Looking to Canada, Not Candidates, for Prescription Drugs
As health care emerges as a hot-button campaign issue, seniors in the upper Midwest travel to Canada, where they pay significantly less for their medications.

WASHINGTON (By Terry M. Neal and Christina Pino-Marina, WP) July 21, 2004 - Border-hopping senior citizens in search of affordable medication in the upper Midwest can make for tempting icons in an election year.

Republicans have had high hopes that last year's overhaul of the federal Medicare program -- which included a new prescription drug benefit for seniors -- would help neutralize images of the elderly choosing between a month's supply of insulin and making the mortgage payment. Democrats, including Wisconsin Gov. Jim Doyle and Minnesota Sen. Mark Dayton, remain critical of the Medicare overhaul, with Dayton using his own money to fund bus trips for seniors to fill their prescriptions for less than the drugs' market rates in the United States.

But interviews with officials and dozens of older voters in Wisconsin and Minnesota suggest that many voters simply see both parties as captive of major pharmaceutical interests and lacking the fortitude to craft real, meaningful reforms. If Democrats do retain their historical edge on health care issues, it may not be a decisive one in these two battlegrounds.

Wisconsin was one of the hardest-fought states in 2000, with Al Gore winning by just two-tenths of 1 percent. He fared better, though, among the state's voters who were at least 65 years old. Nationally, seniors went for Gore over Bush, 53 percent to 46 percent, according to the exit polling. A more recent poll conducted by the University of Wisconsin for two newspapers in the state showed Bush and Sen. John F. Kerry in a statistical tie among voters who are at least 60 years old. The telephone poll of 504 randomly chosen Wisconsin residents was conducted between June 15 and June 23, and has a sampling margin of error of plus or minus four percent.

In neighboring Minnesota, at least three statewide polls during the last two months show that Kerry continues to enjoy -- and may even widen -- the two-point lead that Gore enjoyed there in 2000. But unlike in Wisconsin, the 2000 exit poll showed that Gore enjoyed no additional support among Minnesota voters who were at least 65 years old.

Many in Minnesota continue to rely on a relatively new state-sponsored program called Senior Care, which advocates for the aged say provides a far more generous benefit to far more people than the federal program.

Medicare Reform and the AARP

The new drug benefit is now part of the Medicare program that's available to most Americans over the age of 65, promising savings of 10 to 25 percent on prescriptions. Under the program, seniors can choose among scores of different cards offering different benefits, which has proved to be confusing to many potential recipients of the benefit. Individuals who earn less than $12,569 per year and couples who earn less than $16,862 qualify for an additional $600 benefit to use for their drug costs.

But beginning in 2006, the prescription drug program changes significantly. Private firms will begin to administer a more traditional prescription insurance plan that will have premiums, deductibles and out-of-pocket maximums. At that point, many of the program's costs will be phased out for lower-income beneficiaries.

The AARP, which took the controversial step of endorsing the Medicare reform bill that many of its members opposed, in recent weeks has criticized the pharmaceutical industry for big increases in the price of prescription drugs that it says chip away at the value of the new federal benefit.

The organization, the nation's largest and most influential senior lobbying group, released a study showing that prices for the top 197 name-brand drugs used by Americans aged 50 and older increased by 6.9 percent in 2004, while the overall consumer price index rose 2.3 percent.

AARP also found an increase of 3.4 percent in drug prices for the first quarter of 2004. John Rother, policy director for AARP, renewed the group's call for enactment of a bipartisan-sponsored Senate bill (S 2328) that would authorize drug "re-importation" from countries such as Canada where government controls keep retail prices far below U.S. rates. The bill would punish pharmaceutical companies that try to thwart such competition by limiting supplies to foreign countries that sell drugs for lower prices than in the United States.

"The closer you get to Election Day, the more important this issue becomes," he said.

The Minnesota Experience

On one recent bus trip to Canada that was sponsored by Dayton, several seniors said they saw Bush as a captive of the pharmaceutical industry. But many said that neither Bush nor Kerry had focused enough on health care issues.

"Right now all the attention is on the war," said Avalon Welch, a 67-year-old retired teacher from Minneapolis. "It should be, but the other things are important, too, like the economy and health care. I haven't heard any solutions from either candidate. There's not enough talk about it."

Dayton said not only the administration, but the many Democrats who supported last year's Medicare reform could face a backlash from voters this year.

"The members of both [parties] who would not allow a better legislation to pass, as well as the administration, have a serious day of reckoning ahead of them with the general public," said Dayton, who voted reluctantly for the bill. "And I believe myself that they should be held accountable for the failure to pass comprehensive drug coverage for those who need it."

The Minnesota Senior Federation, which has morphed into one of the nation's most active state-based senior advocacy organizations, has been organizing such trips for about a decade. The group also runs a program to help seniors import prescriptions from Canada, which is technically illegal but politically tricky to stop.

Dayton has been funding the trips out of his own pocket for the last few years, donating his Senate salary to the federation. The trips run approximately once a month, each carrying about 20 seniors.

