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CBO TELLS WYDEN ELIMINATING DRUG AD COSTS
COULD SAVE HUNDREDS OF MILLIONS
Wyden-Sununu legislation would eliminate cost
to taxpayers of drug advertising
for medicines provided through Federal health care programs
June 30, 2005
Washington, DC – At a
hearing of the Senate Special Committee on Aging today, the Director
of the Congressional Budget Office (CBO), Douglas Holtz-Eakin,
told U.S. Senator Ron Wyden (D-Ore.) that the Federal government
potentially could save between $300 million and $500 million if
the cost of advertising prescription drugs directly to consumers
is eliminated in Medicaid alone. Wyden and U.S. Senator John Sununu
(R-N.H.) introduced legislation earlier this year to require discounts
for Federal health programs such as Medicaid, to eliminate advertising
costs passed on by pharmaceutical companies. Today, Holtz-Eakin
suggested ways that the Wyden-Sununu legislation could maximize
savings for American taxpayers.
Wyden asked Holtz-Eakin, “It’s
our sense that the government could save about $300 million to
$500 million a year on Medicaid, in effect, over a billion dollars
over a five year period. Do you think that’s a reasonable
analysis?”
Holtz-Eakin said that if Medicaid,
which may buy as much as ten percent of all prescription drugs
in the coming years, is able to eliminate its share of advertising
costs for those drugs, $300 million to $500 million in savings
is a reasonable estimate.
“Billions of taxpayer
dollars could be saved through the advertising provisions Senator
Sununu and I are working on,” said Wyden. “I’m
pleased that we’ve found a way here to get savings in the
Medicaid program without hurting anyone.”
Drugs advertised directly to
consumers are among those drugs on which Federal programs spend
the most total money for outpatient care. Studies have indicated
that advertising, not medical need, may contribute to increases
nationally in prescriptions for those drugs. Wyden and Sununu
unveiled the Pharmaceutical Advertising and Prudent Purchasing
Act of 2005 in May to reduce taxpayers’ costs for commonly
advertised prescription drugs purchased by Medicaid and other
Federal programs. The Wyden-Sununu legislation also requires a
report to Congress on how drugs advertised directly to consumers
impact Federal programs in terms of purchase volume, cost, and
their suitability for patients’ medical needs.
For more information on the
Wyden-Sununu Pharmaceutical Advertising and Prudent Purchasing
Act, go to
http://wyden.senate.gov/media/2005/05262005_drug_advertising_bill.html
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