Capitol Watch: Update on Healthcare Issues
January 3, 2008
by: Elizabeth Wright

Government WasteWatch, Winter, 2008

Although several healthcare issues stalled in the first session of the 110th Congress, healthcare continues to be the major domestic concern in Washington, D.C. The subject has already begun to drive the presidential campaign, especially among Democratic primary contenders. From re-authorization of the State Children's Health Insurance Plan (SCHIP) to continued efforts to open the borders to drug importation (often erroneously labeled “re-importation”) to designing a pathway for a Food and Drug Administration (FDA) approval process for generic biologics to developing a universal healthcare system, Washington politicians and presidential candidates will be hotly debating these matters.

SCHIP, created in the 1997 Balanced Budget Act, was due to be renewed in 2007. Designed as a federal-state partnership, its original purpose was to provide health insurance to uninsured children in low-income families whose incomes were too high to qualify for Medicaid. Big-government fans, always looking for an opportunity to herd more people into taxpayer-funded healthcare systems, wanted to find a way to expand the program to middleclass families. The House and Senate approved H.R. 976, which increased the cost to $60 billion over five years and attempted to fund it with a 61-cent per pack increase in cigarette taxes.

But President Bush vetoed the bill and his veto has been sustained. Negotiations and serious arm-twisting began in an attempt to change the legislation just enough to pick up the 2/3 majority of voting members to override the president’s veto. Congress sent up a second bill, but that too was vetoed. In an unusual move, the House voted to delay a vote on a veto override until January, perhaps in an effort to gain time to mount a campaign against some Republicans and force them to vote in favor of the legislation. In the meantime, CAGW expects a simple extension of SCHIP to be passed to fund the program into next year. Expect another scorching debate over healthcare in Congress and on the campaign trail.

Drug importation continues to rear its head. There is always a significant chance that a drug importation bill could be attached to legislation that is moving through Congress. Many Americans have accepted the myth that legalizing drug importation means that individuals simply get to “re-import” cheaper American- made drugs from other countries, such as Canada. This is a dangerous assumption. Studies have shown that if importation is legalized and consumers or commercial outlets, such as pharmacies, are allowed to purchase medicine outside the current U.S.-regulated system, it is highly likely consumers will receive counterfeit, expired, or adulterated drugs.

The Food and Drug Administration (FDA) and U.S. Customs and Border Protection mfound that 88 percent of imported drugs that entered the country were unapproved medications. Europe has tried a similar system, called parallel trade, which is rife with adulterated drugs. EU customs officials seized more than 560,000 packets of fake medicines in 2006, twice what was taken in 2004. For now, it appears that well-publicized scandals involving tainted Chinese imports, as well as a significantly devalued dollar, have put a damper on this misguided initiative.

There was great hope at the beginning of 2007 that Congress would pass legislation that would establish a pathway to produce generic versions of biotech drugs. Biotech drugs are made from biological substances derived from living organisms. Some well-known biologics are Epogen®, which stimulates bone marrow to produce red blood cells or Pulmozyme ®, which is used to treat cystic fibrosis.

Advocates for creating that pathway had hoped to include language in an FDA reform bill, but Congress, particularly in the House, could not reach a consensus on the issue, making it highly unlikely to pass this year. Unfortunately, many biotech drugs are coming off of patent protection, which means longer delays before physicians and consumers will be able to access these less expensive, safe biogeneric drugs.

Universal, single-payer, or national health insurance - whatever it is called - means government-run healthcare. This continues to be an intense topic, particularly within the Democratic presidential primary debates. But Republicans are also offering solutions to getting all Americans insured, as well.

The political environment will be different this year, compared to the early 1990s, when HillaryCare was on the front burner. Because of ever-increasing costs, many businesses are looking to dump the costs of providing health benefits, and the government looks like the likely dumping ground.

Washington politicians, always eager for a quick fix, are all too eager to accommodate them, for example, by expanding SCHIP. Don’t be fooled by the siren call of “free” healthcare. Costs must be borne by someone, either through higher taxes for a government-run plan, smaller salaries in the private sector in exchange for an insurance benefit, or spread among consumers in the marketplace. An equally important matter is whether politicians and bureaucrats, employers, or patients will be in charge of the decision-making process.