Continued GOP control of the government also will make for a smoother implementation of the Medicare prescription drug benefit and many complex provisions in the Medicare Modernization Act (MMA). Health and Human Services (HHS) officials pushed hard for the Medicare reform legislation and have a high stake in establishing workable regulations and policies.
Although many elderly voters are confused about the new Medicare drug benefit and managed-care choices provided by the MMA, seniors seem to consider the new program worth trying. Bush actually did better among elderly voters this time, and efforts by Sen. John Kerry and Democrats to denounce the Medicare pharmacy benefit as inadequate and a giveaway to rich pharma companies and insurers evidently did not sit well with the public; that strategy may have even cost Senate Minority Leader Tom Daschle (D, SD) his seat. Voters complained that the presidential debate on healthcare was not specific enough and failed to offer real solutions, a perception that hurt Democrats.
The launch of the Medicare pharmacy benefit in January 2006 will focus more public attention on drug costs, utilization and marketing. (See "Rolling Out the Regs,") Medicare drug plans will be establishing formularies, posting negotiated prices, promoting treatment protocols, and tracking adverse events and outcomes more thoroughly. All these actions are likely to shape prescribing practices and utilization of new products. Although prescription drugs account for only about 12 percent of total healthcare outlays, medical products are a growing and highly visible portion of spending.
Policy makers are under pressure to make new therapies more affordable and accessible. They will gain more clout to do so as the government becomes the purchaser of more than half the prescription drugs used in the United States. Despite Republican rhetoric about relying on free-market competition, the administration may find itself championing a range of cost-control initiatives—including more flexibility in allowing imports from abroad.
While broad health reform is not on the Bush policy agenda, a number of health issues important for pharmaceutical companies are likely to emerge. These include:
Liability reform. Stronger Republican control of the Senate could open the door for action on medical malpractice reform. Physicians have been pressing for caps on liability awards as a way to curb soaring malpractice insurance premiums, but proposals have been stuck in the Senate for years. During the campaign, Bush and other Republicans blamed malpractice awards for pushing up healthcare costs, a trend that also encourages defensive medicine and costly medical procedures. A majority of voters seem to agree that malpractice litigation raises costs, as seen in the adoption of several state referendums capping malpractice payments.