Pharmaceuticals Medicare Part D Amy Hager John Hance Ife Nelson Haichang Xin.

PharmaceuticalPharmaceuticalss

Medicare Part DMedicare Part D

Amy HagerAmy HagerJohn HanceJohn HanceIfe NelsonIfe Nelson

Haichang XinHaichang Xin

PharmaceuticalsPharmaceuticals

What this Presentation Includes:What this Presentation Includes:

►Overview of PharmaceuticalsOverview of Pharmaceuticals►Existing Legislation Existing Legislation ►Republican ViewsRepublican Views►Democratic (OUR) ViewsDemocratic (OUR) Views►Proposed LegislationProposed Legislation

Pharmacology 101Pharmacology 101

The science of how substances The science of how substances interact with living organisms to interact with living organisms to produce a change in functionproduce a change in function

Pharmaceutical IndustryPharmaceutical IndustryCurrent StructureCurrent Structure

►US Census: 723 pharmaceutical firmsUS Census: 723 pharmaceutical firms > 100 employees: 263> 100 employees: 263 PhRMA members: 34PhRMA members: 34 Fortune 500: 11Fortune 500: 11

►Research-orientated chemical firmsResearch-orientated chemical firms►Biotechnology or biopharmaceutical firmsBiotechnology or biopharmaceutical firms►Generic firmsGeneric firms

Pharmaceutical IndustryPharmaceutical IndustryCurrent StructureCurrent Structure

►Research-orientated chemical firmsResearch-orientated chemical firms►Biotechnology or biopharmaceutical Biotechnology or biopharmaceutical

firmsfirms►Generic firmsGeneric firms

►Acquisitions and MergersAcquisitions and Mergers

Pharmaceutical Industry Pharmaceutical Industry Environmental Forces in the PastEnvironmental Forces in the Past

►Scientific discovery/technological changeScientific discovery/technological change Targeted drug designTargeted drug design BiotechnologyBiotechnology

►Economic trendsEconomic trends Health care inflationHealth care inflation

►Socio-political developmentsSocio-political developments Restructuring of health care deliveryRestructuring of health care delivery

Demands on Pharmaceutical Demands on Pharmaceutical IndustryIndustry

►Multiple constituenciesMultiple constituencies►Patient-customersPatient-customers►Health care provider-customersHealth care provider-customers►Payer-customersPayer-customers►InvestorsInvestors►ResearchersResearchers►RegulatorsRegulators

►Conflicting aimsConflicting aims

Pharmaceutical Industry Pharmaceutical Industry Enduring CharacteristicsEnduring Characteristics

► Intellectual Property ProtectionIntellectual Property Protection►Research & Development (R&D)Research & Development (R&D)►ProfitabilityProfitability


► Intellectual Property Protection (IPP)Intellectual Property Protection (IPP) Role of patentsRole of patents Market exclusivityMarket exclusivity Legislative initiatives in response to Legislative initiatives in response to

market failuresmarket failures

LawLaw DescriptionDescription DurationDuration

19831983Orphan Drug ActOrphan Drug Act

Exclusivity granted to drugs for indications with less than Exclusivity granted to drugs for indications with less than 200,000 U.S. patients. Protection from generic and other 200,000 U.S. patients. Protection from generic and other branded versions of the same drug for the same branded versions of the same drug for the same indication.indication.

7 years from date of 7 years from date of approvalapproval

19841984Hatch-Waxman Act Hatch-Waxman Act

Exclusivity granted to new chemical entities to Exclusivity granted to new chemical entities to compensate for delays in regulatory approval process. compensate for delays in regulatory approval process.

Up to 5 years from Up to 5 years from date of approvaldate of approval

Exclusivity granted to modified versions of existing drugs Exclusivity granted to modified versions of existing drugs with new clinical data, e.g., new dosage form or new with new clinical data, e.g., new dosage form or new clinical indication. clinical indication.

