Press Briefing on AARPÕs Prescription Drug Affordability Campaign and 2004 Advocacy Agenda

Source: AARP Press Center |  | January 16, 2004

Press Briefing on AARP’s Prescription Drug Affordability Campaign and 2004 Advocacy Agenda

Statement by William D. Novelli, AARP CEO
January 16, 2004

Good morning, and welcome to AARP. With the enactment of the Medicare Prescription Drug, Improvement and Modernization Act of 2003, older Americans and their families won major assistance in the struggle against the high cost of prescription drugs.

We outlined our requirements last summer in a detailed letter to the Congressional leadership, and on balance, we achieved a great deal of what we wanted. But, there is much more to be done. Even though the ink is barely dry from the President's signature on the law, at AARP, we're gearing up to make 2004 a big year for making sure that all Americans have affordable access to the prescription drugs they need. Today, we would like to outline our next steps toward accomplishing that goal.

Containing the soaring cost of prescription drugs and making them more affordable is not just the responsibility of the federal and state governments, or the private sector, or individuals alone…it's everyone's responsibility. All sectors of our society have a role to play, and all must take appropriate steps for prescription drugs to become more affordable.

As part of our 2004 social impact agenda, we are beginning an all-out effort to lower the high cost of prescription drugs with our Prescription Drug Affordability Campaign. This will be an aggressive, fully integrated national campaign, requiring the sustained commitment of people and resources from across AARP, to be carried out in all 50 states (as well as the District of Columbia, Puerto Rico, and the U.S. Virgin Islands), in Congress, and in the courts. We will educate as well as advocate. And, we will provide consumer information and service to our members, further aiding them in their individual efforts to control their own drug costs. Our goal is to make prescription drugs not only be more accessible and affordable for people on Medicare, but for everyone, including the large number of uninsured and under-insured between the ages of 50 and 65.

At the federal level, we will support initiatives designed to lower prices. These include:

• Authorizing the HHS Secretary to negotiate lower drug prices on behalf of Medicare beneficiaries in the event competitive purchasing doesn't work to lower prices. We expect the private purchasers authorized by the bill to achieve discounts, but in the event that experience doesn't bear this out, the Secretary should be able to intervene on behalf of America's seniors.
• Legalizing the importation of drugs from Canada for individuals — with strict controls to ensure that consumers are ordering only from reputable Canadian pharmacies, and ensuring that FDA has adequate resources.
• And today, we are calling on the pharmaceutical manufacturers and distributors to voluntarily limit price increases to no more than the rate of inflation. We will be a watchdog for our members to inform them about drug price increases.

In addition to these measures, there are things we can do outside the current Medicare law that could lower costs through improved market transparency. These include:

• Strengthening comparative effectiveness provisions by increasing funding for research on prescription drug medical outcome and cost-effectiveness between drugs in the same therapeutic classes and making that information available to physicians, providers and consumers;
• Enacting the remaining elements of the original McCain-Schumer bill to promote faster approvals of generics and greater marketplace competition, as recommended by the FTC.
• Requiring disclosure of pricing information by PBMs delivering the Medicare Part D benefit;
• Reforming direct-to-consumer advertising by requiring drug advertisers to provide information about the risks, side effects and proven effectiveness as prominently as information about benefits, adopting a standard warning label, and strengthening FDA oversight; and
• Reforming pharmaceutical detailing to physicians by adopting the AMA ethics guidelines; and establishing conflict of interest guidelines for pharmaceutical sponsorship of medical seminars and conferences.

In conjunction with these efforts, in February, we will kick off a nationwide campaign in all 50 states, Puerto Rico, the District of Columbia and the U.S. Virgin Islands to make drugs affordable. Our strategy will help state governments maintain their drug assistance programs by responsible cost containment while ensuring that people get the drugs they need. As part of this strategy:

• We will work in every state to capitalize on the opportunities provided in the Medicare Prescription Drug law — first to maximize the numbers of people who can be found eligible for the transitional assistance of $600 per year and enroll them in the discount card to receive that assistance; and next to help states wrap around the Medicare benefit and capture state savings to the benefit of the individual — so that low-income beneficiaries — both the " dual-eligible " Medicare/Medicaid beneficiaries and those benefiting from State Pharmacy Assistance Programs are protected.
• We will work to help states pass " Maine Rx+ " laws that extend the state purchasing and bargaining power to negotiate lower drug prices for all state residents with incomes up to 350 percent of the federal poverty line.
• We are working to persuade states to develop and use an evidence-based evaluation of drug effectiveness. This information enables consumers to talk to their physicians and pharmacists about which drugs are best for them and which drugs are most affordable. States can also use the information to purchase the most effective drug, potentially saving money for both the program and the individual.
• We will work with those states that have Medicaid Waivers, to maximize the funding available through the waiver and use it to deliver more affordable drugs to the broadest number of people.

These efforts will not only make prescription drugs more affordable for individuals, it will expand the amount of states' dollars available to close the drug coverage gaps left by Medicare Part D.

