It certainly wasn't ugly for the drug lobby
which invested more than $10 million in campaign
contributions during the last election and has been a source
of lucrative employment opportunities for congressmen when
they leave office.
Former senators Dennis Deconcini, D-Ariz., and Steve Symms,
R-Idaho, and former congressmen like Tom Downey, D-N.Y.; Vic
Fazio, D-Calif.; Bill Paxon, R-N.Y., and former House
Minority Leader Robert Michel, R-Ill., all registered as
lobbyists for the drug industry and worked on the
prescription drug bill.
"I can tell you that when the bill passed, there were better
than 1,000 pharmaceutical lobbyists working on this," says
Rep. John Dingell, D-Mich.
Dingell has been in Congress for 52 years and is the new
chairman of the House Energy and Commerce Committee which
shares jurisdiction over Medicare. He says the bill would
not have passed without the efforts of the drug lobby.
"There is probably a lotta truth in it that the bill was
stacked in their benefit. And it's probably also true that
it was written by their lobbyists," he says.
Says Jones: "You couldn't even walk to the steps of the
Capitol without having somebody, maybe one or two, coming up
to you to say, 'Can't you change your vote? Can't you vote
for this bill?' "
Why was the drug lobby was so interested in this bill and
what did it have to gain? Ron Pollack the executive director
, a nonpartisan health care watchdog group,
says it all boiled down to a key provision in the
It prohibited Medicare and the federal government from using
its vast purchasing power to negotiate lower prices directly
from the drug companies.
"The key goal was to make sure there'd be no interference in
the drug companies' abilities to charge high prices and to
continue to increase those prices," says Pollack.
Pollack says there's no question that this was prompted by
the pharmaceutical lobby.
"They were the ones who wanted to make sure Medicare could
charge high prices and to continue to increase those
prices," he said.
The drug industry says that competition among private
insurance plans that service the Medicare program help keep
prices low. But Families USA reported in a January study
that Medicare patients are being charged nearly 60 percent
more for the top 20 drugs than veterans pay under a program
run by the U.S. Department of Veterans Affairs.
For example, Lipitor, a popular cholesterol drug, the
cheapest Medicare price is $785 for a years supply 50
percent more than the VA's price of $520.
For Zocor, another cholesterol drug, the best Medicare price
is $1,485 for a years supply. The same drug only costs $127
a year under the VA's plan.
Read the full Families USA report
Pollack says the VA successfully negotiates with the drug
companies on price.
"Medicare could do the same thing," he says, "but Medicare
is prohibited from doing that as a result of this new
"What was the logic? Or what was the idea, the rationale
behind not giving the government the ability to negotiate
drug prices?" asks Kroft.
Burton says it was simply that the drug companies didn't
"They wanted to make as much as money as possible. And if
there's negotiation, like there is in other countries around
the world, then they're gonna have their profit margin
reduced," he says.
Before the vote, Congress was told the program would cost a
whopping $395 billion over the first 10 years. In fact,
Medicare officials already knew it was going to cost a lot
Burton said he and others were misled.
"Within two weeks after the bill was passed, everybody knew
it was gonna cost well over $500 billion," he says. "And
many members of the Congress [who] had voted for it said, 'I
would never have voted for it had I known that.' "
Medicare Chief Actuary Richard Foster later told Congress
that he revised the cost estimate to $534 before the vote,
but was told to withhold the new numbers if he wanted to
keep his job.
During a Congressional hearing, Foster stated: "It struck me
there was a political basis for making that decision. I
considered that inappropriate and, in fact, unethical."
Foster said the person who told him to withhold Congress
from getting the revised estimates was Medicare boss Tom