3 years from date of 3 years from date of approvalapproval

Automatic stay of approval of generic granted when Automatic stay of approval of generic granted when holder sues for patent infringementholder sues for patent infringement

Up to 30 months, or Up to 30 months, or litigation concludedlitigation concluded

Exclusivity granted to first generic applicant prior to Exclusivity granted to first generic applicant prior to expiration patents for brand drug. Protection from expiration patents for brand drug. Protection from approval of other generic versions during term of approval of other generic versions during term of exclusivity.exclusivity.

Up to 180 days or Up to 180 days or until court declares until court declares patent invalid or not patent invalid or not infringedinfringed

19921992Prescription Drug User Fee Prescription Drug User Fee ActAct

Faster FDA review processes funded by establishment Faster FDA review processes funded by establishment fees, new drug application fees and product fees paid by fees, new drug application fees and product fees paid by manufacturersmanufacturers

FDA review reduced FDA review reduced 2.1 yrs2.1 yrs

19941994Uruguay Round Agreements Uruguay Round Agreements Act Act

Set patent life to international standard for patents Set patent life to international standard for patents covering composition of matter, method of use, covering composition of matter, method of use, formulation, product by processformulation, product by process

20 years from date of 20 years from date of filingfiling

1997 FDA Modernization Act1997 FDA Modernization Act Codified accelerated approval regulations and policies & Codified accelerated approval regulations and policies & procedures for fast-track approvalprocedures for fast-track approval

FDA review reduced FDA review reduced 2.1 yrs2.1 yrs

Granted in exchange for pediatric clinical trials requested Granted in exchange for pediatric clinical trials requested by the FDA.by the FDA.

6 months added to life 6 months added to life of patent or of patent or exclusivityexclusivity


►Research & Development (R&D)Research & Development (R&D) Product life cyclesProduct life cycles Blockbuster productsBlockbuster products Marketing in place of innovationMarketing in place of innovation


►ProfitabilityProfitability Net profit as a percentage of revenueNet profit as a percentage of revenue Mean return on investmentMean return on investment ““Virtuous rent seeking models”Virtuous rent seeking models”


►ProfitabilityProfitability Net profit as a percentage of revenueNet profit as a percentage of revenue Mean return on investmentMean return on investment ““Virtuous rent seeking models”Virtuous rent seeking models”

►Price sensitivityPrice sensitivity Health care is a rightHealth care is a right Prices not based on cost of productionPrices not based on cost of production Pricing: art vs. sciencePricing: art vs. science

The Role of the FDAThe Role of the FDA

► Due to stringent regulations imposed by the Due to stringent regulations imposed by the FDA: Drug approval on average takes 12 to FDA: Drug approval on average takes 12 to 15 years15 years

► Implications: Implications: Safer Drugs, but Inefficient and Safer Drugs, but Inefficient and

Lengthy Lengthy ProcessProcess

Healthy CompetitionHealthy CompetitionBy: Michael Tanner and Michael CannonBy: Michael Tanner and Michael Cannon

Tipping Points?Tipping Points?

►Escalating CriticismEscalating Criticism

►Pressure pointsPressure points Economic: pricing and price differentialsEconomic: pricing and price differentials Science/technology: R&D investmentScience/technology: R&D investment Socio-political: market prospectsSocio-political: market prospects

Pharmaceutical Industry: Pharmaceutical Industry: Present AgendaPresent Agenda

►Repair social imageRepair social image

► Juggle traditional and biotech Juggle traditional and biotech medicinesmedicines

►Evolve as global organizationsEvolve as global organizations

PharmaceuticalsPharmaceuticals►Due to the rising costs of Due to the rising costs of

pharmaceuticals— Congress enacted pharmaceuticals— Congress enacted Part D in January 2006Part D in January 2006

►Therefore, this presentation will focus Therefore, this presentation will focus on Part Don Part D


►A federal program that subsidizes the A federal program that subsidizes the cost of prescription drugs for Medicare cost of prescription drugs for Medicare beneficiariesbeneficiaries

►Enacted as part of MMA (2003)Enacted as part of MMA (2003)►Plan D started January 2006Plan D started January 2006

