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Higgins Fighting to Reduce Prescription Drug Costs for Seniors

Jan 20, 2011
Press Release

Congressman Brian Higgins (NY-27) is asking the Centers for Medicare and Medicaid Services (CMS) to reexamine a policy that prevents working class Medicare Part D recipients from receiving co-pay rebates or coupons often offered by prescription drug companies.  The Congressman made the request to CMS after his office received a phone call from Cheektowaga resident Jerry Wazny who pointed out how unfair it is that some seniors are precluded from participating in the co-pay program which could save seniors hundreds of dollars each year.
“Medicare Part D was created to provide senior consumers with quality prescription drugs at an affordable cost, and we continue to work every day to manage health costs so seniors can live long and healthy lives,” said Congressman Higgins.  “While we strongly support and agree with policies to prevent seniors from being susceptible to unscrupulous business practices, we are concerned that some seniors for whom the risk of fraud is very low are missing out on opportunities to pay less for their prescriptions.”
Drug companies will often provide patients with the opportunity to purchase medicine at a reduced rate through a coupon program or co-pay card.  For example, Pfizer, maker of popular cholesterol lowering drug Lipitor, offers a co-pay card which allows individuals to purchase the prescription for just $4 which could result in a savings of up to $50 each month or $600 for the year.  The strict application of CMS policies restrict middle income seniors from access to manufacturer-sponsored pharmaceutical assistance programs, like the one described above, which would defray their cost of medical care.  
Congressman Higgins argues, with Lipitor and other drugs already long-prescribed by physicians to their patients where no generic alternative currently exists to decrease their out-of-pocket costs, seniors are much less likely to be subject to the unscrupulous practices of drug steering and should be able to participate in the rebate programs.  While other co-pay assistance programs exist for seniors, many middle income seniors are not eligible either due to income requirements of because they are established for particular diseases.
Congressman Higgins has a strong record of advocating for policies that ease the financial burden of Western New York seniors living on a fixed income which includes:

  • Supporting health reform legislation providing nearly 40,000 WNY seniors with a $250 rebate to help with prescription costs, totaling $9,985,750 in savings for WNY seniors in 2010;
  • Approving the Affordable Care Act which saves seniors 50% on brand name drugs, averaging a $700 savings in 2011 and more as the donut hole closes in upcoming years;
  • Cosponsoring a bill to provided a one-time $250 payment to seniors on Social Security to compensate for an automatic formula that calculates no Cost of Living Adjustment; 
  • Pushing for additional HEAP funds which last year provided $51.9 million in heating assistance to residents in Erie County and $9.1 million in Chautauqua County.

Below is a copy of Congressman Higgins’ letter to CMS
January 18, 2011

Dr. Donald Berwick
Centers for Medicare and Medicaid Services
200 Independence Avenue, SW
Washington, D.C. 20201

Re: Application of Federal Anti-Kickback Statute to Manufacturer-Sponsored Pharmaceutical Assistance Plans

Dear Administrator Berwick:

I am concerned that the strict, through well-reasoned, application of the Federal Anti-Kickback Statute to the Medicare Part D program may restrict the opportunity of middle income senior citizens access to manufacturer-sponsored pharmaceutical assistance programs that would otherwise defray their cost of medical care. While the purchasing power of many seniors income continues to stagnate or decline, the cost of living and medical care is rising, necessitating the need for such assistance programs.  There are justifiably sound reasons to protect seniors from unscrupulous business practices, but such policies should be sensitive to particularized situations where the gain provided to seniors in the form of decreased out-of-pocket costs greatly outweighs the risk of abuse. 

It is my understanding that under current federal regulations, pharmaceutical companies are not able to subsidize the cost of prescription drugs for seniors participating in Medicare Part D unless they do so through a state-sponsored or charitable pharmaceutical assistance program.   These regulations were clearly promulgated so as to avoid unlawful inducement and steering of seniors onto particular drugs so as to artificially inflate the revenues of manufacturers.

As you know, many seniors are prescribed specific drugs by their doctors to combat health complications.   These prescriptions often last indefinitely and there may be no feasible alternative to the drug prescribed (at least, until a generic is offered).  These drugs are prescribed to ensure that seniors can lead long and healthy lives when they have demonstrated risks.  While pharmaceutical companies may offer direct co-payment assistance for these drugs, Medicare beneficiaries are not eligible.  In addition, many working class seniors are not eligible for state pharmaceutical assistance programs meant to defray the cost of copayments due to income restrictions.   If no generic alternative exists, and seniors are prescribed on a drug indefinitely, limiting the risk of steering and inducement, I believe there is a strong argument for crafting an exemption to the prohibition against participation in manufacturer pharmaceutical assistance programs to defray the cost of prescription drugs.

Over the long-run, there will surely be other ways to defray the cost of prescription drugs for seniors.  Providing a forum to allow Medicare to negotiate with pharmaceutical companies directly for the price of prescription drugs would be helpful in defraying senior’s out-of-pocket costs.  Further, as intellectual property ownership evolves, generics will enter the market, decreasing the cost of prescriptions.  The rebates provided to seniors to close the Part D donut hole as part of the Affordable Care Act will also go a long way to providing assistance in paying for catastrophic care coverage.  However, until such proposed and pending changes are passed and fully implemented, many working class seniors will remain ineligible for co-pay programs they should be eligible for.

Thank you for your attention to this matter. 



                                                                          BRIAN HIGGINS
                                                                          Member of Congress