PNHP

Response of John Gilman, M.D., Health Policy Advisor to Senator Paul Wellstone:

Response of John Gilman, M.D., Health Policy Advisor to Senator Paul Wellstone:

“With this background, what are the current proposed solutions? Any form of universal, comprehensive reform is totally off the table.” — Don McCanne

Come on Don. Affordable universal health care may be off most of Washington’s radar screens, but not ours. Senator Wellstone, Congresswoman Tammy Baldwin, and Congressman David Obey (along with Reps. Conyers, Baca, Carson, and Filner) introduced the Health Security for All Americans Act last year and will reintroduce it again this Spring. This bill would assure that all Americans have affordable comprehensive health care within 5 years of its enactment. It is supported by APHA, Families USA, AMSA, and SEIU. No, it is not a national single payer bill; but it does set the national parameters that states must meet in terms of benefits, quality and affordability, and it provides matching federal funds (on average 70% federal, 30% state) to allow states to adopt the system of their choice, including single payer. This is a practical and principled approach that is capable of putting universal health care back on the table. It deserves attention
and support from anyone concerned about reaching universal coverage.

The Washington Post
March 6, 2001
“Bush Urges Congress to Revamp Medicare”

President George W. Bush:

“I believe the framework for a bipartisan consensus about how to make sure the Medicare system fulfills its promise is at hand, and we’ve got a lot of work to do.”

Comment: Medicare remains under intense attack. The Medicare “modernization” proposal of President Bush and the “bipartisan,” anti-government members of Congress is simply a proposal to shift more
of the costs of Medicare away from the tax system and onto the Medicare beneficiaries. The current out-of-pocket expenses already impair access to care for our moderately low income retired and disabled population, simply because of lack of affordability. The “premium support” or “competitive premium” proposal will compound this problem for these lower income individuals. We need to protect and improve Medicare. We should not support the “generosity” of our leaders who would like to use Medicare to provide additional grist for the middlemen vultures of the health plans. We need to remind our leaders that vultures don’t feed on
grist, they feed on carcasses.

Don McCanne
mccanne1@home.com

Drug access shouldn't be reliant on industry goodwill, but be ensured by law

Government is concerned that poor people’s access to quality medicines is dependent on the goodwill of individual industry players. With the Medicines and Related Substances Control Amendment Act of 1997 – now tied up in a court battle initiated by the pharmaceutical industry – government wants to ensure its ability to provide medicines for all, for ever.

The latest SA Health Review 2000 – launched last Thursday – confirms that drug expenditure puts an unsustainable burden on state coffers as the HIV/AIDS pandemic claims more and more victims, and contributes most significantly to the inequality in access to healthcare between the private and public sector. “Public sector sales are expected to make up 24%, which translates to R59.36 per person not belonging to a medical aid scheme.ÊIn contrast, the per capita expenditure on prescription drugs in the private sector would be R800.29,” according to the Review.

The total value of drug sales is anticipated to be R8.25 billion, according to figures released to the SA Health Review Team by the Pharmaceutical Manufacturers Association.

Background to the court case

Health Director-General Dr Ayanda Ntsaluba said in a press briefing at the weekend that he took part in the 1993 health expenditure analysis which found government was making a disproportionate allocation to drugs. This, says Ntsaluba, culminated in the now disputed Act.
In January 1998, Zuma met with the pharmaceutical industry, represented by the Pharmaceutical Manufacturers Association.

Government supports activists' role in court

The government on Monday expressed support for the Treatment Action Campaign becoming a party to the court case brought by pharmaceutical companies challenging legislation making provision for cheaper medicines.

“They have to deal with matters of life and death,” MTK Moerane, counsel for the government, told the Pretoria High Court.

“It would be an injury not to admit them.”

The Pharmaceutical Manufacturers’ Association has brought an application against the state in opposition of certain sections of the Medicines and Related Substances Control Amendment Act, which it says infringes on patent rights. The PMA is acting on behalf of about 40 local and international drug companies.

The TAC, a lobby group campaigning for equal and affordable access to Aids drugs, applied to join the case as a “friend of the court’ in support of the government.

Arguing in opposition to the TAC move, PMA counsel SA Cilliers said the court case was not specifically about access to medication for HIV or Aids patients.