HOW Part D WorksHOW Part D Works

►Plan D is administered by Private Plan D is administered by Private Insurance companies that are Insurance companies that are reimbursed by CMS (Centers of reimbursed by CMS (Centers of Medicare and Medicaid Services)Medicare and Medicaid Services)

►Medicare beneficiaries have to Medicare beneficiaries have to affirmatively choose and enroll in Part affirmatively choose and enroll in Part DD

HOW Part D WorksHOW Part D Works

► As a beneficiary of Medicare Part D you have As a beneficiary of Medicare Part D you have the option to enroll or not enrollthe option to enroll or not enroll

► Once you enroll, you select a plan that meets Once you enroll, you select a plan that meets your needs and then pay a monthly premiumyour needs and then pay a monthly premium

► The premium is paid to CMS- which in turn The premium is paid to CMS- which in turn pays the private insurance companiespays the private insurance companies

► The premium can be deducted from your The premium can be deducted from your social security allowancesocial security allowance

► The premium varies by planThe premium varies by plan

Existing and Current Existing and Current Legislation in Legislation in

CongressCongress

Universal Health Act of Universal Health Act of 20072007

HR1521: Repeal of the Late HR1521: Repeal of the Late Enrollment Penalty in Enrollment Penalty in


Bill SponsorsBill Sponsors

► Mr. Kagen (D-WI)Mr. Kagen (D-WI)► Mr. Altmire (D-PA)Mr. Altmire (D-PA)► Mr. Larson (D-CT)Mr. Larson (D-CT)► Mr. Braley (D-IA)Mr. Braley (D-IA)► Mr. Perlmutter (D-CO)Mr. Perlmutter (D-CO)► Ms. Castor (D-FL)Ms. Castor (D-FL)► Mr. Gene Green (D-Mr. Gene Green (D-

TX)TX)► Mr. Farr (D-CA)Mr. Farr (D-CA)

► Mr. Cleaver (D-MO)Mr. Cleaver (D-MO)► Mr. Higgins (D-NY)Mr. Higgins (D-NY)► Mr. McNulty (D-NY)Mr. McNulty (D-NY)► Ms. Hirono (D-HI)Ms. Hirono (D-HI)► Mr. Cohen (D-TN)Mr. Cohen (D-TN)► Mr. Patrick J. Mr. Patrick J.

Murphy (D-PA)Murphy (D-PA)► Mr. Wexler (D-FL)Mr. Wexler (D-FL)

What does this bill intend to What does this bill intend to do?do?

► To amend part D of title XVIII of the Social To amend part D of title XVIII of the Social Security Act to REMOVE the Medicare Security Act to REMOVE the Medicare prescription drug benefit late enrollment prescription drug benefit late enrollment penalty. penalty.

► FULL PREMIUM SUBSIDY- An income-related FULL PREMIUM SUBSIDY- An income-related premium subsidy equal to up to 100% of the premium subsidy equal to up to 100% of the amount described by Medicare Part D amount described by Medicare Part D

► The amendments made by this Act shall be The amendments made by this Act shall be effective immediately and shall apply to effective immediately and shall apply to monthly beneficiary premiums for months monthly beneficiary premiums for months beginning after such datebeginning after such date

REMEDY Act of REMEDY Act of 20072007

HR1310: Relief and HR1310: Relief and Elimination of the Medicare Elimination of the Medicare

Enrollment Deadline Penalty Enrollment Deadline Penalty

SponsorsSponsors

►Mr. ALTMIRE (D-PA)Mr. ALTMIRE (D-PA)

What would the Remedy Act What would the Remedy Act do?do?

