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The Committee’s narrative also notes that it is considering the Long-Term Care and Retirement Security Act that would provide tax incentives for the purchase of private long-term care insurance and address private long-term care insurance consumer protections. AARP believes a sustainable financing system for long-term care services and supports will require a combination of sustainable public and private resources. Tax incentives for private long-term care insurance may lower the cost of this insurance for some individuals and encourage them to purchase it, but these incentives would not benefit individuals who cannot afford such insurance or cannot qualify for it due to pre-existing conditions. Updating and strengthening consumer protections for private long-term care insurance is critical. If a CLASS Act approach is enacted, individuals could choose to purchase private long-term care insurance coverage to supplement their CLASS Act benefit and could be helped by the consumer protections and tax incentives.

We also note that this legislation includes a family caregiver tax credit to help family caregivers who are providing assistance to their loved ones. AARP strongly supports efforts to support family caregivers. In 2007, about 34 million family caregivers provided care at any given point in time, and about 52 million provided care at some time during the year. The estimated economic value of their unpaid contributions was approximately $375 billion in 2007, up from an estimated $350 billion in 2006.

Creating a Pathway for Safe and Affordable Generic Biologic Drugs

Spending on biologic drugs is growing nearly twice as quickly as spending on traditionally-developed “small molecule” drugs. Overall biologic drug sales reached $75 billion in 2007 , and it is estimated that spending on biologics will continue to increase substantially though 2012.

Biologics treat serious diseases such as cancer, multiple sclerosis, and rheumatoid arthritis but often cost 10, 15, or even 20 times more than most non-biologic drugs. Users of these often life-saving medications are typically forced to pay exorbitant amounts to treat their conditions.

AARP agrees with the report released just yesterday by the Federal Trade Commission (FTC) that lacks of competition in the biotech market has resulted in higher costs and less innovation. Another major contributor to the increase in spending on biologics is the lack of a statutory pathway at the Food and Drug Administration to approve generic, or bio-equivalent, biologic drugs.

AARP has endorsed the “Promoting Innovation and Access to Life-Saving Medicine Act (S.726/H.R. 1427),” which would create such a pathway as well as a process for timely patent dispute resolution and we applaud Senators Brown, Collins, Schumer, and Vitter for their leadership in sponsoring this critical legislation.

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