At issue was the constitutionality of certain sections of the Act, not cheaper Aids drugs, he contended.

Judge President Bernard Ngoepe ruled that the PMA should go ahead with its arguments as if the TAC had been allowed to join the case.

The court was earlier adjourned for about 10 minutes due to repeated power failures. – Sapa

©2001. All rights strictly reserved.

Court hearing has global implications

AIDS Drug Test Case: World’s Pharma Unions Back South Africa

ICEM Update, No. 10/2001, 5 March 2001

Countries must have the right to buy AIDS medication at an affordable price.

That call was issued in Copenhagen this morning by the leader of trade unions in the world’s pharmaceutical industry.Ê

Fred Higgs, General Secretary of the 20-million-strong International Federation of Chemical, Energy, Mine and General Workers’ Unions (ICEM), was speaking as a crucial court case opened in South Africa today.Ê

Developing countries’ access to medication is at issue in the test case between the South African government and 39 big pharmaceutical companies.Ê

To protect their patents, the major drug corporations are asking the court to stop the implementation of a South African law aimed at providing cheaper medicines. The law would permit the country’s health minister to use parallel importation of drugs, compulsory licensing and generic substitution (cut-price “copy” drugs) where necessary.

Application of this Act has already been delayed for several years by the legal wrangles. The measure is particularly important to the fight against HIV/AIDS in South Africa, which has one of the world’s highest rates of HIV infection.Ê

“As part of the ICEM’s programme to combat HIV/AIDS, we believe that South Africa and other countries must have the right to buy the appropriate pharmaceuticals at prices that they can afford,” said Higgs this morning. He was in South Africa last week at an ICEM conference where African and Asian unions adopted a programme of action on HIV/AIDS.

“We hope that the South African courts will defend South Africa’s rights in this regard,” Higgs added. “We ask ICEM-affiliated unions to express their support for the South African government’s position.”Ê

ICEM affiliates include pharmaceutical workers’ unions worldwide.

Higgs was speaking at the congress of the ICEM-affiliated Danish Women Workers’ Union (KAD), which is celebrating its centenary this year. Over a thousand delegates are attending the congress.

Angry protests as companies start drug battle

The battle over South Africa’s medicine legislation came to a head on two fronts in Pretoria on Monday – in the city streets and in the High Court.

As angry words flew when protesters demanding cheaper drugs delivered a memorandum, the court heard in legal argument that the issue was not about affordable and accessible drugs.

The crux of the matter was the constitutionality of the Medicines and Related Substances Control Amendment Act of 1997, the Pharmaceutical Manufacturers’ Association (PMA) contended.

Representing about 40 local and international pharmaceutical companies, it wants the court to prevent the enforcement of the act.

‘You are treating us with contempt’ The PMA’s legal representative Fanie Cilliers SC said certain sections of the act were unconstitutional. They were also in breach of the Patents Act and the country’s international
obligations.

As the case got under way, thousands of protesters opposing the PMA court action gathered in Church Square about a block away.

The demonstration was organised by the Congress of SA Trade Unions, the Treatment Action Campaign (TAC), religious bodies and a range of other organisations.

After marching past the High Court building in Vermeulen Street, the protesters proceeded on a 5km walk to the United States embassy in Arcadia.

There they were upset when senior embassy official Robert Godec refused to walk through the crowd to receive a memorandum outlining their demands.

Cilliers opposed the joining of the TAC “You are treating us with contempt,” Cosatu president Willie Madisha told Godec.

Madisha later made a brief appearance in the courtroom, where Cilliers argued that a section of the act gave the health minister the power to render lawful what the Patents Act rendered unlawful.

Another section, which provided for compulsory substitution of scheduled medicines by generic drugs, could be dangerous, and was in breach of property provisions in law, as well as the constitutional rights of equality and freedom of expression, he said.

At the start of Monday’s proceedings, Cilliers opposed the joining of the TAC as “friend of the court” in support of the government.

M T K Moerane SC, for the government, expressed his support for the TAC joining them.

“We believe the clients they represent are at the sharp end of what we regard as the unreasonable conduct of the applicants. It would be an injustice not to admit them.”

