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Letter by AARP CEO Bill Novelli to Congress Concerning Prescription Drug Benefit in Medicare

We applaud the promotion of generic drugs with the inclusion of versions of the "Access to Affordable Pharmaceuticals Act" in both the House and Senate bills. This provision is designed to remove barriers brand-name companies have used to delay entry of lower priced generic drugs into the market. We urge that the conference agreement not weaken further the provisions in the Senate bill.

The final conference report should also include measures to improve appropriate use, and improve quality prescribing. Further, cost containment strategies are needed, including:

  • Develop and Disseminate Comparative Effectiveness Information: Direct the Agency for Health Research and Quality (AHRQ) and the National Institutes of Health (NIH) to sponsor and disseminate studies of comparative clinical effectiveness of drugs widely used by Medicare beneficiaries. Currently, no federal agency regularly sponsors reviews and reports on the comparative effectiveness of prescription drugs. Yet information on which drugs work best for which patients is essential in assuring that patients get the safest and most effective treatment at the lowest possible cost.

  • Strengthen FDA oversight of direct to consumer advertising: Much of the growth in prescription drug spending is attributable to heavily advertised drugs. Marketing that unnecessarily drives demand for higher cost drugs or that does not appropriately address risks should be minimized. Congress should fund greater enforcement of existing FDA regulations, institute penalties for advertisements that contain false or misleading information, and require that the FDA approve all advertisements prior to their release.

Another important cost containment measure that reaches beyond prescription drugs is chronic care management. Since 50 percent of Medicare spending is attributable to just 5 percent of beneficiaries in any given year, better disease management and behavior modification programs are critical to saving money for the program and improving care for Medicare beneficiaries. Therefore, chronic care management techniques should be incorporated in the traditional Medicare program wherever possible.

Provider Givebacks

I also want to reiterate AARP's position on the use of funds from the $400 billion allocation for provider reimbursement increases. Providers should be paid fairly for treating Medicare patients, but beneficiaries have waited long enough for relief from high prescription drug costs. Every dollar allocated to "givebacks" means one less dollar available to improve the drug benefit. Increases in provider reimbursements also substantially increase beneficiary out-of-pocket costs through higher premiums and coinsurance.

We appreciate that objective analyses by MedPAC and others demonstrate legitimate need for some provider payment adjustments. However, we also note that these analyses demonstrate need for decreases in some areas as well. Any reimbursement changes should be based on sound, objective analyses, and result in no net increase that would diminish the amount of funding for a drug benefit or add to total beneficiary cost-sharing obligations.


The conference committee is the next critical step towards the enactment of prescription drug legislation that begins to fulfill the pledge to provide stable and affordable drug coverage to Medicare beneficiaries.

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