►Amend part D of title XVIII of the Social Amend part D of title XVIII of the Social Security Act to waive the late Security Act to waive the late enrollment penalty under such part for enrollment penalty under such part for 2006 and 2007 and to fully subsidize 2006 and 2007 and to fully subsidize any such penalties subsequently any such penalties subsequently imposed for part D subsidy-eligible imposed for part D subsidy-eligible individualsindividuals

What about those individuals What about those individuals who already paid penalties in who already paid penalties in

2006?2006?► REBATES OF CERTAIN PENALTIES PREVIOUSLY COLLECTED: REBATES OF CERTAIN PENALTIES PREVIOUSLY COLLECTED:

The Secretary of Health and Human Services shall establish The Secretary of Health and Human Services shall establish a method for providing rebates of late enrollment penalties a method for providing rebates of late enrollment penalties paidpaid

► This would include payments received for months BEFORE This would include payments received for months BEFORE the date of the enactment of this Act for which a penalty the date of the enactment of this Act for which a penalty does not apply under the amendment made by subsection does not apply under the amendment made by subsection (a) but for which a penalty was previously collected (a) but for which a penalty was previously collected (RETROACTIVE)(RETROACTIVE)

► The amount of any rebate returned for past late enrollment The amount of any rebate returned for past late enrollment fees shall NOT be treated as income for purposes of fees shall NOT be treated as income for purposes of determining the eligibility for or the amount of assistance determining the eligibility for or the amount of assistance for the Medicare Part D programfor the Medicare Part D program

► It also cannot determine the eligibility for, or the amount of It also cannot determine the eligibility for, or the amount of assistance under any other Federal or federally assisted assistance under any other Federal or federally assisted program that bases eligibility, or the amount of benefits, on program that bases eligibility, or the amount of benefits, on need. need.

Medicare Prescription Medicare Prescription Drug Benefits Gap Drug Benefits Gap Elimination Act of Elimination Act of

2007 (Introduced in 2007 (Introduced in House)House)

H.R.1277H.R.1277

SponsorsSponsors

► G.K. Butterfield (D-NC)G.K. Butterfield (D-NC)► Albert Russell Wynn (D-MD)Albert Russell Wynn (D-MD)► Anthony D. Weiner (D-NY)Anthony D. Weiner (D-NY)► Gregory Meeks (D-NY)Gregory Meeks (D-NY)► Walter B. Jones (R-NC)Walter B. Jones (R-NC)► Robert Brady (D-PA)Robert Brady (D-PA)► Donna M. Christensen (D-VI)Donna M. Christensen (D-VI)► Al Green (D-TX)Al Green (D-TX)► Brad Miller (D-NC)Brad Miller (D-NC)

Bill supported actionsBill supported actions► To direct the Secretary of Health and Human Services To direct the Secretary of Health and Human Services

to investigate how to eliminate the gap in benefits to investigate how to eliminate the gap in benefits between standard coverage and catastrophic coverage between standard coverage and catastrophic coverage under the Medicare prescription drug program under the Medicare prescription drug program

► The Secretary shall conduct a study to investigate The Secretary shall conduct a study to investigate HOW to eliminate the gap in benefits for covered part HOW to eliminate the gap in benefits for covered part D drugs under the Medicare prescription drug program D drugs under the Medicare prescription drug program after a part D eligible individual's costs exceed the after a part D eligible individual's costs exceed the initial coverage limit, and before the individual obtains initial coverage limit, and before the individual obtains protection against high out-of-pocket expendituresprotection against high out-of-pocket expenditures

► Not later than 6 months after the date of enactment of Not later than 6 months after the date of enactment of this Act, the Secretary shall submit a report to this Act, the Secretary shall submit a report to Congress on the findings from the study conducted Congress on the findings from the study conducted and shall include recommendations for legislation and shall include recommendations for legislation based on those findings.based on those findings.

To amend part D of title XVIII of the To amend part D of title XVIII of the Social Security Act to authorize the Social Security Act to authorize the

Secretary of Health and Human Secretary of Health and Human Services to negotiate prices for part Services to negotiate prices for part

D covered drugs for Medicare D covered drugs for Medicare

beneficiaries.beneficiaries.

H.R.118H.R.118

SponsorsSponsors

► Jo Ann Davis (R-VA)Jo Ann Davis (R-VA)

What does the bill propose?What does the bill propose?

►The Secretary would be authorized to The Secretary would be authorized to negotiate with drug manufacturers negotiate with drug manufacturers and pharmacies prices charged to PDP and pharmacies prices charged to PDP sponsors and MA organizations for sponsors and MA organizations for covered part D drugs provided under covered part D drugs provided under this title. this title.

