Groups react to comments on Department of Veterans Affairs Prescription Drug Program

Jan 17, 2007--Some groups that represent veterans this week said that most participants in the Department of Veterans Affairs prescription drug program are satisfied, despite criticism of the program from House Republicans during debate over a recently passed bill (HR 4) that would require the HHS secretary to negotiate directly with pharmaceutical companies on prices for medications under the Medicare prescription drug benefit, The Hill reports.

The VA program negotiates directly with pharmaceutical companies on prices for medications. Under the Medicare prescription drug benefit, private health insurers negotiate with pharmaceutical companies for prices on medications.

During debate over the bill, some House Republicans said that the VA program limited access to medications and pharmacies for participants.

Rep. Paul Ryan (R-Wis.), said, "Do we want to have Medicare look like the VA?" He added, "Do we want to replicate that kind of a system for Medicare? I think the answer is no."

Rep. Pete Sessions (R-Texas) said, "We understand that the VA does not serve the best interest of seniors in this country." Dennis Cullinan, director of the National Legislative Service for the Veterans of Foreign Wars, said that the VA program "serves veterans well."

He added, "It's a vital benefit for a lot of veterans. A lot of veterans would not have access to their drugs" without the VA program. Steve Robertson, director of legislative affairs at the American Legion, acknowledged that the "VA's formulary is very, very limited."

However, he said, "Until people start complaining about the formulary, maybe they're pretty pleased with the way the process is set up." Robertson also said that the VA program has an appeals process for participants who seek medications not included on the formulary. The American Legion opposed the House bill over concerns that the legislation would lead to increased medication costs for the VA program (Young, The Hill, 1/17).

§  WWhite House Reiterates Veto Threat
In related news, White House spokesperson Tony Fratto on Tuesday reiterated that President Bush would veto the House bill. "The only way negotiation could be effective is if they also gave government the power to limit drugs," Fratto said, adding, "It would also have the huge additional drawback of limiting choice to seniors."

Fratto said that private health insurers, not the HHS secretary, have the ability to negotiate the lowest prices for medications under the Medicare prescription drug benefit. He added, "The better deal they can get from drug manufacturers, the better chance they have to have a market-competitive drug plan that seniors will want to subscribe to" (Barrios, Long Island Newsday, 1/17).

§  A Additional Coverage
In other Medicare news, the Boston Globe on Wednesday examined factors that contribute to prescription drug prices.

According to Stephen Schondelemeyer, a University of Minnesota researcher who tracks prescription drug prices, brand-name pharmaceutical companies spend about 31% of revenue on sales, marketing and administrative costs; 30% on manufacturing, shipping and distribution costs; 13% on research and development costs; and 6% on taxes and liability protection costs.

Senate Health, Education, Labor and Pensions Committee Chair Edward Kennedy (D-Mass.) said that passage of legislation similar to the House bill in the Senate would require a revision to allow, but not require, the HHS secretary to negotiate directly with pharmaceutical companies on prices for medications under the Medicare prescription drug benefit (Henderson, Boston Globe, 1/17).