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DEMOCRATIC PRESS RELEASE

January 24, 2007

AKAKA DEBUNKS MISCONCEPTIONS ABOUT VETERANS’ AFFAIRS PRESCRIPTION DRUG COVERAGE

WASHINGTON D.C. – U.S. Senator Daniel Akaka (D-HI), Chairman of the Senate Veterans’ Affairs Committee, addressed his Senate colleagues today, to respond to misconceptions and alleviate concerns surrounding VA prescription drug coverage.

The text of Senator Akaka’s Floor Statement is found below.

“Mr. President, much has been said recently about the way in which VA purchases drugs and the manner in which medications are provided to beneficiaries. This discussion has been a part of the ongoing debate to allow Medicare to negotiate for drugs on behalf of its beneficiaries.

Concerns have been raised about veterans’ access to drugs, the quality of the benefit, and VA’s formulary and pricing. Much of what has been said about veterans medication coverage is, frankly, wrong. I would like to take this opportunity to set the record straight about the process by which VA achieves drug cost savings and the level of care afforded to veterans.

VA is different than Medicare for a variety of reasons, there is no doubt, but I believe some lessons can be applied to address Medicare drug prices.

While there is no question that VA’s formulary is an important component of VA pharmacy management, decisions about which drugs are on the formulary are not made by bureaucrats nor are they made by those solely concerned about the bottom line.

VA employs a scientific review process to select drugs to be available to beneficiaries and to ensure quality care. Physicians and clinical pharmacists from the VA’s regional offices manage the formulary.

While some concern has been expressed that the VA formulary covers only 30 percent of the 4,300 drugs available on Medicare’s market-priced formulary, this is not the case. Rather, it is my understanding that VA actually offers 11 percent more drugs than are available under Part D of Medicare.

VA offers 4,778 drugs by way of a “core’ national formulary which requires that they must be made available at all VA medical care facilities. If a drug is needed which is not on the formulary, VA has a quick process to ensure that the drug will be prescribed. This off-formulary process is so robust, in fact, that last year, VA dispensed prescriptions for an additional 1,416 drugs. So, to put a finer point on this, when a non-formulary medication is clinically needed – it is provided.

To those who argue that VA’s formulary is “among the most restrictive in the marketplace,” I would only say that the Institute of Medicine took a good long look at VA and found that in many respects it is actually less restrictive than other public or private formularies. The Chairman of the IOM Committee said that if VA did not have a formulary process like it has, they would have indeed urged that one be created just like it.

Some have suggested that veterans receive substandard care because of the VA drug benefit. The literature says otherwise. Veterans get better pharmaceutical care than private or public hospitals, according to a study last year published in the Archives of Internal Medicine.

VA’s mail order pharmacy has been criticized, as well. VA employs nearly 10,000 pharmacists and technicians and is regarded by many pharmacy organizations as excellent. VA also operates 230 outpatient pharmacies. VA also trains more Doctors of Pharmacy than any other single organization in the U.S. And most significantly, while the error rate for prescriptions in the US is between 3 and 8 percent, the error rate in VA is less than one one-hundredth of one percent.

In VA, new drugs are reviewed on their merits, and are made available quickly if they provide distinct benefits. Safety and how well a drug works are the most important considerations in the review process, followed by cost.

Mr. President, I could go on. We know that VA gets the best prices, but I think the essential question is: Do veterans get the necessary drugs to promote the best health care? The answer – based on peer-reviewed studies – is a resounding yes. The quality of medical care in VA is significantly higher for overall quality in chronic care and preventative care.

And if some believe that veterans aren’t happy with their drug access and pricing, it is news to me, and to the Administration. Just last week, VA announced results of a survey done by an independent reviewer of customer satisfaction. For the seventh straight year, the Department of Veterans Affairs has received significantly higher ratings than the private health care industry. VA’s marks keep continuing to rise. I ask unanimous consent that VA’s summary of the study be included in the Record.

When veterans’ groups testify before Congress about their needs and desires, the only thing they say about their drug coverage is that they want to keep it the way it is.

Peer-reviewed studies, veterans service organizations, polls, and consumer reports consistently testify to the superiority of VA health care over private sector care. The VA formulary has been repeatedly reviewed and approved by Congress, GAO and the Institute of Medicine. Consumer choice provides clear insight into the success of the VA pharmacy management system.

We can learn a number of lessons from the VA as we consider Medicare price negotiations. I support drug price negotiation by Medicare. As Chairman of the Veterans Affairs Committee, I will closely monitor the evolution of this issue to ensure VA retains access to affordable drugs. The gains that can be made in Medicare – and the improvement of quality – are just too great to do nothing.”

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Larry Scott

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