Is this bill truly Republican?Is this bill truly Republican?

► It is interesting that a republican It is interesting that a republican representative would propose legislation representative would propose legislation for government control given Republican for government control given Republican ideals of small government and market ideals of small government and market competition…competition…

► However, this bill seemingly maintains its However, this bill seemingly maintains its Republican nature by allowing government Republican nature by allowing government to negotiate for PDPs and MAs, thus to negotiate for PDPs and MAs, thus maintaining the competitive entitiesmaintaining the competitive entities

► The republicans have DISGUISED to the The republicans have DISGUISED to the public their true intentions by attempting public their true intentions by attempting to look like us!?to look like us!?

Republican views on Part DRepublican views on Part D► The theory behind Part D is that market forces and The theory behind Part D is that market forces and

competition among drug plans, overseen by government, competition among drug plans, overseen by government, can achieve better results than a government-run programcan achieve better results than a government-run program

► The multitude of plans allows seniors to pick one that best The multitude of plans allows seniors to pick one that best meets their needs, companies that do not meet the needs meets their needs, companies that do not meet the needs of a significant portion of the population will be forced out of a significant portion of the population will be forced out due to inefficiency, and those that do meet needs will due to inefficiency, and those that do meet needs will remain competitive and beneficialremain competitive and beneficial

► The laws of supply and demand will dictate a fair and low The laws of supply and demand will dictate a fair and low price for prescription drugsprice for prescription drugs

► Both the non-partisan Congressional Budget Office and Both the non-partisan Congressional Budget Office and Medicare actuaries have said they doubt the government Medicare actuaries have said they doubt the government could negotiate lower costs than the private sectorcould negotiate lower costs than the private sector

► The public would be best served if the new Congress The public would be best served if the new Congress conducts in-depth oversight to gather the facts, rather than conducts in-depth oversight to gather the facts, rather than rushing through legislation to fix something that isn't rushing through legislation to fix something that isn't necessarily brokennecessarily broken

Republican goals for Part DRepublican goals for Part D

►Maintain market forcesMaintain market forces►Create tax breaks and incentives for Create tax breaks and incentives for

enrollment in the programenrollment in the program►Maintain enrollment penalties to Maintain enrollment penalties to

prevent adverse selectionprevent adverse selection►Maintain the status quo, Part D is Maintain the status quo, Part D is

functional and coherentfunctional and coherent If it’s not broke, don’t fix it!If it’s not broke, don’t fix it!

Democratic goals for Part DDemocratic goals for Part D

► Expanded public programs aimed at covering more Expanded public programs aimed at covering more low-income individuals, particularly childrenlow-income individuals, particularly children

► Defeat of additional tax breaks for health savings Defeat of additional tax breaks for health savings accounts, which we see as tax breaks for the accounts, which we see as tax breaks for the wealthy. wealthy.

► Elimination of the "doughnut hole" in Medicare Part Elimination of the "doughnut hole" in Medicare Part D which leaves beneficiaries at risk of not being D which leaves beneficiaries at risk of not being able to meet financial needs and as a result able to meet financial needs and as a result potentially not being able to buy needed drugspotentially not being able to buy needed drugs

► Authorizing the government to negotiate lower drug Authorizing the government to negotiate lower drug prices for Medicare beneficiaries. prices for Medicare beneficiaries.

► "If you've got 43 million Medicare beneficiaries, "If you've got 43 million Medicare beneficiaries, they should get some kind of reasonable discount" they should get some kind of reasonable discount"

Not explicitly stated, but Not explicitly stated, but important Democratic Goals for important Democratic Goals for

Part DPart D► Remove the PDP insurers from the Remove the PDP insurers from the

equation and negotiate directly with the equation and negotiate directly with the pharmaceutical industry to lower pricespharmaceutical industry to lower prices

► Improve Medicare funding sources to Improve Medicare funding sources to supply the elderly with needed caresupply the elderly with needed care

► Allow the global market to drive down Allow the global market to drive down American prescription drugs prices American prescription drugs prices (importation of prescription drugs?)(importation of prescription drugs?)

