Bush Administration Drug Benefit May Result in Loss of Employer Sponsored Coverage

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Fixing Drug Law Should be a Top Priority of Bush and Kerry

New data released by the U.S. Department of Health and Human Services suggests that one third of retirees with employer-sponsored prescription drug benefits will lose that coverage as a result of the Bush Administration’s new Medicare prescription drug law. The Foundation for Taxpayer and Consumer Rights (FTCR) called on President Bush and the presumptive democratic presidential candidate Senator John Kerry (D-MA) to support changes to the law that would allow the Medicare drug program to bulk-purchase more affordable prescription drugs.

The Bush Administration-supported Medicare drug law specifically banned the program from negotiating bulk discounts with pharmaceutical companies, thereby guaranteeing a financial windfall for pharmaceutical companies and forcing seniors to pay for over-priced prescriptions.

President Bush and Senator Kerry must commit to fix the new Medicare law to ensure that seniors are able to afford the prescriptions they need,” said Jerry Flanagan of FTCR. “President Bush‘s must acknowledge that his Medicare drug plan is deeply flawed and requires immediate changes in order to provide the protections he promised to seniors.”

Seniors and some lawmakers have voiced concern that employers will cancel existing retiree drug benefits in the wake of the new law, requiring seniors to rely on the inadequate drug coverage provided in the Medicare drug plan. Under the Medicare plan, seniors receive limited prescription drug subsidies from the government which provide far fewer benefits than most employer-sponsored prescription drug plans.

The fundamental flaw of the Bush Administration Medicare law is that it does nothing to control the cost of skyrocketing prescription drug prices, according to the Foundation for Taxpayer and Consumer Rights. On Tuesday, the House of Representatives approved a bill to allow seniors to purchase lower cost U.S. made drugs from Canada.

The Canadian government, like the U.S. Department of Veterans Affairs, currently negotiate 30-60% bulk discounts on prescription drugs from U.S. pharmaceutical companies.

A better option than drug reimportation, according to the Foundation for Taxpayer and Consumer Rights, would be to allow Medicare to negotiate drug discounts directly with pharmaceutical companies.

“The pending proposals providing for the reimportation of prescription drugs are at their essence allowing U.S. consumers to piggy-back on Canada’s bulk purchasing program. On the other hand, direct bulk discount negotiations by the Medicare program, or in conjunction with the existing U.S. DVA program, would cut out the middleman and circumvent drug company tactics to dry up supply in Canada,” said Jerry Flanagan of FTCR.

According to federal filings, President Bush has received $820,774 from pharmaceutical companies since 2002, while Senator Kerry has received a total of $239,997.

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The Foundation for Taxpayer and Consumer Rights is a non-profit and non-partisan consumer advocacy organization. For more information, visit us on the web at:

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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