By Lisa Seachrist

Washington Editor

WASHINGTON ¿ With the failure of the Bipartisan Commission on Medicare Reform to reach consensus on its recommendations, efforts to reform the health insurance program for the elderly fall to Congress.

The commission needed 11 votes to create a consensus that would present a proposal to Congress. That effort fell one vote short, as liberals and conservatives battled over how large a role private health plans will play in health care for the elderly.

As a result, the effort will be subject to the whims of a political process that is gearing up for a presidential election in 2000, making it far more difficult for legislators to come to an agreement that will reform the system.

Medicare reform is key to the biotechnology and pharmaceutical industries, because the current system doesn¿t offer coverage for prescription medicines, and efforts to provide such coverage could result in drug-price controls.

¿There are a few issues coalescing here,¿ said Carl Feldbaum, president of the Biotechnology Industry Organization. ¿There is substantial agreement that a drug benefit should be part of the Medicare package ¿ Republicans and Democrats aren¿t going to split on the issue of whether or not seniors deserve access to prescription drugs. The divisiveness is [related to] how you afford seniors those new drugs.¿

The biotechnology and pharmaceutical industries vehemently oppose anything that smacks of drug-price controls, saying these would be a deterrent to the type of innovation that has spawned the biotechnology industry itself.

Bipartisan commission chair Sen. John Breaux (D-La.) created a proposal that would have used federal premium supports to let elderly patients choose from a variety of private health care plans. That type of proposal has garnered support from the Pharmaceutical Research and Manufacturers of America (PhRMA).

¿We think that there is a missed opportunity here,¿ said Jeff Trewhitt, media spokesman for PhRMA. ¿Policy makers missed an opportunity to reform Medicare using a market-based approach. Now, we move into the next phase in Congress.¿

A media spokesperson for Breaux said the senator has submitted the commission¿s recommendations to the legislative counsel, in order to work them into a legislative proposal, and the Senate¿s finance committee intends to conduct hearings on that bill sometime at the end of April. However, that bill may be subject to discord in a Congress suffering from a post-impeachment hangover.

Feldbaum said that, if the Breaux commission had been able to muster the votes needed to make recommendations to Congress, it ¿would have been the first major bipartisan legislation since the impeachment proceedings began. I sense a lot of the partisan rancor in this debate. Some members of Congress are actually itching for this fight.¿

States May Jump In¿ With Price Controls

With such rancor, the possibility dims that Medicare reform will be enacted during this election cycle, Feldbaum said, adding that the Clinton administration doomed the commission¿s work to failure.

¿What I was sorry to see is what appears to be the administration¿s appointees looking back for something that was more business-as-usual,¿ Feldbaum said. ¿They are working as if the structure of Medicare cannot be touched. If we are going to move this debate forward, we need to consider the future.¿

In the meantime, the states will be looking at the void created by the federal government and searching for ways to provide prescription benefits to seniors.

¿The fear is that the states will jump in with price controls,¿ Feldbaum said. ¿It¿s a clear possibility that, if the feds don¿t show leadership on this one, the states will act.¿

The state legislators, in fact, have already begun to act. Trewhitt noted that 14 states have drug assistance programs for the elderly.

¿Unfortunately, we are already seeing states acting and we are seeing them begin to put in place price controls,¿ Trewhitt said. ¿We don¿t have a problem with states expanding coverage for the elderly, [but] we do have a problem with price controls.¿

Trewhitt said each state bill, like each federal bill, will have to be closely examined to ensure that the policies don¿t create disincentives for innovation.

Feldbaum said industry groups ¿want to be sure that the arsenal of drugs and biologics that are beginning to be developed will be available to the baby boomers when they begin to draw on the Medicare system.¿

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