated," Breaux said. "It can be made to work. I'm convinced that it can."

Breaux specifically urged the industry to use its marketing savvy to help. "Marketing is more than just selling drugs....It is also explaining," Breaux said.

Using industry sales reps to boost PhRMA policy initiatives is becoming almost routine in the industry. In the wake of the 2001 anthrax scare, sales forces distributed bioterrorism preparedness materials (² Also see "PhRMA Anthrax Education Project Almost Ready; Lilly Launching CME Effort" - Pink Sheet, 4 February, 2002., p. 13).

Member companies have also been using their sales forces to promote industry discount card programs.

To help support the Medicare legislation, White suggested a second and potentially more difficult step for PhRMA: embracing the notion of pricing "transparency" embodied in the upcoming price comparison website for the Medicare discount card.

White included support for the Medicare legislation and pricing transparency as part of a far-reaching agenda for change at PhRMA (see ³ [A#00660150001]).

Running "Non-Interference"

Beyond the efforts to ensure that the Medicare law operates well, PhRMA will be defending the legislation on Capitol Hill.

One of the association's primary objectives will be to head off proposals to repeal the so-called "non-interference" language in the Medicare law.

The provision says that HHS may not "interfere with the negotiations between drug manufacturers" and Medicare drug plan sponsors. HHS also may not "require a particular formulary or institute a price structure" for drug reimbursement.

Democrats have seized on the language as evidence that the Medicare law is tilted towards drug companies rather than the interests of seniors (⁴ Also see "Lilly Analyzes Medicare Rx; Medicaid Changes May Be Big Plus" - Pink Sheet, 8 December, 2003., p. 4).

The provision helps ensure that patients will have access to more therapeutic options, CEO Alan Holmer maintained. "That language is included in the Medicare Act because it protects patients," Holmer declared.

"In other programs where the government 'negotiates' with drug companies, the government restricts access to needed medicines."

VA, Medicaid Restrict Access

Holmer cited the Veterans Affairs health system as one example. Under the VA, only one drug is covered in some categories, including cholesterol, glaucoma and prostate cancer. "Medicaid programs are even more restrictive in some states," he declared.

Holmer's comments also represent an argument against another potential challenge to the Medicare law: efforts to open up the VA prescription drug benefit to more veterans (⁵ Also see "Medicare Rx May Have Little Effect On VA Health System, Department Says" - Pink Sheet, 5 April, 2004., p. 12).

Holmer also suggested an element of hypocrisy in the criticism of the "non-interference" provision.

While critics portray it as "an evil creation of the pharmaceutical industry," it is essentially the same as a provision included in the Clinton Administration's Medicare bill introduced by the Democratic leadership in 2000, Holmer pointed out.

A Different Way To Contain Costs

Rather than give HHS price negotiating authority, the Medicare law relies on "market-based cost containment," Holmer noted.

"Many Americans take 'market-based cost containment' as code for no cost containment," he acknowledged. However, "I ask them to look at the facts and reconsider." Large private sector pharmacy benefit management companies "purchase on behalf of populations that greatly exceed the entire population of Canada," he pointed out.

The Congressional Budget Office supports PhRMA's view that giving HHS price negotiation authority would not produce significant savings beyond what private plans will obtain, Holmer noted.

"It Makes You Want To Cry"

However, he added, CBO did recognize that giving HHS pricing power could produce savings in classes where there are no therapeutic alternatives.

"The only impact of any proposal to repeal the non-interference language would be to single out for price controls...the most innovative breakthrough products," Holmer declared.

"If you want to create more, you provide incentives. If you want less, you provide disincentives. So some members of Congress say, 'Let's impose price controls,' a clear disincentive on companies that do what we want them to do most, that is, to take the huge risks to discover new breakthrough medicines."

"It is so pathetically wrongheaded and shortsighted that it makes you want to cry."

Holmer highlighted two other aspects of the Medicare law that PhRMA must defend.

Critics argue that the law does not do enough for poor seniors and "dual eligibles," he noted. In fact, he declared, "there is a particularly good benefit" for those with incomes under $14,000 per year. Finally, Holmer noted, critics of the legislation plan to revisit the debate over reimportation of pharmaceuticals.

Rx Industry Will Sell Medicare Bill; Card Launch Will Be First Test

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