The National Medicare Prescription Drug Congress

21 May

Drug CongressWith a deadline of June 1, 2004, looming for the beginning of the Medicare Prescription Drug Plan (PDP) Discount Card program, a consortium of more than 30 organizations co-sponsored the National Medicare Prescription Drug Congress on Capitol Hill in Washington, DC, from February 25-27, 2004. The main objective was to assess the various areas of health care that will be affected by the new Medicare Modernization Act (MMA), formerly called the Prescription Drug, Improvement, and Modernization Act of 2003 (DIMA).

Major goals of the congress were to summarize the new legislation (including the Drug Discount Card program); to explain its implementation and time frame, as set forth by the Centers for Medicare & Medicaid Services (CMS) and for the Food and Drug Administration (FDA); and to discuss the effect of the MMA on pharmaceutical manufacturers, health insurance plans, pharmacy benefit management (PBM) companies, state Medicaid plans, and health care professionals. kamagra soft tablets

The three-day meeting featured many health care experts from various government and private sectors. This article summarizes the main perspectives of the congress as echoed by six selected speakers from different areas of health care:

  • The Honorable Tommy Thompson, Secretary of the Department of Health and Human Services (DHHS)
  • Thomas Scully, former administrator of the CMS
  • Mark McClellan, FDA Commissioner
  • Governor Dirk Kempthorne of the state of Idaho
  • Fred Hassan, Chairman and Chief Executive Officer of Schering-Plough Corporation
  • Barrett Toan, President and Chief Executive Officer of Express Scripts

The DHHS Perspective

On the first day of the meeting, Secretary Tommy Thompson discussed the impact of the MMA on health care from the DHHS perspective. He began by stating:

“It [Medicare] was a law that needed to be updated. It is not perfect, but it needed to be done.”
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He pointed out that the MMA will foster medical advancement for American senior citizens and that it will subsequently improve access to health care and will enable preventive disease management.

According to DHHS estimates, two million Medicare Advantage recipients (formerly Medicare Plus Choice) will be paying lower premiums via cost sharing. Approximately another 3.4 million people will receive enhanced benefits, as the existing 32% of beneficiaries who currently have coverage for brand-name prescription medications is expected to rise to 45%.

Mr. Thompson emphasized that the MMA will add “transparency to the prescription drug market” because the prices of medications will be listed and updated regularly on the

CMS Web site. This will allow beneficiaries and outside organizations to compare plans and costs online. He mentioned that no matter which organizations apply for the ability to cover the new Medicare PDP Cards— such as manufacturers, PBMs, pharmacy chains, and drug wholesalers, among others—all medication costs through the prescription drug programs will be visible to the public.

Table 1   Low-Income Benefit Packages

MonthlyMedicareGaps in
Income LevelPremiumCoverageCo-pay                           Coverage
135% below federal poverty level*$0Partial coverage;$2 for generic drugs and $5 for                  None
no deductiblebrand-name products;
up to $3,600 out-of-pocket limit, then $0
135%-150% below
federal poverty levelfSliding scale:]:Partial coverage;$2 for generic drugs and $5 for                  None
$50 deductiblebrand-name drugs;
15% up to $3,600 out-of-pocket limit

As outlined in the MMA legislation, low-income beneficiaries who are 135% below the poverty level will have $2 generic and $5 brand co-pays, respectively, up to the catastrophic coverage level, set for this group at $3,600 (Table 1). Those who are 135% to 150% below the poverty level will have $2 generic and $5 brand co-pays, up to the catastrophic level of $3,600 as well. At this point, they will be responsible for a 15% medication co-pay. Those above 150% of the poverty level will have variable co-pays and deductibles; these include a $35 monthly premium, a $250 deductible, a 25% co-pay up to an expenditure level of $2,250, then a 100% co-pay, for up to $5,100 in medication expenses (the “donut hole”). At the $5,100 expenditure level, catastrophic coverage begins, and these beneficiaries will be responsible for a $2 generic and a $5 co-pay, respectively, or a 5% co-pay, whichever is greater (Figure 1).

Figure 1 Prescription Drug Plan (PDP) breakdown for 2006Figure 1 Prescription Drug Plan (PDP) breakdown for 2006 for Medicare beneficiaries above 150% of the poverty level. (From Department of Health and Human Services.)

Mr. Thompson stressed that the plan allows approximately 11 million seniors to gain the opportunity to have affordable coverage. He also mentioned transitional assistance programs, a part of the Drug Discount Card, which would give $600 as immediate relief to all beneficiaries who are 135% below the national poverty level from June 2004 to January 2006.

Secretary Thompson discussed the hot topic of drug reimportation as well. According to the current law, drugs can be re-imported as long as the Secretary of DHHS certifies that the medications are safe. However, Mr. Thompson said that he is unable to certify their safety at present. In late 2003, the FDA, after conducting a random inspection, found that more than 80% of re-imported medications were mislabeled, counterfeit, improperly stored, not fit for human consumption, or in violation of other FDA medication laws. As a result, he stated that the DHHS would set up a commission with the FDA to study the practice of re-importation and to report to Congress by December 1, 2004, on whether and how it could be accomplished. (For more on this topic, see “The FDA Perspective” on the next page.)