► Kill Republican ideas before they kill Kill Republican ideas before they kill America!America!

Proposed Proposed LegislationLegislation

Medicare Part EMedicare Part E


►Medicare Part D was drafted by a Medicare Part D was drafted by a Republican Congress— it takes a Republican Congress— it takes a superior party (i.e. Democrats) to fix superior party (i.e. Democrats) to fix this faulty piece of legislation!this faulty piece of legislation!

Criticisms of Part DCriticisms of Part D

1)1) Donut HoleDonut Hole

2)2) Enrollment WindowEnrollment Window

3)3) Federal government is NOT permitted Federal government is NOT permitted to negotiate for more favorable rates to negotiate for more favorable rates on prescription drugson prescription drugs

*** Our Proposed Legislation addresses *** Our Proposed Legislation addresses these 3 Criticisms***these 3 Criticisms***

Proposed LegislationProposed Legislation

►Medicare Part EMedicare Part EDOWN with D and Up with E DOWN with D and Up with E

Part E Includes:Part E Includes: More Donut: Less HoleMore Donut: Less Hole Ability to enroll at any timeAbility to enroll at any time YES Government can Negotiate for YES Government can Negotiate for

your drugsyour drugs NO reason to go to Canada for your NO reason to go to Canada for your

drugsdrugs

Criticisms of Part DCriticisms of Part D

► Donut HoleDonut Hole

The donut hole refers to the coverage gap The donut hole refers to the coverage gap within Part Dwithin Part D

Beneficiaries pay 25% of their prescription Beneficiaries pay 25% of their prescription drug costs. However, once they meet a drug costs. However, once they meet a deductible of $2,400— they are required to deductible of $2,400— they are required to pay 100% of the prescription until pay 100% of the prescription until catastrophic coverage ($3,850) has been catastrophic coverage ($3,850) has been reachedreached

Eliminating the Donut HoleEliminating the Donut Hole

►The solution to the Donut Hole is to The solution to the Donut Hole is to extend the initial coverage limit from extend the initial coverage limit from $2,400 to $3,500$2,400 to $3,500

OROR►Those who need more than $2,400 in Those who need more than $2,400 in

prescription drugs can have an prescription drugs can have an extended coverage limit and as a extended coverage limit and as a result will pay higher premiumsresult will pay higher premiums

Enrollment WindowEnrollment Window

► Beneficiaries of Part D have a 6 month Beneficiaries of Part D have a 6 month window to enroll. If you enroll after the 6 window to enroll. If you enroll after the 6 month period- you are penalized with a 1% month period- you are penalized with a 1% increase in the premium price per month or increase in the premium price per month or you can wait and enroll in the next Annual you can wait and enroll in the next Annual Enrollment Period.Enrollment Period.

► Additionally, once you choose a plan, you Additionally, once you choose a plan, you are locked in until the next enrollment are locked in until the next enrollment periodperiod

Solving the Problem of the Solving the Problem of the Enrollment WindowEnrollment Window

►Make Medicare Part D more flexible Make Medicare Part D more flexible and eliminate the 1% increase in and eliminate the 1% increase in premium costs for late enrollment!premium costs for late enrollment!

►As Simple as That— Yes!!!As Simple as That— Yes!!!

Solving the Problem of Solving the Problem of NegotiationNegotiation

►Private Sector Negotiates with Private Sector Negotiates with PharmaceuticalsPharmaceuticals

►Government cannot negotiate even Government cannot negotiate even though it is the buyerthough it is the buyer

►SOLUTION: Allow government to SOLUTION: Allow government to negotiate with Pharmaceuticals!!!negotiate with Pharmaceuticals!!!


►Allow government to negotiate with Allow government to negotiate with Pharmaceuticals!!!Pharmaceuticals!!!