Cilliers requested time to consult his clients. The judge ruled that the matter should continue in the meantime as if TAC had been allowed to join. – Sapa

©2001. All rights strictly reserved.

Thousands march against drugs multinationals

Thousands of protesters marched from Pretoria’s Church Square around 11am on Monday to the city’s High Court where they picketed to show support for the government in its court battle against the Pharmaceutical Manufacturers’ Association, a group which represents multinational drugs companies.

The pharmaceutical firms are approaching the court in a bid to stop the country importing cheaper generic medicines, including a cost-effective anti-AIDS “cocktail”.

The marchers, filling the length of an entire street block, marched down Church and Bosman Streets on their way to the court in Vermeulen Street.

They were led by Pretoria’s Catholic Archbishop George Daniel and Bishop David Beetge of the Anglican Church.

‘We cannot allow them to succeed’ Traffic officials, police and marshals were trying their best to keep the march orderly, and several city streets had been closed.

Before leaving Church Square, the protesters were led in prayer by religious leaders.

The marchers included members of the Congress of South African Trade Unions (Cosatu) , the African National Congress, the SA Communist Party, the Treatment Action Campaign, and other unions.

“We cannot allow them to succeed, and will continue our fight. If we don’t do that it means that we allow people to die,” Cosatu’s president, Willie Madisha, said at the march.

Should the drugs firms win the case, Cosatu would approach the National Economic Development and Labour Council to push for procedures allowing the union to “mobilise around this as a socio-economic issue,” he said.

Cosatu would also approach the Constitutional Court. – Sapa

©2001. All rights strictly reserved.

Low-cost insurance program can't keep healthy enrollment

San Diego Union Tribune
March 4, 2001
by Susan Duerksen

“Despite intense efforts to get all eligible children covered by Healthy Families insurance, children are dropping out of the federal program almost as fast as they sign up.”

Comment: “Healthy Families” is California’s version of the State Children’s Health Insurance Program (S-CHIP). The leading proposals for incremental reform call for expanding eligibility under the S-CHIP program. In spite of significant efforts, California has fallen far short of being able to enroll all eligible individuals, and will never be able to because of the inherent nature of the administration of the S-CHIP program. The statement above suggests that California is approaching a steady state in enrollment, with children rotating in and
out of the program. Although S-CHIP should be supported as a temporary, urgent stop gap, it and all of the other incremental concepts can never address the real issues that face us. We have the resources to provide comprehensive care to everyone, but we have a system that is totally incapable of allocating our resources effectively. We will never have resolution of this issue until we make the decision to establish a publicly administered, universal risk pool.

Low-cost insurance program can’t keep healthy enrollment

San Diego Union Tribune
March 4, 2001
by Susan Duerksen

“Despite intense efforts to get all eligible children covered by Healthy Families insurance, children are dropping out of the federal program almost as fast as they sign up.”

Comment: “Healthy Families” is California’s version of the State Children’s Health Insurance Program (S-CHIP). The leading proposals for incremental reform call for expanding eligibility under the S-CHIP program. In spite of significant efforts, California has fallen far short of being able to enroll all eligible individuals, and will never be able to because of the inherent nature of the administration of the S-CHIP program. The statement above suggests that California is approaching a steady state in enrollment, with children rotating in and
out of the program. Although S-CHIP should be supported as a temporary, urgent stop gap, it and all of the other incremental concepts can never address the real issues that face us. We have the resources to provide comprehensive care to everyone, but we have a system that is totally incapable of allocating our resources effectively. We will never have resolution of this issue until we make the decision to establish a publicly administered, universal risk pool.

Drug access shouldn’t be reliant on industry goodwill, but be ensured by law

Government is concerned that poor people’s access to quality medicines is dependent on the goodwill of individual industry players. With the Medicines and Related Substances Control Amendment Act of 1997 – now tied up in a court battle initiated by the pharmaceutical industry – government wants to ensure its ability to provide medicines for all, for ever.

The latest SA Health Review 2000 – launched last Thursday – confirms that drug expenditure puts an unsustainable burden on state coffers as the HIV/AIDS pandemic claims more and more victims, and contributes most significantly to the inequality in access to healthcare between the private and public sector. “Public sector sales are expected to make up 24%, which translates to R59.36 per person not belonging to a medical aid scheme.ÊIn contrast, the per capita expenditure on prescription drugs in the private sector would be R800.29,” according to the Review.