In addition to these advocacy and education efforts at the national and state levels, we think it is important to get the Medicare benefit up and running. And, as our Affordability and Education Campaign demonstrates, we're going to be out there educating our members about what's in this new law and helping them understand the enrollment process.

One of the first steps in implementing this law will be the regulatory process. We will be engaged with Congress and CMS in this process to ensure that the regulations carry out the intent of the law, meet beneficiaries' needs and protect their interests.

We will also seek opportunities to improve the Medicare Act. We anticipate that efforts will be made to correct technical errors and provide further clarification. We will be actively engaged in that process. For example, we have already identified three such issues that are important to our members:

1. A provision that would have exempted retiree health plans from age discrimination laws, allowing them to reduce or eliminate benefits for retirees 65 and older was dropped from the final legislation, but the language was not changed in the conference report. Congress needs to correct the report language.
2. The employer coverage provision, particularly as it relates to employee cost sharing, needs to be clarified.
3. Plans should be required to disclose to all Medicare beneficiaries the drugs contained in any formulary or preferred drug plan before they enroll.

Over the longer term, and in accordance with issues we articulated last year, we will look to improve the benefit over time. We will work with Congress in a bipartisan fashion to narrow the funding gap created by the "doughnut hole" and try to eliminate the asset test, which would improve the low-income benefit even more.

We also need to improve a state's ability to coordinate state pharmaceutical programs with the new benefit. We will also work to modify the indexing in the law from drug prices to the CPI-U, to better reflect people's ability to pay.

Our cost-containment strategy also includes plans to offer consumer information, education and services directly to our members. This is a key part of our ongoing mission of social responsibility. AARP has been providing pharmacy benefits to its members for 45 years, and five years ago we introduced our own discount card to help make drugs more affordable, especially for our low-income members.

As part of that ongoing commitment, we have begun working in coalition with several other organizations to ensure that all low-income Medicare beneficiaries know about—and can make optimal use of—all available resources for saving money on prescription drugs. Some of these organizations include:

• National Council on Aging
• American Association of Peoples with Disabilities
• National Alliance for Hispanic Health
• Center for Medicare Advocacy
• Alzheimer's Association
• Catholic Health Association of the US
• National Association of Area Agencies on Aging, and
• National Association of State Units on Aging

We also hope to be able to make available a Medicare card along with our existing pharmacy card, especially as a service to our low-income members, to help them gain access to the $600 benefit. When the regulations come out, we will study them and make a final decision.

These are immediate steps we can take, to help those with low incomes who need help the most, to make their prescription drugs more affordable.

One last element of our cost-containment strategy that I would like to mention involves consumer education. In April 2002, we conducted research that told us that even though people 45+ take lots of prescription drugs—especially those 65 and older—they often don't realize the full benefits of these drugs because they're not taking them as directed. Moreover, many don't use generics despite their comparable efficacy and lower cost. So, we initiated a campaign to educate consumers about how to purchase medications more cost efficiently, and how to use medications wisely.

As part of our comprehensive effort to make drugs more affordable, we are planning to reinvigorate that campaign. We see this not only as a way to improve the nation's health—especially Americans 50+ and Medicare beneficiaries—but also to reduce health-care costs by increasing the appropriate use of generic medications when they are medically appropriate and reducing the incidence of inappropriate drugs being prescribed to people over 50.

As I said at the outset, we are engaging in an all-out effort to lower the high cost of prescription drugs, using advocacy, education, litigation, consumer information and service. We realize that we won't accomplish all of this in 2004, but we're in this for the long haul. Prescription drugs are at the core of modern medicine, and we need to keep working until everyone has access to the medicines they need at prices they can afford.

This is not the only issue on our agenda for 2004. Other issues high on our agenda are:

• Social Security: Social Security's guaranteed, lifetime, inflation-adjusted benefit is the foundation — and most reliable pillar — of a secure retirement. It is currently running a substantial annual surplus, but as the baby boomers become eligible for benefits, these surpluses shrink, and Social Security will experience long-term deficits. Social Security can pay full benefits until 2042, and modest changes implemented in the near future will keep the program financially sound for future generations.
  We are devoting our efforts in 2004 to educating people about Social Security and the need for long-term solvency. We're conducting forums around the country—we've already done eight this month—informing people about the issue, what's at stake, and what the options are. We believe that our nation needs to engage in a thoughtful discussion about the full range of options to strengthen Social Security and ensure that it remains the sturdiest pillar of retirement security for future generations. And, that's what our forums are all about.
  Our position on Social Security has not changed. We continue to oppose reform proposals that would take money out of Social Security and put it into private accounts. We encourage workers to invest for their retirement in addition to Social Security, not with money carved out of Social Security. Taking money from Social Security only weakens the program financially and requires more dramatic changes in benefits and/or revenues to restore the program's long-term solvency.
• We're also going to expand our efforts related to consumer financial protections in 2004. This includes protecting consumers' pensions, fighting against predatory lenders, strengthening protections against identity theft and advocating mutual fund reform.

I'll be glad to take your questions.