Drug Benefits for Seniors May Be Key to N.H. Senate Victory
WASHINGTON, April 25–Seniors who have had to choose between the food on their plate or the pills that keep them healthy will be making another important choice this November, when the rise in health care costs promises to return as a key issue for New Hampshire voters in the upcoming U.S. Senate race.
Governor Jeanne Shaheen, the only declared Democratic candidate for Senator Bob Smith’s seat, testified this week (DATE) before the Senate Commerce, Science and Transportation Committee, which began hearings on legislation to limit current patent protections for drug companies.
In her appearance before the U.S. Senate committee Shaheen said that rising health care costs ranks as the No. 1 issue in New Hampshire. “It’s the issue I hear the most about as I travel around the state, and the cost of health care is driven by the cost of prescription drugs,” she said.
Shaheen addressed the need to close loopholes in the 1984 Hatch-Waxman Act, which was created to spur generic drug competition and provide additional patent protection for research-based brand-name drugs. Hatch-Waxman allows generic drug manufacturers to get products to market once a brand’s patent expires, usually after 12 years, but also allows 30-month extensions if the brand-name company sues a generic manufacturer for infringement of its patent. Pharmaceutical companies have been criticized for manipulating the patent extension loophole by filing frivolous appeals to prolong drug patents and keep generic versions off the market.
Prescription drug spending went up 17 percent in 2001, and drug expenditures are expected to continue to increase by more than 12 percent per year over the next 10 years. It has been estimated that greater use of generics could save consumers $8 billion to $10 billion each year. For example, a prescription for the blood pressure drug Cardizem costs $1.45 per pill, compared to $.22 for the equally safe and effective generic version, a savings of 85 percent.
New Hampshire spent $41.7 million in 1996 on prescription drugs through Medicaid, but by fiscal year 2001 spending more than doubled to $88 million. Of the 17 brand-name drugs whose patents will expire within the next two and a half years, from the allergy pill Claritin to the depression relief drug Wellbutrin SR, an estimated 50 percent savings by marketing generic versions of those drugs would save $2.5 million for New Hampshire consumers, according to a study by the Business for Affordable Medicine coalition.
The problem disproportionately affects seniors; an AARP report shows that Americans 65 and older, who are eligible for Medicare and who represent 12.4 percent of the population, account for more than 40 percent of all drug spending.
In New Hampshire, a number of initiatives have been taken to offset health care costs for seniors: a recent program urging pharmacists to substitute generic drugs for brand-name ones where possible; creation of a tri-state purchasing pool with Maine and Vermont to acquire discounted drugs at a bulk rate; and distribution of pharmaceutical discount cards to seniors.
Last week the New Hampshire Senate voted unanimously for a bill crafted to bring down health care costs in the state. Prescriptions would be screened before being dispensed and generics substituted where possible, unless doctors specify that brand-name drugs are needed.
For low-income seniors in the Keene area, there are several pharmaceutical assistance programs that announce offers by drug companies of free or reduced-price medication. The Medication Assistance Program, run by the Cheshire Medical Center, serves as a “go-between” for finding special discount prices and helps seniors fill out the required paperwork. With more than 800 patients using the service, the total monthly savings are significant: $81,787 just this past February, according to Hayley Compos, the program’s coordinator. The program provides benefits similar to what is available on the Internet, but makes the process more comfortable for seniors who prefer one-on-one assistance.
But nothing comes easily in the struggle for senior assistance, because even after a qualified applicant requests a drug, it is uncertain it will ever arrive. “There are changes every day,” Compos said. “A pharmaceutical company can just say ‘I don’t feel like giving away this medication anymore,’ and they don’t have to notify me, and since it usually takes four to six weeks for medication to start arriving, I have no idea that it’s not going to be coming in.”
The lack of networking between small referral services around the state pushed Martha Bauman, a long-time advocate of prescription drug coverage, to start a statewide task force called the Monadnock Senior Advocates almost a decade ago. The group, she says, provides issue-oriented information such as a senior resource guide, develops partnerships with other senior service providers and hosts an annual event to honor the contributions of older residents.
Bauman says a major problem is that many seniors feel unable to improve a rapidly worsening scenario for medication users, though, she adds, as education increases, seniors are “becoming more politicized.” By empowering seniors, the group hopes to influence state health policy decisions.
