Welch calls for simplified, consumer oriented prescription drug program

Senator Peter Welch, candidate for U.S. Congress, is calling for major changes to the Medicare prescription drug benefit passed by Congress that goes into effect next week.

"This program fails on the two components that are most critical to Vermont,s seniors: simplicity and cost effectiveness," said Welch, citing the burdensome number of plans and the prohibition on the federal government's ability to negotiate fair prices.

Welch called for the following three actions by Congress when they return after the New Year:

1. Extending the May 15 enrollment deadline to January 2007;
2. Replacing the provision prohibiting the government from negotiating fair drug price with language explicitly requiring these negotiations; and
3. Revising the program to be consumer oriented by simplifying the program options.

"This legislation is another example of the Republican leadership in Congress catering to the needs of special interest at the expense of the public interest. Rather than develop a consumer oriented prescription drug program, they passed a bill that favors the pharmaceutical industry at the expense of seniors and all taxpayers," said Welch.

Beginning January 1, approximately 98,000 seniors in Vermont will be eligible to participate in this new drug benefit program. They will need to choose from 18 different companies offering a total of 44 benefit plans.

A recent Wall Street Journal/NBC News poll found that more than 7 in 10 seniors (73%) find the benefit "too complicated and confusing." Despite the widespread confusion in Vermont and nationally, seniors will have only until May 1 to enroll in a plan without penalty. Those who join the program after the deadline will face a 1 percent per month penalty on their premiums.

"I am hearing widespread confusion and bewilderment from seniors and their families around the state," added Welch. "We need to extend this deadline to enable Vermonters to better understand this important decision."

In addition to the confusion by the program,s recipients, Welch also points out the unnecessary costs to seniors and taxpayers.

An appalling provision in the legislation actually prohibits the federal government from using the purchasing power of 42 million seniors enrolled in Medicare to negotiate better drug prices.

In order to pass this controversial legislation, the Republican leaders in Washington held this Medicare vote open for nearly three hours - the longest period of time in the history of electronic voting in the House of Representatives. During this time, Congressional Republicans resorted to arm-twisting and financial bribery (Robert Novak, Chicago Sun Times , 11.27.03) in order to pass this special interests handout to the insurance and prescription drug industries.

A November 2005 study prepared by the Committee on Government Reform, Special Investigation Unit, documents the Medicare drug plan's failure to provide meaningful prescription drug price discounts at extra cost to consumers and taxpayers.

The report finds that the drug prices offered by Medicare drug plans are over 80% higher than prices negotiated by the federal government for federal agencies and Department of Veterans Affairs; over 60% higher than prices available to consumers in Canada; over 3% higher than prices available on Drugstore.com; and almost 3% higher than prices available at Costco. (See the cost comparison here [1].

The USA Today reported that the pharmaceutical industry spent $143 million with 1,274 lobbyists in their lobbying effort on this legislation. While protecting the profits of the pharmaceutical industry, the Republican Congress sold out American seniors and taxpayers.

As Senate President Pro Tem, Welch has a strong record of fighting for fair prescription drugs. He oversaw legislation requiring transparency and full disclosure of pricing by pharmaceutical companies, regulating pharmacy benefit managers, and establishing a prescription drug reimportation program for Vermonters to buy safe, cheaper drugs from Canada.

"Congress must revisit this program and begin working on a way to provide a far simpler benefit choice to seniors that delivers on the commitment to lower the costs of prescription drugs for seniors and for taxpayers," added Welch.

In the face of these challenges, Welch commended advocates for Vermont's seniors and disabled who are working tirelessly to help Vermonters navigate the complexities of the program. He urges seniors who need help to call State Health Insurance Assistance Program's Senior HelpLine at 1-800-642-5119.

See the full report by the Committee on Government Reform, Minority Office, here [2].