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POWER SHIFT MAY AFFECT MEDICARE DEBATE

WASHINGTON -- The defection of Vermont Sen. James Jeffords from the Republican Party, scheduled to become official this week, could affect the debate on drug benefits for the elderly and the role of retail pharmacy in dispensing those drugs.With the balance of power in the Senate now tilted toward the Democrats, some industry watchers see a tougher road ahead for the type of drug- benefit plan proposed

WASHINGTON -- The defection of Vermont Sen. James Jeffords from the Republican Party, scheduled to become official this week, could affect the debate on drug benefits for the elderly and the role of retail pharmacy in dispensing those drugs.

With the balance of power in the Senate now tilted toward the Democrats, some industry watchers see a tougher road ahead for the type of drug- benefit plan proposed by the Bush Administration. Instead of that proposal, in which states would have received federal assistance in paying for prescription drugs for the elderly, a plan in which Medicare would be expanded to include coverage for prescription drugs is likely to be more prominent in the discussion, at least in the Senate.

"The Democrats' idea of what a prescription-drug benefit should be is dramatically different from what the Republicans, as embodied by the Bush proposal, think it ought to be," said Ira Loss, a health-care analyst at Washington Analysis, a research firm based here.

It's not Jeffords' vote alone that shifts the outlook for the drug-benefits debate. It's the fact that Democrats now take the helm of some key committees, including the Senate Finance Committee and the Senate Committee on Health, Education, Labor and Pensions. Sen. Max Baucus, D-Mont., will become chairman of the Senate Finance Committee, through which any drug-benefit legislation must pass.

"He's been a pretty outspoken critic of the pharmaceutical industry," Loss said. "Last year he was pretty active in supporting the drug re-importation legislation, and he is from a border state where the Canadian pricing discrepancy is a big issue."

Loss also theorized that because Baucus annoyed some of his Democratic colleagues by compromising so quickly with Republicans on the recent tax-cut issue, he might try to mend fences with Democrats by aggressively pushing their proposals for prescription-drug reform.

Retailers are fearful of any plan that would give pharmacy benefit managers too much control and steer patients toward mail order and away from community pharmacies, according to Larry Kocot, senior vice president and general counsel at the National Association of Chain Drug Stores, Alexandria, Va. "The structure of the benefit will trend toward what the Democrats had proposed+ which is PBM-driven," he told SN.

The NACDS has aligned with seven other pharmacy associations to form the Pharmacy Benefits All Coalition, which is seeking to obtain a pharmacy benefit over and above a simple prescription-drug benefit. The PBAC sent a letter outlining its position to congressional leadership last month in anticipation of the upcoming Medicare debates. Among other suggestions, the letter proposes that Medicare "provide payment to pharmacists and pharmacies consistent with the time and intensity required to provide special medication education and counseling to the senior population."

The coalition, which was formed earlier this year specifically for this purpose, also proposed that Congress re-evaluate the roles of PBMs in patient care and cost management. Pharmacists perform those functions during their personal interactions with patients, the coalition maintains.

However, Loss said that when the debate over how to pay for prescription drugs for the elderly heats up next year, no cost-cutting measures would be spared.

"I think there are two things that are definite for any drug plan that gets adopted," he said. "One is that they will emphasize the use of generic drugs, and the other is that they will utilize any other mechanism that can save money, and that includes mail order, and that's definite. That will be in there regardless of what the final deal is."