Another recent initiative is the Medication Bridge Program, created two years ago by State Sen. Beverly Hollingworth, D-Hampton, which uses a software system to network 40 statewide pharmaceutical assistance programs and keep track of applications and provide technical assistance. More than 8,000 adults and children received an estimated $7.5 million in free medications in 2001 through the program.
The program’s director, Bernice Cameron, who also worked with the nonprofit Foundation for Healthy Communities to distribute informational pamphlets listing statewide assistance programs, communicates regularly with drug companies. “Everyone badmouths the pharmaceutical companies, but when we’ve appealed to them one-on-one, they’ve really bent over backwards to get assistance to the people who need it,” Cameron said. In 1999, pharmaceutical companies provided more than 2.7 million prescriptions valued at approximately $500 million for 1.5 million patients through patient assistance programs.
Though she considers the Bridge program a “Band-Aid solution” to the more important issue of securing federal financing for prescription drug coverage, she said it is a necessary service for New Hampshire seniors, especially in a state with less money collected from taxes and consequently fewer services than other New England states.
Some physicians believe that the assistance programs are not merely Band-Aid solutions, but can also create building blocks for a government consensus on how to make cheaper drugs available. “They’re trying to get their foot in the door now rather than deal with the government later on,” said Bill Siroty, an Amherst internist.
A major barrier to achieving a viable assistance program has been, for many administrators, the impossible burden of paperwork that the drug companies require. “It’s an administrative nightmare,” said Christine Spicher, Keene’s human services director.
Even for physicians, Siroty argues, current drug benefit plans are confusing and poorly managed. “As a doctor, I’ve seen that it’s become this patchwork quilt of different benefit plans run by different drug insurance companies, and it’s impossible to tell what plans patients are on,” he said.
With the population of seniors expected to double in the next 20 years, drug coverage is becoming critical. One interesting trend indicates that as insurance companies continue to cut drug coverage, and as Medicaid provides for the poorest among the elderly, soaring drug costs are now affecting the mid-range income level of seniors. “It’s become a middle-class problem,” said Steve Hahn, an AARP spokesman.
“Prescription drugs are everybody’s concern, whether you’re a senior or a single mom or working without insurance,” said Carmalina Nims, director of the Monadnock United Way.
Many New Hampshire seniors have even looked north to Canada for low-cost drugs, either organizing bus trips or ordering the medication on the Internet at often half the price in the United States. During the 2000 presidential campaign, some groups challenged candidates to “get on the bus” with seniors going to Canada to buy reduced-rate medications.
Next month, the Alliance for Retired Americans plans to send a bus from every state that borders Canada across the border to draw attention to the issue of affordable drug programs. “I promise you this, seniors will make it an issue in the November elections,” said Bette Cooper, the Alliance’s spokeswoman. “[Candidates] will face a very irate electorate that will be very vocalá. They will have things to say at the ballot box.”
In 2000, Congressman Charles Bass (R-NH) helped pass the Drug Import Fairness Act to prevent the Food and Drug Administration from improperly stopping the importation of safe and less expensive drugs manufactured abroad. Bass maintains that the price caps lead to higher prices in America, which has a free market in pharmaceuticals, by requiring U.S. taxpayers to subsidize the high cost of drug research while countries like Canada keep their drug costs artificially low through mandatory price controls.
Senator Smith also spoke in favor of the reimportation of prescription drugs. “That’s free trade, and if (seniors) can get them cheaper and wish to buy them cheaper, then absolutely” they should be able to buy their drugs from abroad, he said.
Shaheen, in her testimony before the Senate Commerce Committee on Tuesday, said that the reimportation of drugs from Canada was crucial to helping New Hampshire seniors obtain their medication. “Many of my constituents go across the border to buy their drugs, and the only difference is the price. I see it as an issue of fairness. Why can they get their drugs so much cheaper in Canada?”
A bill soon to be debated in the Senate to limit current patent protections for drug companies has the pharmaceutical industry up in arms. The bill’s sponsors, Senators John McCain, R-Ariz., and Charles Schumer, D-N.Y., say that their bill would speed the entry of generic drugs to the market and “achieve monumental savings for seniors and familiesáupwards of $71 billion over the next 10 years.”
