After the Obama administration proposed overhauling Medicare Part B earlier this year, a plethora of patient advocacy groups quickly expressed opposition. A new analysis, however, finds that the vast majority of those groups received funding from the pharmaceutical industry, which may come out losers if the proposal goes into effect.
Specifically, 110 of the 147 patient groups that oppose the plan — or 75 percent — have received financial backing from drug makers, according to Public Citizen, the consumer group. The patient groups were identified from signed letters opposing the proposal that were sent to members of the Centers for Medicare and Medicaid Services, which is overseeing the overhaul.
Another 241 patient groups, which Public Citizen maintained are mostly associated with doctors or drug makers, also signed letters opposing the overhaul. The findings are based on voluntary disclosures that patient groups and drug makers provide on their websites, according to Public Citizen, which noted that the total amounts of industry backing are mostly unknown.
As we noted previously, the administration wants to encourage greater use of lower cost, but equally effective, medicines covered by the Part B program, which pays for injectable and infused drugs for the elderly. The move, which would lower drug spending by reducing reimbursement fees for doctors, reflects growing concern over the rising cost of medicines, which is straining public health programs.
Under the Part B program, doctors and hospitals buy a medicine, and the government reimburses the average sales price plus 6 percent. But the experiment, which would run five years starting this fall, would pay physicians the average sales price, as well as another 2.5 percent and a flat fee of $16.80. Presumably, this would provide greater payments for lower-cost generic drugs.
But a March 17 letter sent to congressional leaders signed by the Community Oncology Alliance called the overhaul “misguided and ill-considered.” The groups wrote that “Medicare beneficiaries with life-threatening or disabling conditions would be forced to navigate a CMS initiative that could potentially lead to an abrupt halt in their treatment.” Here is the other letter, which was sent to CMS on May 9 by the Partnership to Improve Patient Care.
Beyond the potential hit to revenue, the pharmaceutical industry sees this effort as a sort of litmus test to demonstrate that it has the political muscle needed to discourage other attempts to attack drug pricing. In particular, drug makers want to demonstrate there would be resistance to allow Medicare Part D to negotiate prices.
“While it is certainly not the case that every patient group that takes industry money is a big pharma puppet, the fact that three-quarters of the patients’ groups opposing these reforms receive industry money should make policymakers skeptical of these groups’ independence,” said Rick Claypool, a Public Citizen research director and author of the report, in a statement.
Last month, Public Citizen ran a separate analysis that found lawmakers who oppose the Medicare Part B overhaul have received considerably more financial support than lawmakers who have not raised objections. Of 310 lawmakers who either signed two letters opposing the plan or were critical of it received more than $7.2 million from drug and health products companies for their 2016 campaigns.
The amount given to each representative averaged more than $23,300. At the same time, 124 rank-and-file lawmakers — 117 Democrats and seven Republicans — who did not sign either letter, received a combined total of nearly $1.6 million from the same industry for their 2016 campaigns. They averaged more than $12,700.