Magazine article Drug Topics

PMA Might Back a Medicare Rx Plan for Outpatients, No Rebates

Magazine article Drug Topics

PMA Might Back a Medicare Rx Plan for Outpatients, No Rebates

Article excerpt

The brand-name drug industry has told the Clinton Administration that it might support a Medicare outpatient drug benefit, but indicated that it would oppose extension of Medicaid-like rebates. Through its trade organization, the Pharmaceutical Manufacturers Association, the industry also registered strong opposition to the concept of global budgeting, which the Administration may make the keystone of its effort to control costs in a revamped health-care system based on managed competition.

In reply to questions Clinton aides raised with the industry between November and January (Drug Topics, Jan. 11), PMA pledged to cooperate to see if an "appropriate" Rx benefit could be set for Medicare outpatients. Some lawmakers have expressed interest in Medicare fix coverage, and the Clinton Administration will have to make a decision on it, too. Among the issues PMA wants addressed, before a plan starts, are "payment methodology... patient cost-sharing, sound prescribing standards, and adequate funding sources that provide incentives encouraging cost-effective outcomes for individual patients."

PMA noted that the Medicaid rebates will total $6.4 billion over the first five years of their institution (1991-95), an amount that comes from about 15% of the drug market. "Any similar approach to cost-containment of drug benefits for the elderly, which comprise an additional 3o%-40% of drug sales," PMA said, "would have devastating implications on the productivity of research-based manufacturers."

The industry asked for more time to prepare its views on several specific ways prices for new and existing Rxs might be contained, as suggested by Clinton's health-care transition team, including a shortened patent life or other penalties for Rxs whose prices rise faster than inflation. But lest anyone think the request for time foretells acceptance, PMA said the industry "opposes government-imposed price or expenditure controls on health care. …

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