Herald News

Drug Makers Gave $1.9M to N.J. Politicians in 4 Years

Herald News / NorthJersey.com — Tuesday, November 4, 2003


Congress is rushing to create a Medicare drug benefit by Christmas, and many seniors struggling to pay for their prescriptions are eager for federal assistance. But the bills being debated this week in Congress are full of hidden price tags, critics say, and could actually hurt New Jersey seniors.

President Bush has hailed a Republican plan to create a voluntary benefit with a $35 monthly premium. "Prescription drug coverage for our seniors is within reach," Bush said last week.

A new prescription benefit would be the largest expansion of Medicare since it began in 1965. It would add at least $400 billion in costs to the government-run program over 10 years. Medicare covers 40 million elderly and disabled Americans.

Senior advocates in New Jersey want a Medicare drug benefit, but they say the current congressional bills, now in negotiations, are inadequate.

Under the House and Senate bills, seniors would pay $420 in annual premiums and then a deductible of $250 or $275. After meeting the deductible, seniors would pay a portion of their prescription costs, perhaps 25 percent of each prescription up to $2,200. That's a likely compromise after the House-Senate negotiations, said Bridget Devane, a health-care activist for New Jersey Citizen Action, a consumer watchdog group.

When seniors reach the $2,200 mark, they would hit a gap in coverage called "the doughnut hole." They would begin paying 100 percent of their prescription costs, up to $3,600. After that, they would pay 5 percent of their drug costs. Under both bills, low-income seniors would receive more help.

"Many people would spend more for the coverage than they would pay out of pocket for their prescriptions now," Devane said.

The actual coverage numbers will not be known until the bill emerges from committee, which could happen this week, she said.

But the biggest problem is that most seniors think they're getting broader coverage than they actually would, advocates said.

"It's very complicated, it's very hard to understand, it's never really been explained to the seniors," said Genevieve Eardley, 79, of Clifton. "They think it's going to be part of Medicare, they're going to take care of your prescriptions. They're not going to take care of it, they're going to throw three crusts of bread to you, that's about it."

Eardley appeared in a videotape on the issue for U.S. Rep. Bill Pascrell Jr., D-Paterson.

More than half of seniors nationally have prescription drug coverage, thanks to company retirement plans or state programs for low-income seniors, such as New Jersey's Pharmaceutical Assistance to the Aged & Disabled, known as the PAAD program, and Senior Gold.

But 24 percent of seniors had no drug coverage in a given year, and an additional 18 percent had coverage for only part of the year, according to a 1998 study by the Commonwealth Fund, a health research foundation based in New York.

"It's a desperate need out there," said Sy Larson, coordinator of the New Jersey prescription drug task force for the AARP. "Senior citizens are spending a great deal out of pocket." One study estimated seniors paid an average of $999 of their own money for prescriptions in 2003.

Some seniors buy medications from Canada, where prices are regulated by the government. The U.S. government has warned it can't guarantee the safety or quality of drugs "re-imported" from other countries, although lawmakers are considering ways to legalize and regulate the practice.

Pascrell, who opposes the Republican plan, said that when seniors find out about the gaps in the Medicare proposal, they'll turn against it. He also worries that if Congress creates a drug benefit, more companies will drop drug benefits for their retirees.

Critics say low-income seniors actually will get fewer benefits in New Jersey under the Medicare plan. The state offers three prescription assistance programs for seniors. The most generous, PAAD, is for seniors with less than $20,437 annual income. They pay only $5 for each prescription and have no deductibles or limits.

"We've been actually doing good for our seniors and people with disabilities," Devane said. "Other states have not done as much as New Jersey."

It's unclear right now if the federal benefit would force New Jersey seniors out of state programs like PAAD, though U.S. Sens. Jon Corzine and Frank R. Lautenberg have sponsored an amendment in the bill to protect those programs.

Joseph Manna, a retired cab driver in Paterson, uses PAAD to help pay for nine prescription medications. Manna, 66, suffers from diabetes, heart disease, gout, high blood pressure, poor circulation and thyroid disease. He also needs syringes to inject his twice-daily insulin.

Manna lives on $797 a month and pays $237 in rent. He said he feels lucky to qualify for PAAD. If he had to pay for all of his pills, he said, "I'd starve to death."

Manna supports a Medicare drug benefit, but only if it protects PAAD. "I hope they're not thinking of getting rid of it," he said. "Then I wouldn't be able to get my prescriptions for five dollars. And a lot of other people depend on it."

Studies show that seniors without drug coverage do not fill as many prescriptions and are more likely to skip doses to make drugs "last longer." Black seniors are especially affected by drug prices, one study said. One out of six black Medicare beneficiaries did not fill a prescription in 2001 because they could not afford it, according to a study funded by the Robert Wood Johnson Foundation in Princeton. The number for white seniors was one in 15.

New Jersey's pharmaceutical companies support a Medicare drug benefit, said Hollie Gilroy, a spokeswoman for the HealthCare Institute of New Jersey, a state pharmaceutical trade association.

Gilroy said a drug benefit would help modernize the Medicare program. She said it's ironic that Medicare pays for expensive hospitalizations, but not medications, which are one of the "best values in health care."

But Gilroy added that the industry opposes importing drugs from abroad because the drugs can be unsafe.

In 2000, the nation's drug tab rose to $121.8 billion, or 9.4 percent of total health outlays, according to the Kaiser Family Foundation. Prices grew much faster than general inflation rates, due in part to newer, higher-priced drugs, direct-to-consumer advertising and doctors prescribing more drugs.

Devane of Citizen Action criticized New Jersey drug companies for blocking political solutions to high prices. While neighboring states have tried to control prices through bulk purchasing alliances and preferred drug lists, New Jersey has done very little, she said.

"It's been a struggle to actually move any type of legislation or have the administration consider any type of negotiation because of the pharmaceutical industry's position in the state," Devane said.

Bush has vowed to sign off on a drug benefit before next year. But the bill includes other bitterly debated Medicare proposals, such as having higher-income seniors pay higher premiums for doctor visits. Lawmakers are debating what role private insurers will have in both the prescription drug plan and in Medicare as a whole. Those issues could take weeks to resolve.

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