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THE WHITE HOUSE

Office of the Press Secretary


For Immediate Release April 10, 2000
            PRESIDENT CLINTON RELEASES NEW PRESCRIPTION DRUG
                       COVERAGE AND PRICING STUDY

                             April 10, 2000

Today, the President will release a new study by the Department of Health and Human Services (HHS) that shows, among numerous other findings, that seniors without drug coverage not only lack insurance against high costs, but do not have access to the discounts and rebates that insured people receive. He will underscore how this comprehensive report clearly validates the need for a voluntary, affordable prescription drug benefit that is available to all beneficiaries. Key findings include: (1) not even counting manufacturers' rebates, prescription drug prices for those without coverage are typically 15 percent higher than prices paid on behalf of people with coverage; (2) this price gap almost doubled between 1996 and 1999; (3) Medicare seniors and people with disabilities without drug coverage are five times more likely to report being unable to purchase prescriptions as those with coverage; and (4) in addition to the millions of completely uninsured, nearly half of seniors with Medigap did not have that coverage for the entire year. The study contains other findings confirming that Medicare beneficiaries without drug coverage fill fewer prescriptions and have higher out-of-pocket spending across all groups, even among the most ill. However, because of the limited information about price discounts, the President will announce that HHS will hold a conference on prescription drug pricing practices this summer.

KEY FINDINGS FROM "PRESCRIPTION DRUG COVERAGE, SPENDING, UTILIZATION, AND PRICES" REPORT. The HHS study, available in its entirety at http://aspe.hhs.gov/health/reports/drugstudy, demonstrates that:

President WILL ANNOUNCE THAT ADMINISTRATION WILL hold a conference on drug costs and pricing practices. As the HHS study makes clear, not enough is known about costs and prevalent pricing practices by the pharmaceutical industry. To further the policy debate, HHS in collaboration with the private sector will convene a conference this summer including representatives of beneficiaries, purchasers, pharmacists, pharmaceutical manufacturers and researchers to clarify actual pricing and discounting practices and their impact on Medicare beneficiaries. Topics covered may include:

STUDY RESULTS CALL FOR ENACTMENT OF PRESIDENT'S PLAN TO STRENGTHEN AND MODERNIZE MEDICARE

The study's findings underscore the need for a voluntary Medicare prescription drug benefit that is accessible and affordable to all beneficiaries. The President's plan would give these elderly and disabled beneficiaries the option to purchase a prescription drug benefit that covers half of all drug costs up to $5,000 when fully phased in and includes a stop-loss provision to protect seniors against catastrophic drug costs. Its premiums would be affordable to both beneficiaries and the program; it would be competitively administered; and it would assure access to needed medications. The President's prescription drug benefit is part of a larger plan to strengthen and modernize Medicare. This plan also includes reforms to make Medicare more competitive and efficient and dedicates $432 billion to Medicare to help pay for the prescription drug benefit and to improve the program's financing, helping to extend the life of its trust fund to at least 2030.

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