The total value of drug sales is anticipated to be R8.25 billion, according to figures released to the SA Health Review Team by the Pharmaceutical Manufacturers Association.

Background to the court case

Health Director-General Dr Ayanda Ntsaluba said in a press briefing at the weekend that he took part in the 1993 health expenditure analysis which found government was making a disproportionate allocation to drugs. This, says Ntsaluba, culminated in the now disputed Act.
In January 1998, Zuma met with the pharmaceutical industry, represented by the Pharmaceutical Manufacturers Association.

Government supports activists’ role in court

The government on Monday expressed support for the Treatment Action Campaign becoming a party to the court case brought by pharmaceutical companies challenging legislation making provision for cheaper medicines.

“They have to deal with matters of life and death,” MTK Moerane, counsel for the government, told the Pretoria High Court.

“It would be an injury not to admit them.”

The Pharmaceutical Manufacturers’ Association has brought an application against the state in opposition of certain sections of the Medicines and Related Substances Control Amendment Act, which it says infringes on patent rights. The PMA is acting on behalf of about 40 local and international drug companies.

The TAC, a lobby group campaigning for equal and affordable access to Aids drugs, applied to join the case as a “friend of the court’ in support of the government.

Arguing in opposition to the TAC move, PMA counsel SA Cilliers said the court case was not specifically about access to medication for HIV or Aids patients.

At issue was the constitutionality of certain sections of the Act, not cheaper Aids drugs, he contended.

Judge President Bernard Ngoepe ruled that the PMA should go ahead with its arguments as if the TAC had been allowed to join the case.

The court was earlier adjourned for about 10 minutes due to repeated power failures. – Sapa

©2001. All rights strictly reserved.

Millions pin hope on drugs hearing by Anso Thom, Independent Online

The hopes of millions of South Africans and fellow Africans will be pinned on the outcome of the court case between 41 pharmaceutical companies and the government which starts in Pretoria today.

Led by the Pharmaceutical Manufacturers’ Association (PMA) of South Africa, a trade association representing the research-based pharmaceutical industry, legal action was instituted against the government in February 1998 to defend the industry’s patent rights.

Action on the part of industry is specifically aimed at Section 15C of the Medicines and Related Substances Control Amendment Act (No 90 of 1997), which – according to the PMA – allows for the “abrogation of all patent rights for any pharmaceutical upon ministerial discretion”.

The department would ‘defend this costly action to the fullest extent’ It allows the government to buy drugs from countries where prices are already lower – thus trading in parallel with local sellers of the same drugs.

The PMA said the health department had argued in 1997 and 1998 that Section 15c was intended purely to enable the government to occasionally parallel-import a product it believed might be overpriced in South Africa.

PMA’s chief executive officer Mirryena Deeb said the government had since announced that Section 15C was “model legislation designed to allow for compulsory licensing and parallel trade”.

Director-general for health Dr Ayanda Ntsaluba said the department would “defend this costly action to the fullest extent because it is so fundamental to transforming South Africa’s highly inequitable healthcare system” so that even the poorest sections of society benefited.

Jackie Achmat of the Treatment Campaign (TAC) confirmed that the activist group would apply today to join the case as a friend of the court.

‘They have less to do with the manufacturing’ “We believe the patents system as it stands is undermining the right of access to medicines. We’re prepared to use the existing patent system, but would like to see an international body re-examine it and put healthcare above patent law. We need to find a way that people get rewarded for their efforts, but at the same time ensure there’s no obstacle to making medicines more affordable.”

When questioned on the high prices of their drugs, pharmaceutical companies blamed research and development costs for the high costs of innovator drugs.

But analysis of the top 12 drug manufacturers in America in 1999 showed that their median percentage of revenue dedicated to research and development was 12,4 percent, whereas a median of 34,3 percent was dedicated to marketing and administrative costs.

According to the SA Health Review, huge profits made by the pharmaceutical industry were another reason to question the need for high drug costs.

For the past 10 years, the pharmaceutical industry had been the most profitable in America, with median profit rates more than triple those of other leading companies.

