PHARMA/POLICY: McLellan leaves offices with partisan and incorrect remarks about Part D

Someone should tell Mark McClellan that he was generally respected by everyone and that now that he doesn’t work for the White House there’s no need to become a Republican shill. But that’s what he’s doing by saying that Medicare drug costs are going down. There are two basic porkies in the statement. The first is that the cost he’s comparing it to is the inflated projection that was come up with well after the MMA was passed–not what Congress was told it was going to be. (I’ve written about how that number changed plenty before, but suffice it to say if you change it up enough and then it comes in lower, that’s not "savings"). If his optimism is correct, we’re back near the original projection, which was still way more than a proper drug benefit should have cost, and was based on more people being covered.

Second, claiming that premiums for seniors in Part D have gone down is not true, as Pete Stark’s office pointed out. Premiums have gone down on average only if you count Medicare HMO/Advantage premiums with those for Part D standalone plans. Medicare Part D standalone premiums have in many cases gone up. Joining a Medicare HMO is a much different thing than adding a Part D standalone plan–just ask anyone who was kicked out of their Medicare HMO in the late 1990s. And of course the HMOs were given a huge subsidy in the MMA legislation separate from the drug coverage part of the legislation, and that’s the money that they are using to reduce their premiums. And we’ve seen this movie before too, including the part when the subsidy is reduced and the private HMOs give up. Just ask anyone who was kicked out of their Medicare HMO in the late 1990s

By the way, you can tell what McClellan is saying here is a lie because Karen Ignagni agrees with him! No need to bother actually researching it, she’s that good a barometer of avoiding the truth! Here’s her quote, if you care:

"There’s no doubt that Medicare is providing valuable benefits for
seniors, and costs are far less than what was expected at the time
legislation passed" creating the new drug benefit, Ignagni says.

Finally, where did Medicare Part D really fall down on the job? It was in failing to enroll low income seniors who would actually have benefited from it. That’s because it was a confusing "market-driven" voluntary program, not a compulsory extension of traditional Medicare. And are low income seniors able to make sensible "market-driven" choices? Apparently not!

NEW YORK, Oct. 13 (UPI) — U.S. seniors with low incomes or no
prescription coverage are less likely to use generic cardiovascular
drugs than more affluent seniors, a study finds. Researchers at
the Mount Sinai School of Medicine in New York say that seniors with
low incomes or no prescription coverage were less likely to use generic
cardiovascular drugs than more affluent seniors and those with
prescription-drug coverage.The study, published in The American
Journal of Managed Care, is the first nationally representative study
that examines the association of income and prescription drug coverage
with generic medication use by Medicare beneficiaries, according to
lead author Dr. Alex D. Federman. Federman and colleagues
examined generic cardiovascular drug use in a nationally representative
sample of elderly Medicare beneficiaries with hypertension. The
findings showed that older patients with cardiovascular diseases often
used costly brand name drugs when equivalent but lower cost generic
versions are available. "The patients that we were concerned
about are low-income and underinsured seniors," said Federman. "Our
findings show this group in-particular are missing opportunities to
save money on prescription drugs without sacrificing quality of care."

But if we had put all seniors into a guaranteed drug benefit program that ensured that they got the best pricing on all drugs (a la VA) and actively managed them so that they were given generics where relevant, then both they and the taxpayer would have been better off. And don’t even start me on the subject of how much the whole benefit would have cost the taxpayer if it had been designed sensibly rather than by PhRMA and AHIP.

I just hope that now he’s out of the Administration McClellan can go back to realizing that there are many shades of gray.

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  1. “By the way, you can tell what McClellan is saying here is a lie because Karen Ignagni agrees with him!”
    I’m laughing so hard that orange juice just squirted out my nose. Some way, some how you need to make it to the next AHIP conference.
    Thanks for making my Tuesday morning!

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