Who's Benefiting from the Medicare Drug Plan?

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Finally, 6.1 million low-income seniors who used to receive their drugs under Medicaid, which required pharmaceutical manufacturers to offer drugs at their "best prices," have been transferred to the new Medicare drug program, which doesn't have the lowest price requirement. As a result, the pharmaceutical industry stands to make an extra $30 billion over the next decade, according to the report.

Bush Administration officials point out that the January-June profits cited in the Democrats' report come from drug company sales all over the world. "The global profits of these companies had little to do with the Medicare spending here," argues a Department of Health and Human Services aide, particularly since millions of seniors didn't sign up for the benefit until near the May 15 deadline, five months into the year. Nelligan also says the average premium seniors are paying for the benefit "is almost 25% lower than predicted last year because of aggressive price negotiation and competition" by the private insurance companies administering the plan. The Democrats' "politically inspired report failed to mention that the Medicare prescription drug program has improved the lives of millions of seniors," says Ken Johnson, vice president of the Pharmaceutical Research and Manufacturers of America, which represents the drugmakers. "Ninety percent of today's Medicare beneficiaries are now receiving drug coverage."

Democrats aren't persuaded. The entire program "is a multibillion-dollar giveaway to the drug companies," complains Rep. Henry Waxman, the Government Reform Committee's top Democrat. Ultimately, seniors will decide which party has made the best case when they go to the polls in November.