Chief executive officers of the top 10 firms averaged about R80-million each in salaries in 1999, with stock options averaging another R80-million each.

“Drugs prices are therefore considered to a large extent to be managed by their manufacturers, rather than by the market, said the SA Health Review.

“They have less to do with the manufacturing and development costs of the particular product, and more to do with the characteristics of the market in which they are placed.”

In another recent development, the United States has complained to the World Trade Organisation that Brazil’s “local working” requirement in its patent law is in violation of the Agreement on Trade-related Aspects of Intellectual Property Rights, better known as TRIPS.

The US argues that the local working requirement gives the Brazilian government the power to issue compulsory licenses, or import either the patented product or the product obtained from the patented process, when companies fail to work their patents locally.

The local working requirement thus applies when drug companies import patented drugs rather than produce them locally, but only if the companies fails to show that it is not economically or legally viable to produce
locally.

©2001. All rights strictly reserved.

The Implications of the 2000 Election

This message is about a very subtle yet crucially important topic. It is long because it cannot be stated in a few words. I saved it for Saturday, since some will have time during the weekend to read it.

The New England Journal of Medicine
March 1, 2001
“Health Policy 2001”
by R.J. Blendon, D.E. Altman, J.M. Benson, and M. Brodie

Quote from article, with footnotes:

“We believe there is a reasonable chance that legislation representing a compromise between the Bush and Gore positions can be enacted that will help 4 million to 10 million of the nation’s 43 million uninsured
persons receive coverage. Such legislation might make it possible for some employed but uninsured persons to obtain coverage through tax credits that would pay for part of the cost of private health insurance
policies. The availability of medical savings accounts might also be increased. In addition, self-employed persons might receive tax incentives to encourage them to purchase insurance. Complementing these
private-sector approaches would be an increase in funds for states to expand Medicaid coverage and the State Children’s Health Insurance Program for persons with low incomes. The states could be given greater
discretion in determining how these two federal-state programs would be structured and administered.”

Comment: No footnotes? What gives? This description af a political agenda for our health care system does not really need to be referenced with footnotes as long as it begins with, “We believe that…”

This quote is from the New England Journal of Medicine, a publication noted for its academic purity. The lead authors are Robert Blendon, Sc.D., Professor at the Harvard School of Public Health, and Drew Altman, Ph.D., President and CEO of the Kaiser Family Foundation, two of the most ethical and highly respected individuals that help to bring light on the problems inherent in our health care system. Let me state up front that in no way do I question the integrity of these icons for whom I have the most profound respect. I believe that the problem that I address is a very subtle one that has received very little consideration.

What is this that they state they believe? They believe that the leading proposals have a significant chance of enactment. They base their belief on scientifically valid surveys of the American public and on the opinion of those that now control the agenda by virtue of having been elected to office. These are very reasonable conclusions.

Robert Blendon and his colleagues have a well deserved reputation for capably assessing the opinions of the public on matters of applications of health policy. They and others have shown that Americans express
greater distrust in the ability of the government to meet our social needs, and that private solutions have increasing support. But Americans do believe that the government can have a significant role in meeting the needs of the more vulnerable members of our society.

With this background, what are the current proposed solutions? Any form of universal, comprehensive reform is totally off the table. It is nowhere in sight. Supporters of universal coverage such as Ron Pollack and Jim McDermott are now seeking solutions that are compatible with the background laid down by the studies of Blendon, et al. Ron Pollack of Families USA has joined with Chip Kahn of the Health Insurance Association of America to propose the Medicaid and S-CHIP expansions, along with tax credits, as mentioned in the “We believe” statement above. Democrat Jim McDermott and Republican Jim McCrery are proposing refundable tax credits as a compromise that might increase coverage of the uninsured.

There are serious problems with the proposals under consideration. Tax deductions and tax credits are not really health care legislation but really are tax proposals. Most of the benefit would accrue to those that already have health care coverage. Low income individuals do not benefit unless they are given a refundable tax credit that approximates the cost of health care coverage, an extremely unlikely prospect in the current political climate. Medical savings accounts are a favorite of conservatives since they benefit the healthy and wealthy, leaving out the sick and poor. Medicaid has been chronically underfunded and the S-CHIP program has Spartan benefits. Expanding these programs for low income individuals perpetuates muti-tiered health care. Legislation expanding the role of private health plans perpetuates the administrative waste and flawed health policy characteristic of these plans. Even if all of these proposals were adopted, at best we would still be leaving over three-fourths of the uninsured without coverage.

