Two Hail Marys and One Novelli

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  • 01/04/2006

A story on the story that appears in the 1/06 AARP Bulletin.

AARP edges away from drug imports

Kelly McCormack and Bob Cusack, The Hill, January 4, 2006

In a move that is already attracting criticism from some lawmakers, AARP last week softened its support of drug reimportation legislation by saying that the new Medicare drug benefit saves senior citizens more than buying pharmaceuticals from Canada.

The powerful consumer group has previously endorsed reimportating drugs, but its revised position could severely damage momentum for legislation pending in Congress.

It could also alleviate political pressure on the White House and the
pharmaceutical industry, which have opposed reimportation even though it is supported by a majority of members of Congress.

The group has enormous clout on Capitol Hill, playing a crucial role in passing the Medicare drug bill in 2003 and thwarting the GOP effort to reform Social Security last year.

AARP’s press release on the matter, released over the holidays, did not get much attention last week. But the ramifications of it could be
significant in the debate on the affordability of prescription drugs.

The new analysis, titled “The New Math” Cheaper than Canada? The drug
benefit may be the better deal,” used the government’s Medicare plan
finder to compare “stand alone” plans that cover all of a senior’s
prescription needs to the cost of acquiring drugs across the border. It concluded that seniors who enroll in a low-cost Medicare
prescription-drug plan would save more in drug costs this year than if
they were to buy the same drugs in Canada.

While Canadian drug prices are still cheaper than prices in the United
States, AARP found that when a senior includes all out-of-pocket costs — premiums, deductibles and payments for medications — the price is lower.

AARP stressed that it continues to support reimportation legislation.

“The bottom line is drug prices are too high,” said AARP spokesman Mark Kitchens. “The two ideas [reimportation and the Medicare drug benefit] are not mutually exclusive. Many Americans that are not on Medicare would benefit from reimportation. Medicare Part D is a tool that would make prescriptions more affordable.”

But AARP CEO Bill Novelli adopted a different tone in the group’s Dec.
29 release, saying, “Jan. 1 is truly a watershed day for many Americans who face the high cost of presciption drugs. Millions of Americans who have never had drug coverage can now save more money through Medicare Part D rather than turning to Canada to get their prescriptions.”

Some congressional Democrats are still upset with Novelli for his role
in AARP’s backing of the GOP drug bill more than two years ago.

The AARP release added, “In conversations with potential enrollees, AARP is hearing that the focus has shifted from the legislation to choosing the best plan to suit their needs.”

These statements triggered strong reactions from both sides of the

“AARP is selling Medicare drug coverage, so it’s not surprising that
they’re pushing their own product,” said Rep. Sherrod Brown (D-Ohio).
“Now they are making an apples-to-oranges comparison between Medicare
drug coverage and Canadian drug prices. Seniors deserve decent drug
coverage, and every American deserves lower-priced drugs. That’s the
bottom line.”

AARP is working with the insurance company UnitedHealth Group to offer
prescription-drug coverage. More than two million seniors have signed up for drug plans offered by the AARP-backed insurer.

Senate Finance Committee Chairman Chuck Grassley (R-Iowa) said that the AARP study “drives home the point that the new Medicare
prescription-drug benefit can help beneficiaries save some serious money on their prescription-drug bills.” But he emphasized that the savings will not be realized by all beneficiaries.

“We need to continue to work on other ways to lower prescription drugs
costs for all Americans,” said Grassley. “We can’t let up on making
prescription drugs more affordable.”

“Saying that Medicare drug plans ‘cost less’ than buying prescription
drugs from other countries is misleading,” said Jon Yarian, a spokesman for Rep. Gil Gutknecht’s (R-Minn.). “The cost of the prescription drugs hasn’t changed. The only difference is who bears the burden of the expense. American taxpayers will be paying for these savings.”

Rep. Jo Ann Emerson (R-Mo.) said, “The fact remains that we still lack a comprehensive policy to address high prescription-drug prices in America when identical, safe and affordable medicines are readily available to Americans just over our borders.”

The pharmaceutical industry was more optimistic about the potential
savings in the Medicare prescription-drug benefit.

“Seniors shouldn’t have to gamble with their lives by importing
potentially dangerous, counterfeit prescription medicines,” said the
Pharmaceutical Research and Manufacturers of America Senior Vice
President Ken Johnson. “Instead they should opt for a safer, more
affordable option offered by Medicare.”


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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