Departing from a parking lot in St. Paul, the eight-hour bus trip takes seniors past the farms and lakes of Minnesota, on to Royal Fork Buffet in Fargo, N.D., for lunch, then across the U.S.-Canada border to Winnipeg. A Canadian doctor there visits with each patient and transforms their U.S. prescriptions into Canadian ones. The next day the prescriptions are picked up at a Canadian pharmacy, where seniors save up to 40 percent on their medications.

Each two-day excursion costs Dayton about $125 per person and includes food, transportation and lodging, said Alicia Beskar, a health issues organizer with the federation and a chaperone on the trips.

While relatively few Minnesotans make this trip, those who do have become a symbol of the plight of the lower-income elderly and the extent to which many will go to save money on their prescriptions.

Dayton said in an interview in his Washington office that during his campaign he would meet seniors, especially elderly widows who "would just start to tremble -- their hands, their faces -- or their eyes would well up with tears." Dayton said in order to afford their medication, "they'd have to cut back on something else, heating or food."

But David Strom, president of the Taxpayers League of Minnesota, a conservative organization based in Plymouth, Minn., accuses Dayton and Gov. Tim Pawlenty (R), who is pushing the federal government to pass the drug re-importation law, of indulging in populist politics that yield short-term solutions and ignore market reality.

"Re-importation for individuals -- it may be an individually rational activity for people to pursue lower prices on particular products," Strom said. "But for policy makers to promote that as a solution to our overall problem with the escalating costs of prescription drugs is a huge mistake.

"The problem really is not the prices. The prices are a symptom of a larger problem, which is this imbalance in the market, where you have a domestic market, which is essentially free, and then price-controlled markets in the rest of the world."

The Wisconsin Experience

Across the state line, growing pressure from senior groups such as the AARP to do something about the spiraling cost of medications led Wisconsin officials to create Senior Care. Virtually everyone over 65 is eligible for the three-year-old program, in which recipients with lower incomes receive higher benefits.

The legislation had bipartisan support and was signed into law by Republican former governor Scott McCallum in 2001. It was funded by a combination of an increased cigarette tax and a Medicare waiver supported by federal Health and Human Services Secretary Tommy Thompson, also a Republican, whom McCallum succeeded as governor.

The state program maintains its supporters despite last year's federal Medicare reform. In a letter to the state's Senior Care recipients, Doyle, the state's current Democratic governor, advised that the state program remains the better choice for most of them. The Wisconsin AARP, which has conducted training for some 90,000 members on the new federal benefit, agrees.

"We heard from folks that they really felt [Medicare reform] wasn't going to benefit them that much," said Wisconsin AARP's Lisa Lamkins, a communications official who helped develop training materials on the state and federal programs for the organization's members. "A lot of people feel that it really hasn't lived up to expectations. ... We're encouraging most people to stay in Senior Care."

And that's exactly what Tony Lopez, a 78-year-old retiree from Verona, Wis., says he's going to do. A self-described swing voter who usually sides with Republicans, Lopez says he'll probably vote for Bush this year -- but not because of the president's advocacy for the Medicare bill, which he says has changed his life little.

Lopez said he and his wife live on a combined income of about $16,000 in Social Security and veterans' benefits. Their expenses for a combination of illnesses would cost about $3,600 a year -- more than 20 percent of their income -- without Senior Care. With Senior Care, they pay about $1,200 a year. Lopez said that savings far exceeds what his household would receive under the federal program.

"Both of these parties want to take the credit for it," he said in an interview at the Verona Senior Center last month. "But I don't think either party should really get credit for it. They both voted for it, and it hasn't done much. I think the states can do a better job handling this than the federal government can."

The disenchantment with the federal legislation is found throughout the senior population and its advocacy organizations in Wisconsin.

"Older people are very upset and disappointed over this new Medicare law, the discount cards and the fact that people aren't getting very much out of it," said Tom Frazier, executive director of the nonpartisan Coalition of Wisconsin Aging Groups, an umbrella organization for 600 senior groups. "The bill was more or less written by the drug industry."

Advocates for the drug industry defend the new law as a workable and beneficial free-market compromise that will help people while maintaining the ability of drug companies to make a profit. And they cite industry efforts to get drugs into the hands of the poorest patients.

"For people who are not seniors, our companies have patient assistance programs," said Lori Reilly, deputy vice president for policy at Pharmaceutical Research and Manufacturers of America. "Last year, 37,000 Minnesotans got free medications from PhRMA companies through our patient assistance programs, which offer free medicines for low-income people."

Dave Krieg, a 73-year-old retiree from the Madison area who is not a member of a political party, reflected a common sentiment heard there: The new federal prescription drug benefit is too little, helps too few and has proved to be too confusing to help those who qualify for it.

"In an attempt to gain credit for it, the Republicans are going to use it in ads and speeches," Krieg said. "But that will be countered by the fact that most people in the state of Wisconsin are absolutely confused by it."