Jeff Trewhitt, spokesman for the Pharmaceutical Research and Manufacturers of America, says PhRMA is “adamantly opposed” to the bill, calling it “heavily tilted in favor of the generics industry.”
According to PhRMA, the number of generic drugs has tripled in the past 18 years, and of the generic drug applications submitted to the FDA for approval, 94 percent were given a “smooth transition,” Trewhitt said, while only a tenth of brand-name drugs ever enter the market. PhRMA contends that if Hatch-Waxman is amended, there will be less innovation, research and development of new drugs. Critics argue that the drug industry – America’s most profitable industry-spends more than $1.3 billion a year in advertising new brands, nearly double what it spends on research.
A number of bills to include a prescription drug benefit in Medicare have been introduced in the last few years. In June of 2000, both Congressmen Bass and John Sununu supported the Medicare Rx 2000 Act to guarantee voluntary prescription drug coverage, which narrowly passed the House. The plan promised to subsidize private insurance companies and health maintenance organizations to offer prescription drug coverage, which the insurance industry opposed, saying that it would be too expensive.
Last year’s prescription drug benefit plan, which would have provided $300 billion under Medicare, was defeated in the Senate. This year’s legislation would add an additional $50 billion, but advocacy groups say that amount is still inadequate. The Leadership Council of Aging Organizations argued that the $350 billion would cover, on average, only $2 out of every $10 beneficiaries will spend on prescription drugs. AARP spokesman Hahn said the bill would cover only basic costs and should include a “reserve fund” to help alleviate economic shocks as well as rising premiums.
“Our members are willing to pay for Medicare, but they want to see a good deal first,” Hahn said.
During the last session of Congress, Sununu co-sponsored a drug company-backed bill to extend patents on the allergy drug Claritin and seven other drugs and would have produced fewer generic options and higher prices.
Sununu supports pharmaceutical companies’ quests for patent extensions under the Hatch-Waxman act “if there was a delay in government approval of five years or more.” Though the legislation promises 20 years of patent exclusivity, most companies see only about 12 years of market time once the FDA approves the drug.
“Sununu has distinguished himself as a champion for the drug companies,” said Colin Van Ostern, communications director for the New Hampshire Democratic Party.
Senator Smith has voiced his support for the Schumer-McCain legislation. “I would be in favor of closing those loopholesá To extend those patents would not be in the interest of seniors,” he said, pointing out the difference between his stance and that of Sununu’s on closing the Hatch-Waxman loopholes. “I think there’s a huge difference between the two of us on prescription drugs. He favors extensions of patents, and I do not.” Sununu is challenging Smith for his seat in September’s primary.
Bass said he also supports manufacturing companies who seek patent extensions, within the scope of the law. “If for some reason a patent infringement took place, and an extension was permitted, the drug companies should have to justify or prove that the infringement existed,” he said.
Bass also warned that there should be a limit to how much Medicare can provide to seniors for pharmaceutical assistance. “This should not be a question of ‘see how much you can get,’ ” Bass said of senior advocacy groups that demand higher coverage. “Higher costs will make the premium higher, with the result that less people can afford it.”
With pressure from interest groups and senior constituents on the rise, many lawmakers expect a Medicare prescription drug benefit to be enacted by the end of the year.
“We’re expecting the House to act before Memorial Day,” Hahn said. In fact, both Sununu and Bass said they were committed to pushing legislation through this year.
Shaheen’s spokeswoman, Pamela Walsh, says the governor has written to each New Hampshire lawmaker to support a voluntary prescription drug plan under Medicare, and Shaheen said her opponents in November’s Senate race have not worked toward such a plan.
“They have not supported prescription drug benefits and efforts to lower the cost of drugs for people,” Shaheen said of Smith and Sununu.
The governor urged New Hampshire citizens to push for change by pressuring their representatives in Washington.
“What people can do is to lobby their congressional delegation and urge them to close those loopholes in Hatch-Waxman that keep people from having access to lower-cost generic drugs,” Shaheen said. “People are still going to have access to brand-name drugs, and if someone wants to spend more on their drug of choice, they can do that, but they should also have access to the generic drugs. It’s an issue of consumer choice.”
Published in The Keene Sentinel, in New Hampshire