Every informed person agrees that we have enough resources to provide comprehensive care for everyone. A publicly administered, universal program would correct most of the defects in funding and allocating
health care In America. So why has this concept been totally rejected and kept out of public forums and press coverage of health care reform?

Simply, those that have control the agenda, whether the media, public forums, legislative hearings, or whatever, repeatedly cite the studies that show that Americans do not want the government involved in their
health care. Innumerable presentations in print, at forums, or wherever, specifically cite the Harvard University/Kaiser Family Foundation/Washington Post studies that confirm that concept. This perception is so pervasive that even Al Gore said, “We don’t want one-size-fits-all,” and Sen. Clinton supports the “small steps” of incrementalism. Consequently, all current proposals are limited to incremental expansions.

Although these polls demonstrate that anti-government rhetoric has permeated and molded the opinions of our society, do they show an accurate picture? Do Americans really want government out of their health care system? I often ask audiences, “How many here would like to see Medicare abolished and not replaced with any other program?” Rarely do any hands go up. If Medicare had been established as a universal program, I sincerely believe that the support would be the same, considering the great resources that we have that would be available to everyone.

When issues are carefully explained, then individuals make decisions based on their values rather than on the rhetoric. Unfortunately, the nation is poorly informed on the real issues involved. For instance the NEJM article contained the statement, “Two thirds or more of both Republicans and Democrats favor the use of tax credits to help the uninsured buy private health insurance.” This response is expected. It really sounds like a good idea. But suppose, before you ask that question, you explain the issue. You point out that a tax credit proposal will have to be a bipartisan compromise. The Democrats will prevail in seeing that the tax credit is refundable so that it will provide cash to the low income individual to enable the purchase of health care coverage. The Republicans will prevail in insisting that the amount of the credit will be modest because “we cannot afford to pay for” a generous tax credit. Studies have confirmed that such a proposal will not be adequate to make coverage affordable for most of the uninsured, but it will provide a tax subsidy for the more affluent who already have insurance. Now, let’s ask a more accurate question. Instead of asking, “Do you favor the use of tax credits to help the uninsured buy private health insurance?”, let’s ask, “Do you favor the
use of tax credits for purchasing private health insurance, a proposal that would provide a generous tax subsidy for the more affluent, and might allow a very limited number of lower income individuals to
purchase insurance?” I believe that the results would have been dramatically different. A very important question that we should ask ourselves is whether we should consider the opinions of Americans when
we make policy decisions, if those decisions are going to be based on perceptions of rhetoric rather than on a clear understanding of the fundamental issues involved.

The concept that I want to make clear is that these studies do not only show us where Americans believe they stand on health care reform, but they are also driving the political agenda for reform. I emphasize that
that these are opinions on where Americans believe they stand, but they are not opinions on where they would stand if they understood the full implications of the policy behind the rhetoric. The rhetoric is even influencing the pollsters. They are asking questions about private versus government. Is Medicare private or government? It is a publicly funded program that uses the private and public health care delivery
system. Such dual choice questions are frequently inappropriate.

The Harvard/Kaiser/WP poll asks, “Do you favor a national health plan, financed by taxpayers, in which all Americans would get their insurance from a single government plan?”. There are many problems with the
phrasing of this inquiry, but the term “government” assures a negative response, based on reflexive rejection of the rhetorical implications, but not based on a comprehensive knowledge of the policy issues involved. Indeed, this one question has been used repeatedly to support the position that Americans do not want national health insurance (even though they do support Medicare.) It is being used to keep the consideration of comprehensive reform off of every agenda.

Polls could be designed that would ferret out the true values of Americans. Those are the polls that should be used to establish policy. The current polls, which are based more on rhetoric, are being used by each interest to further their own political agendas. In the case of health care, they are being used to dismiss, without
consideration, a rational, ethical approach to reform: a publicly administered, universal risk pool. In reforming health care, we need to understand the position of Americans, but their position on their values, not on their rhetoric.

Don McCanne
mccanne1@home.com