►However, it is argued by the CBO However, it is argued by the CBO (Congressional Budget Office) that (Congressional Budget Office) that even with government negotiations— even with government negotiations— this does not mean that drug prices this does not mean that drug prices will become substantially lowerwill become substantially lower

►CBO says Public Negotiation is NO CBO says Public Negotiation is NO better than Private Negotiationbetter than Private Negotiation


►Public Negotiation or Private Public Negotiation or Private Negotiation— is one better than the Negotiation— is one better than the other?other?

►Doesn’t hurt to try??? We have Doesn’t hurt to try??? We have nothing to lose- except more out-of-nothing to lose- except more out-of-pocket expenditures on pocket expenditures on pharmaceuticalspharmaceuticals

Rationale for Part ERationale for Part E

►Since drug costs continue to rise, the Since drug costs continue to rise, the Federal Government should shoulder Federal Government should shoulder the responsibility by engaging in the responsibility by engaging in reforms that decrease drugs cost for its reforms that decrease drugs cost for its enrolleesenrollees

►Fixing the current glitches within Part DFixing the current glitches within Part D►50-60% of all beneficiaries enrolled in 50-60% of all beneficiaries enrolled in

Part D will reach the donut holePart D will reach the donut hole

Mechanisms for Part EMechanisms for Part E

►Allowing government to negotiateAllowing government to negotiate

Government NegotiationsGovernment Negotiations

CMSPrivate

InsuranceCompanies

PharmaceuticalIndustry

Part D Enrollees

Public (Tax $’s)


CMS PharmaceuticalIndustry

StateGovt

Public and Part D Enrollees

PrivateInsurance

Companies


►NOT eliminating Private Insurance NOT eliminating Private Insurance Companies— they will no longer be the Companies— they will no longer be the intermediary between government intermediary between government and pharmaceuticalsand pharmaceuticals

Target Group for Part ETarget Group for Part E► All Medicare Part D BeneficiariesAll Medicare Part D Beneficiaries

ANDAND

The Uninsured— especially: The Uninsured— especially:

1. Working families: in 2004, 80% of the uninsured came 1. Working families: in 2004, 80% of the uninsured came from from working families—almost 70% from families with one or more working families—almost 70% from families with one or more full-time full-time workers and 13% from families with part-time workers and 13% from families with part-time workers workers

2. Low-income individuals: 2/3 of the uninsured are from low-2. Low-income individuals: 2/3 of the uninsured are from low-income income families. Because of the high cost of health insurance, the families. Because of the high cost of health insurance, the poor and poor and near-poor have the greatest risk of being uninsured. near-poor have the greatest risk of being uninsured.

--- the Kaiser Family --- the Kaiser Family

Foundation Foundation

Financing Part EFinancing Part E

►How do we afford an increase in the How do we afford an increase in the donut hole threshold from $2,400 to donut hole threshold from $2,400 to $3,500? $3,500?

► Increase Taxes Increase Taxes ►Take away from National Defense and Take away from National Defense and

allocate toward Health Care allocate toward Health Care


►CMS may bypass insurance plans and CMS may bypass insurance plans and directly negotiate with pharmaceutical directly negotiate with pharmaceutical industries for greater discount on industries for greater discount on prescription drugs with their monopoly prescription drugs with their monopoly market powermarket power


► CMS may bypass insurance plans and directly CMS may bypass insurance plans and directly negotiate with pharmaceutical industriesnegotiate with pharmaceutical industries

Advantages: Advantages: ► Reduce intermediary procedure and cost for Reduce intermediary procedure and cost for

insurance companies;insurance companies;► Encourage competition among pharmaceutical Encourage competition among pharmaceutical

companies lowering drug costscompanies lowering drug costsDisadvantages: Disadvantages: ► Deal directly with large amount of beneficiaries, Deal directly with large amount of beneficiaries,

administrative costs will increase, so the challenge administrative costs will increase, so the challenge may be better performed by the state governments. may be better performed by the state governments. CMS only deals with administration of each state CMS only deals with administration of each state division.division.

