Statement of Public Citizen President Joan Claybrook on Drug Company Executives’ “Shell Game” With Medicare Drug Benefit

Jan. 14, 2000

Statement of Public Citizen President Joan Claybrook on Drug Company Executives’ “Shell Game” With Medicare Drug Benefit

The sham retreat by pharmaceutical industry executives from opposing a Medicare drug benefit is nothing more than a shell game.

For 35 years, the drug industry has opposed a Medicare prescription drug benefit because it feared that the government would negotiate lower drug prices for seniors. This is the latest attempt to get ahead of the curve and defeat that effort.

This fight is about drug prices, despite what the industry says. Any Medicare benefit that is not based on tough government negotiations to lower out-of-control prescription drug costs will fail because it’s unaffordable. A benefit created on the drug industry’s terms — private sector negotiations — would cost seniors and taxpayers an arm, a leg and a kidney.

To avoid government negotiations over prices, this rich industry says it is willing to have taxpayer dollars pay private entities to cover Medicare prescription drugs. The model for seriously negotiated prices between the government and the pharmaceutical industry is already at hand: the Federal Supply Schedule, which has worked well for drugs purchased on behalf of veterans and those in the military. The Allen/Johnson bill (H.R. 664/S. 731), with more support than any other measure in Congress (148 co-sponsors), would make those negotiated prices available to those on Medicare. Why aren’t our older citizens entitled to the same benefits as awarded to drug companies’ most favored customers, which include HMOs and certain federal agencies?

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