Back on table: drug imports from Canada

Drug-discount cards, failing to satisfy seniors, send Republicans scrambling for additional Medicare fixes.

When GOP lawmakers passed the first big expansion of Medicare last December - against the advice of many worried about soaring federal deficits - they expected a vote of gratitude from seniors that's yet nowhere in sight.

That's why so many lawmakers are signing on to moves to enhance the new law before November elections. The possible fixes include:

• Backing the legal importation of prescription drugs from nations such as Canada - an issue that in recent months has built into a pitched battle, with some mayors and governors pushing against the resistance of major drug companies and the Food and Drug Administration (FDA).

• Allowing the Medicare program to use its giant buying power as a leverage to negotiate lower drugs prices with pharmaceutical companies.

• Helping seniors better navigate the complexity of a new system of discount cards that has spawned frustration even it promises relief at the pharmacy.

"Seniors are absolutely bewildered by this legislation, and the more they learn about it, the more they dislike it," says Ron Pollack, executive director of Families USA, a senior advocacy group.

This effort by the GOP lawmakers highlights how they are scrambling to reposition themselves on a key domestic issue in an increasingly hard-fought election campaign.

In Missouri on Monday to tout the benefits of the new Medicare modernization law, President Bush blamed "misinformation" for the failure of millions of seniors so far to sign up for new drug discount cards, which were launched this month.

Seniors will save at least 15 percent on brand-name drugs and 30 percent on generic drugs, he said. Low-income seniors are entitled to $1,200 over the next 18 months to help fill prescriptions. The drug discount card is just the first step in a law that will later include screenings for seniors in 2005 and a prescription drug benefit starting in 2006. But the response to Phase 1 has been tepid.

In response, the Bush administration launched a controversial ad campaign which included a "fake" reporter praising the new law. The ad has drawn criticism of politicking with public funds. More recently, House Republicans set up "town meetings" in Democratic districts to tout the law's benefits.

But for many Republicans facing heat from seniors who expected more from Medicare reform, a revved up PR campaign is not enough. Earlier this month, Sen. Judd Gregg (R) of New Hampshire, chairman of the Health, Education, Labor and Pensions committee, announced a bill to legalize drug reimportation, with the support of Senate GOP leadership. A wider-ranging, bipartisan alternative, sponsored by Sens. Byron Dorgan (D) of North Dakota, John McCain (R) of Arizona, and Edward Kennedy (D) of Massachusetts is also pending.

On Monday, three House Republicans backed a surprise Democratic amendment to an Agriculture spending bill that would stop the FDA from enforcing rules that outlaw the importation of drugs from Canada.

Even groups once supporting the new law are now calling for stronger moves to cut drug costs. The AARP, whose support was decisive in passing Medicare reform last year, on Wednesday backed the Dorgan bill, which allows seniors and US pharmacies to import prescription drugs.

The current law allows consumers to purchase less costly medications abroad, but only on condition that the Department of Health and Human Services certifies that the drugs are safe - a move no HHS secretary has been willing to make.

In addition, US customs offices are already awash with illegal prescription drug orders from overseas. "We're seeing 5 million to 10 million of those packages today. With a law making such imports legal, we worry that could jump to 50 million - and where is the agency going to get the resources to deal with it?" says Thomas McGinnis, director of pharmacy affairs for the FDA.

While bills pending in Congress may lower costs for consumers, they will also "significantly reduce" the incentives for large biotech and pharma companies to invest in the next generation of "miracle" drugs, says David McIntosh, a former congressman with Mayer, Brown, Rowe & Maw LL, a law firm that represents drug companies.

Another target for reform in existing law is a provision that explicitly forbids Medicare officials to bargain for lower drug prices - a practice allowed for the Department of Veterans Affairs. That move cuts out one of the most powerful tools for reducing drug costs for seniors, advocates say.

As a result, the lowest prices seniors can get through the new Medicare drug discount cards are "considerably higher" than VA prices, concludes Families USA in a recent study. The prices through the new Medicare cards are often at least 50 percent higher than those paid by veterans.

"It is a national embarrassment that citizens must purchase from other countries to afford prescription drugs. It is no longer a question of whether we should allow the importation of drugs from abroad. Importation is already happening on a large scale. We must ensure that there is a system in place for guaranteeing safety and cost savings," said AARP CEO Bill Novelli Wednesday.

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