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Local drug stores lose in GOP Medicare plan

Washington Bureau Chieffritz
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By SARA FRITZ, Times Washington Bureau Chief

© St. Petersburg Times
published June 24, 2002


WASHINGTON -- Don't try to tell your community pharmacist that the Republican Party favors small business. He or she will laugh in your face.

That's because pharmacists are convinced the House Republican leadership has crafted a Medicare prescription drug plan intended to hurt them. And this comes on top of the Bush administration's effort to create a drug discount card that would also undercut the local pharmacist.

Republicans historically have portrayed themselves as the champions of small business.

"Small businesses are the underlying essence of our economy," says the GOP platform adopted in 2000. "Small businesses create most of the new jobs and keep this country a land of opportunity. They deserve far better treatment from government than they have received."

In keeping with those sentiments, GOP Reps. Bill Thomas of California and Nancy Johnson of Connecticut insist they took into account the concerns of the community drug store owners when they drafted the Medicare legislation, which is expected to pass the House later this week. But the pharmacists expected more.

"While our concerns may have been considered, they have certainly not been responded to in the House Republican bill," the leaders of nine pharmacy groups said in a letter to House Speaker Dennis Hastert, R-Ill. "Therefore, it is important to know that the legislation as it is drafted will be strongly opposed by pharmacy organizations, as well as practicing pharmacists throughout the country."

According to the pharmacists, the legislation would severely restrict what pharmacies Medicare beneficiaries could use to fill their prescriptions. If a senior wanted to use a pharmacy that is not a part of the plan, that person would be forced to pay extra. The reason is that the Republican plan puts the management of the program entirely into the hands of a group of businesses known as pharmacy benefit managers. These companies are the middlemen in the drug delivery system. They buy drugs from the manufacturers, usually at a discount, and offer them to pharmacies and consumers.

The trouble, as the pharmacists see it, is there is nothing in the legislation that would require pharmacy benefit managers to share discounts with retailers. In fact, it is likely the benefit managers will try to circumvent retailers by selling directly to consumers through mail order.

The bill also pre-empts state consumer protection laws that promise consumers will have a choice of pharmacies, according to John Rector, executive director of the National Community Pharmacy Association.

Republicans estimate it would cost the government an extra $4-billion over 10 years if the community were permitted to play a larger part in the program. Even if the $4-billion is accurate, which Rector doubts, he does not think it would be too much to spend in the context of a $310-billion bill. Why would Republicans, who persistently laud the entrepreneurship of small business, write a bill designed to hurt a large number of people who operate local drug stores? Rector contends Republicans owe more loyalty to drug manufacturers and pharmacy benefit managers.

Thomas, chairman of the House Ways and Means Committee and the principal author of the bill, received almost $319,000 in contributions from health-related contributors before the last election, including $128,000 from companies that manufacture or distribute pharmaceuticals and related health care products.

Yet while Thomas may not care about pharmacists, many Republicans who will cast their votes in favor of the Medicare bill -- including Florida's Mike Bilirakis and C.W. Bill Young -- are seen in their communities as advocates of small business. Likewise, Rep. Donald Manzullo of Illinois, chairman of the House Small Business Committee, will be torn between his loyalty to the party and his commitment to small business.

Although thousands of pharmacy owners have been contacting their Republican representatives this weekend, trying to make their case against the bill, the measure is likely to pass on a party line vote.

The vote will be close, however. "At best, it's going to be a squeaker for the Republicans," Rector predicted.

Next time a Republican Congress member shows up at your local rotary, chamber of commerce or town meeting, ask him how he justifies voting for a measure that jeopardizes the profitability of small business.

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