OutcomesOutcomes

►Pharmaceutical companies compete for Pharmaceutical companies compete for the largest public payer, which results the largest public payer, which results in the lower drug costs for enrolleesin the lower drug costs for enrollees

►Reduction of intermediary insurance Reduction of intermediary insurance companies, reducing CMS’s companies, reducing CMS’s expendituresexpenditures

►CMS supervises, coordinates and CMS supervises, coordinates and evaluates the proposed legislationevaluates the proposed legislation

VOTE For Part EVOTE For Part E

►Medicare Part EMedicare Part E

DOWN with D and Up with EDOWN with D and Up with E

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Wednesday, January 10, 2007Wednesday, January 10, 2007

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http://www.pharmacists.ca/content/media/newsroom/http://www.pharmacists.ca/content/media/newsroom/news_releases/release_detail.cfm?release_id=150news_releases/release_detail.cfm?release_id=150

U.S. Congress threatens Canada's prescription drug supplyU.S. Congress threatens Canada's prescription drug supply

Louise Crandall, Canadian Pharmacists Association, (613) Louise Crandall, Canadian Pharmacists Association, (613) 523-7877; Mary Ann Cedrone, Ontario Pharmacists' 523-7877; Mary Ann Cedrone, Ontario Pharmacists' Association, (416) 441-0788; Paulette Eddy, Best Association, (416) 441-0788; Paulette Eddy, Best Medicines Coalition, (416) 622-3893Medicines Coalition, (416) 622-3893

H.R. 4: A Confusing and Contradictory Prescription for H.R. 4: A Confusing and Contradictory Prescription for Medicare DrugsMedicare Drugs

by Greg D'Angelo and Robert E. Moffit, Ph.D.by Greg D'Angelo and Robert E. Moffit, Ph.D.

ReferenceReference

H.R. 4: A Confusing and Contradictory Prescription for H.R. 4: A Confusing and Contradictory Prescription for Medicare DrugsMedicare Drugs

by Greg D'Angelo and Robert E. Moffit, Ph.D.by Greg D'Angelo and Robert E. Moffit, Ph.D.

New Drug Legislation: A Response From The New Drug Legislation: A Response From The Pharmaceutical IndustryPharmaceutical Industry

by Paul E. Freimanby Paul E. Freiman►Government Documents Government Documents oThe Pharmaceutical Market Access and Drug Safety Act - The Pharmaceutical Market Access and Drug Safety Act - Full Text of the Bill Full Text of the Bill oJanuary 10, 2007. Sen. Dorgan's press release. Reducing January 10, 2007. Sen. Dorgan's press release. Reducing the Cost of Prescription Drugs. the Cost of Prescription Drugs. oJanuary 10, 2007. Rep. Emanuel's press release. January 10, 2007. Rep. Emanuel's press release. Significant Bipartisan Drug Importation Legislation Significant Bipartisan Drug Importation Legislation Introduced in the Senate. Introduced in the Senate.

http://www.cptech.org/ip/fsd/health-pi-us.htmlhttp://www.cptech.org/ip/fsd/health-pi-us.htmlParallel Imports of Pharmaceuticals Into the U.S. Parallel Imports of Pharmaceuticals Into the U.S.

("Reimportation") ("Reimportation")

ReferenceReference

CPTech Documents

April 23, 2004. Bipartisan drug import bill fixes exhaustion and contract barriers, runs afoul of FTAs and Hague Convention.

April 14, 2004, Policy Issues Concerning Parallel Trade of Pharmaceutical Drugs in the United States, FDA Prescription Drug Importation Meeting.

March 31, 2004 Legal and Policy Issues Concerning Parallel Trade (aka Re-Importation) Of Pharmaceutical Drugs in the United States

March 30, 2004, CPTech statement to Members of Study Group on Enforcement of Judgments, Secretary of State Advisory Committee on Private International Law, regarding First Sale Doctrine (parallel trade, exhaustion of intellectual property rights).

March 3, 2004, Comments on Maryland State Senate Bill 167.

•Page on various legislation from previous Congresses on this topic.

Questions???Questions???

Pharmaceuticals Medicare Part D Amy Hager John Hance Ife Nelson Haichang Xin.

Documents

Transcript of Pharmaceuticals Medicare Part D Amy Hager John Hance Ife Nelson Haichang Xin.