Politics

Prescription Discounts In Limbo

By CBSNews.com staff CBSNews.com staff

September 7, 2001 / 7:29 PM EDT / CBS

Not two months after he unveiled it, the President's prescription drug card was shredded by a federal judge who ruled the White House overstepped its authority, reports CBS News Chief White House Correspondent John Roberts, leaving the administration's hopes riding on a physician-senator from Tennessee.

An injunction filed Thursday by U.S. District Court Judge Paul Friedman would keep the program from starting for several months. The court said administration officials lacked the legal authority to begin the plan.

Under the White House plan, which Mr. Bush announced with great fanfare in July, the federal government would help facilitate the sale — for about $25 — of cards that could be used to purchase prescription drugs at a discount. The companies that would manage the cards would be responsible for negotiating lower prices. White House officials insisted congressional approval was not required.

Officials were set to promote the cards and other private programs available to Medicare recipients in a multimillion-dollar advertising campaign this fall.

"The seniors needed it — and we wanted to give it to them," said Health and Human Services Secretary Tommy Thompson. "We're saddened by the fact that the court has now said we didn't have the statutory rights to do that."

The President had meant to get the jump on Congress, which still hadn't moved on a prescription drug bill, offering seniors moderate discounts on drugs at select pharmacies. But chain drug stores, who claimed they would suffer economic hardship from the program, went to court to block it, arguing the plan was "clandestine and unlawful" because federal officials don't plan to pay for the discounts.

"Community pharmacies have a very, very slim profit margin," said Larry Kocot, general counsel of the National Association of Chain Drug Stores. "They operate on a 1 to 2 per cent profit margin. Asking community pharmacies to bear the burden of a discount is just not fair."

Medicare officials have said the government would not pay for the cost of medicines, nor negotiate prices with drug makers. Drugstores have feared they would be forced to cover the bulk of the price breaks.

Now the White House has three choices:

Drop the idea
Appeal the ruling, or
Seek authority from Congress, but there's not much chance they'll get that.

"I've never been impressed with that plan as being anything substantial or very meaningful," said Rep. Richard Gephardt, D-Missouri, and House Minority Leader.

However, a Senate ally of President Bush said he would introduce a bill that would let the administration promote a Medicare prescription drug card program that was temporarily blocked by a federal judge.

Sen. Bill Frist, R-Tenn., said Friday he supported the president's plan to give what amounts to a government seal of approval to the discount cards.

"I hope and believe that this discount card is a first step that we can all embrac," said Frist, who added that he had the backing of GOP leaders.

The worst medical-program headache for the White House Thursday came in a just-leaked two-month-old report drafted by Health and Human Services. It spells out options the administration was considering to reduce federal inspection of some nursing homes and ease sanctions against homes where patients were actually harmed. After the report was leaked to The New York Times, officials rushed to say the recommendations were dismissed weeks ago.

"Any options dealing with any changes in the nursing home procedures that could lead to less inspections were rejected out of hand," said White House Press Secretary Ari Fleischer.

The White House did say Thursday that it will soon issue new rules on nursing home care and safety, and pledged there will be no attempt to roll back inspection or enforcement.

Opposition to the Frist prescription card bill remains unclear in the Senate. A spokesman for Sen. Max Baucus, D-Mont., who oversees Medicare policy, said the committee would remain focused on creating a prescription drug benefit for all participants.

"The main point is that this legislation, despite its intentions, should not be considered a substitute nor a panacea for universal prescription drug coverage," said Michael Siegel, a spokesman for Baucus.

But Frist, who has often transformed the president's views into Senate proposals, said, "It would provide real and immediate relief for millions of senior citizens and individuals with disabilities who now pay too high a price for the prescription drugs they need."