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Drugmakers Win Exemption in House Budget-Cutting Bill

By Jonathan Weisman
Washington Post Staff Writer
Wednesday, November 30, 2005; Page A08

As part of a House budget bill that reduces spending on Medicaid prescription drugs, pharmaceutical giant Eli Lilly and Co. and other businesses secured a provision ensuring that their mental health drugs continue to fetch top price at a cost of hundreds of millions of dollars to the states.

The provision -- inserted by Rep. Steve Buyer (R-Ind.), whose district flanks Lilly's Indianapolis headquarters -- would largely exempt antipsychotic and antidepressant medications from a larger measure designed to steer Medicaid patients to the least expensive treatment options. The House Energy and Commerce Committee approved Buyer's amendment this month over the strenuous objections of Chairman Joe Barton (R-Tex.) and the National Governors Association. It survived unchallenged in the $50 billion budget-cutting bill that narrowly passed the House just before Congress left for Thanksgiving recess.

Mental health advocates defend Buyer's provision, saying it is necessary to ensure that vulnerable mental health patients receive proper treatment.

Andrew Sperling, the director of legislative advocacy for the National Alliance on Mental Illness, said his organization has been fighting efforts to restrict access to mental health drugs for years and strongly backed Buyer's amendment. "We believe these [restrictive] policies are destructive and contrary to good clinical policies," he said. "We don't like them."

To opponents, however, Buyer's measure underscores the excessive power that corporate interests wield on Capitol Hill. Critics say the measure also violates the purpose of the budget-cutting bill, which was drafted to give state governments the flexibility to cut program costs in ways that minimize the harm done to beneficiaries.

"This is obviously an attempt to prevent state Medicaid offices from getting cheaper, just-as-beneficial drugs to patients, and it's really going to stick it to the taxpayers," said Steve Ellis, a vice president and Medicaid analyst at Taxpayers for Common Sense.

The Congressional Budget Office has estimated that the provision will raise federal drug spending by $125 million over five years, while state officials say they are likely to face far higher costs.

In a letter to the California congressional delegation, Gov. Arnold Schwarzenegger (R) estimated the provision would raise the state's prescription drug costs by $50 million a year.

"This would definitely limit states' flexibility," Barton protested earlier this month, before nine committee Republicans joined 22 Democrats to override the chairman's wishes. "And again the underlying basis of the bill is to give states more flexibility, not less flexibility."

Under the budget-cutting bill's Medicaid provisions, states would be allowed to create lists of preferred medications. Then, for the first time, they could charge higher co-payments -- even to poor children and pregnant women -- for medicines not on those lists. The bipartisan National Governors Association, which promoted the changes, maintains that states will save billions of dollars by guiding patients away from newer drugs that may be far more expensive -- but no more effective -- than older alternatives.

There is no doubt that we could restrict the return on investment that the drug corporations get and put their research sectors out of business. The question remains do we want to do so? Just so you drug company bashers understand, without profits, the drug companies will go out of business, and the drugs will not be available at any price. The cost to the state will be even higher without private enterprise bearing the burden of research and development.

Full Story: Stop Whining and Take Your Medicine

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