Medicare Rights Center "The Big One"

From Tom Cooper, February 23, 2007

Asclepios

Your Weekly Medicare Consumer Advocacy Update
The Big One

February 22, 2007 • Volume 7, Issue 8

One of the biggest lies told by politicians who oppose letting Medicare negotiate lower drug prices is that doing so will make the Part D drug benefit look like the drug coverage offered by the Department of Veterans Affairs (VA) and, as a result, people with Medicare will lose access to medicines they need to stay alive and healthy.

After decrying the inadequacy of VA drug coverage, however, not one of these lawmakers takes the next logical step and proposes changes to improve the drug coverage our veterans receive.

Why is that?

Because the VA provides excellent drug coverage for our veterans. The charges against the VA are simply false and designed to scare older adults and people with disabilities, already battered by high drug prices and coverage gaps under Part D, into thinking price negotiations will make things worse.

Take for example the speech made on the Senate floor last month by Senator Charles Grassley, Republican of Iowa. Senator Grassley charged that the VA covered just one third of the drugs covered by Part D.

It’s just not true. In fact, the VA puts roughly the same number of unique chemical compounds on its formulary (list of covered drugs) as are potentially available under Part D and actually has more drugs (including different dosages and forms of the same chemical) as are potentially covered by Part D (4,778 versus 4,300). And not all Part D plans actually cover all these 4,300 drugs. Many of the drugs are either excluded from the formularies used by the private companies offering Part D or are subject to restrictions that effectively deny coverage—facts conveniently omitted by Senator Grassley.

Bush administration officials also claim that one million veterans have signed up for Part D, demonstrating the superiority of Part D over VA drug coverage. In fact, of the 2.5 million users of the VA drug benefit who are eligible for Part D, 400,000 were automatically enrolled in Part D by their employer or because they also receive Medicaid. Just 250,000—10 percent—have voluntarily signed up for a Part D plan, and there is no evidence that they have stopped getting their medicines from the VA.

The VA does use a formulary to steer patients toward, and away from, certain drugs, as do the Part D plans. When painkillers like Vioxx first came on the market, the VA evaluated their effectiveness, their risks and their costs and restricted prescriptions to those who truly needed the drugs. As a result, it protected veterans against a drug that was ultimately found to raise the risk of heart attack and was pulled off the market.

Another talking point for the opponents of price negotiations has been the exclusion from the VA formulary of the anti-cholesterol drug Lipitor, the most widely prescribed drug in the world. Instead of covering Lipitor, the VA covers other equally effective and less expensive anti-cholesterol drugs. The VA’s price for anti-cholesterol drugs declined from 93 cents per pill in 1999 to 60 cents in 2006. Lipitor costs about $2.45 for a 10 mg pill under Part D, over four times what the VA pays. Yet veterans who do need Lipitor can get it; last year the VA spent $34 million filling prescriptions for the drug.

Most important, the VA has been shown to do a better job of keeping the cholesterol of its patients at healthy levels than Medicare HMOs and other private plans even as it has held down spending by using a formulary to steer patients toward the most cost-effective drug.

That is the real reason drug manufacturers fear the new Congress will create a Medicare-run plan under Part D, with a formulary developed on the basis of clinical evidence and lower drug prices negotiated for all 43 million people with Medicare. U.S. sales of Lipitor brought in $7.8 billion for its manufacturer, Pfizer, last year. Under a Medicare-run drug plan, Pfizer would have to bring its price for Lipitor down to a level comparable to cheaper, equally effective anti-cholesterol drugs if it wants its drug put on the Medicare formulary.

That is why drug manufacturers are spending millions lobbying Congress not to allow Medicare to negotiate prices and provide drug coverage directly, instead of through private Part D plans. And that is why these scare tactics are being used. Drug manufacturers have a lot of lobbying battles on Capitol Hill, but stopping a Medicare-run drug benefit is the big one.

Medical Record

“So what would it mean if the government negotiated for lower drug prices for Medicare in a national system like the VA? It would mean having a more limited formulary…It would mean that instead of having 4,300 drugs available to them, beneficiaries would have about 1,200. If Medicare used a national formulary like the VA it would mean that 70 percent of prescription drug [sic] could not be covered by Medicare. Only 30 percent of the drugs covered today would be covered” (“Medicare Part D—How Would the Government Negotiate?” Floor statement of U.S. Senator Chuck Grassley, January 10, 2007).

“I have diabetes, fibromyalgia, arthritis and a bone disease called osteomyelitis. Out of the 11 medicines I need, I can only get one under Part D. I have been on this medicine for seven years and need to take it five times a day. But my plan put a quantity limit on it this year, so I can only take it three times a day” (Story submitted to the Part D Monitoring Project , Medicare Rights Center, February 6, 2007).

“The VA actually has more drugs (4,778) on its formulary than are potentially covered under Medicare Part D (4,300—not all plans cover all these drugs). In addition, the VA covers nonformulary drugs prescribed according to evidence-based guidelines, bringing the total number of drugs dispensed by the VA to 6,194. By contrast, people with Medicare must navigate a complex appeals process to obtain coverage of nonformulary drugs. Part D plans deny 95 percent of appeals. The Institute of Medicine concluded in 2000 that the VA formulary is ‘not overly restrictive.’ This finding is supported by statistics that show the VA does a better [job] in using prescription drugs to control their patients’ diabetes, high cholesterol and hypertension than private Medicare plans” (Myth #7, “Truth Is the Best Medicine,” Medicare Rights Center, Public Citizen and the National Legislative Association on Prescription Drug Prices, February 2007).

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