WASHINGTON WIRE
March 9, 2007
Issue 124
Senate Subcommittee Considers Drug Importation Bill
Medicare Advantage Cuts Possible, Ways and Means Ranking Member Cautions Colleagues
GAO Recommends Changes to Reduce Improper DMEPOS Payments
Top Story
Senate Subcommittee Considers Drug Importation Bill
On Wednesday, the Senate Commerce Subcommittee on Interstate Commerce, Trade and Tourism held a hearing on prescription drug importation.
Subcommittee Chairman Byron Dorgan (D-ND) and Senator Olympia Snow (R- ME) have introduced legislation that would allow FDA-approved drugs manufactured in one of 19 western, industrialized countries to be imported and purchased by consumers in the United States. The legislation would also establish a regulatory system for the FDA to monitor shipments of prescription drugs imported to the U.S.
The bill's sponsors believe drug importation would slow the rising prices of prescription drugs in the U.S. by increasing market competitive. AAPR recently released a report showing that the average price for wholesalers for several popular brand-name medications for Americans over age 50 increased nearly twice the rate of inflation in 2006. In 2004, the Congressional Budget Office estimated that legalizing prescription drug importation would reduce consumer and federal government spending on prescription drugs by $50 billion over 10 years.
Both the pharmaceutical industry and the Food and Drug Administration (FDA) oppose the proposed legislation. Billy Tauzin, president of the Pharmaceutical Research and Manufacturers of America, testified in Wednesday's hearing that legalizing prescription drug importation would open the door to a flood of counterfeit drugs and lead to an increase in patient deaths. Mr. Tauzin also stated that while importation could drive down drug prices, spending on drug research and development would subsequently decrease.
When speaking before the subcommittee, Randall Lutter, acting deputy commissioner for policy at the FDA, questioned the agency's ability to regulate imported prescription drugs and cited a need for more resources to run the estimated $3 billion a year program. He added that he was concerned whether the agency could handle an increase in counterfeit drugs crossing the border, a rising problem he speculates will be inflamed by the legalization of drug imports.
A companion drug importation bill has also been introduced in the House by Representatives Rahm Emanuel (D-IL) and Jo Ann Emerson (R-MO).
Health Care News
Medicare Advantage Cuts Possible; Ways and Means Ranking Member Cautions Colleagues
On Tuesday, Congressman Jim McCrery (R-LA), Ranking Member of the House Ways and Means Committee, circulated a letter to his Republican colleagues stating that cuts to Medicare Advantage providers would reduce access to plans for low-income and minority beneficiaries.
Congressman McCrery states in his letter that 40% of Medicare-eligible African-Americans and 53% of Medicare-eligible Hispanics are enrolled in Medicare Advantage programs and such programs are the leading supplemental coverage choice for beneficiaries with incomes between $10,000 and $20,000 according to 2004 data. The letter goes on to state that these private programs often offer additional benefits over traditional Medicare such as disease management and preventative care services.
The "Dear Colleague" letter follows reports from several Democratic lawmakers that Medicare payment cuts to private health care plans may be considered in order to fund other costly healthcare initiatives. The Administration was criticized for not finding any of its proposed $65 billion in Medicare cuts in its fiscal year (FY) 2008 budget from private Medicare plans, and instead largely targeting provider payments. However, the Congressional Budget Office (CBO) estimates that cuts to Medicare Advantage could save up to $65 billion over five years.
Arguments for such cuts have been recently reenergized by findings from the Medicare Payment Advisory Commission (MedPAC) that payments to Medicare Advantage plans are 112% of what they are in traditional fee-for-service Medicare to provide the same benefits. House Energy and Commerce Health Subcommittee Chairman Frank Pallone Jr. (D-NJ) and House Ways and Means Health Subcommittee Chairman Pete Stark (D-CA) have stated that such inconsistencies should be fixed and the savings used to pay for other healthcare priorities such as Medicare physician payments or increasing SCHIP funding.
GAO Recommends Changes to Reduce Improper DMEPOS Payments
A report released by the Government Accountability Office (GAO) this week finds that improper Medicare payments to suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) are often the result of shortfalls in automated payment systems. Improper payments cost the government approximately $700 million between April 2005 and April 2006.
Among other recommendations, the GAO suggests that the Centers for Medicare and Medicaid Services (CMS) require contractors to develop automated prepayment systems to identify potentially improper claims when supplier billing reaches unusual levels. Additionally, GAO recommends the sharing, and potential adopting, of the most cost-effective controls between contractors.
Senator Grassley (R-IA), Ranking Member of the Finance Committee, requested the investigation from GAO and stated that the report "underscores the need for Medicare program officials to make sure contractors are doing their jobs. By pro-actively identifying suspicious billing, dishonest suppliers can be caught and the fraud stopped before even more money is scammed."
Upcoming Events
Hearings New Orleans Public Health Conditions
Tuesday, March 13, 2007
House Energy and Commerce - Subcommittee on Oversight and Investigations
9:30 a.m., 2123 Rayburn
Impact of Food Stamp Program on Children's Health
House Agriculture - Subcommittee on Operations, Oversight, Nutrition and Forestry
10 a.m., 1302 Longworth
Veteran Suicide Prevention, Insurance Eligibility
House Veterans' Affairs - Subcommittee on Health
1:30 p.m., 334 Cannon
Wednesday, March 14, 2007
Cancer, Trauma Care Bills
Senate Health, Education, Labor and Pensions Committee
10 a.m., 430 Dirksen
Universal Health Coverage
Senate Finance Committee
March 14, 10 a.m., 215 Dirksen
Indian Health Care
House Natural Resources Committee
10 a.m., 1324 Longworth
Health Insurance for Small Business
House Small Business Committee
10 a.m., 2360 Rayburn
Prescription Drug User Fees
Senate Health, Education, Labor and Pensions Committee
10:15 a.m., 430 Dirksen
Genetic Nondiscrimination
House Ways and Means - Subcommittee on Health
2 p.m., B-318 Rayburn
Fiscal 2008 Appropriations: Labor, HHS, Education
Senate Appropriations - Subcommittee on Labor, Health and Human Services, Education, and Related Agencies
2:30 p.m., 124 Dirksen
Thursday, March 15, 2007
Disability Compensation, Insurance and Suicide Prevention
House Veterans' Affairs Committee
10 a.m., 334 Cannon
Insurance Coverage for the Uninsured
House Education and Labor - Subcommittee on Health, Employment, Labor, and Pensions
10:30 a.m., 2175 Rayburn
Traumatic Brain Injury and Poly-trauma Centers
House Veterans' Affairs - Subcommittee on Health
2 p.m., 334 Cannon
For More Information
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