GOP Doctors: ‘Doughnut Hole’ Deal Stays No Matter What

By Melissa Attias, CQ Staff

A group of House Republican physicians says that if the Supreme Court strikes down the health care law this month, the discounts seniors currently receive for prescription drugs in the coverage gap known as the “doughnut hole” should remain in effect because they are part of a deal between Democrats and the pharmaceutical industry.

Georgia Republican Phil Gingrey, co-chairman of the House GOP Doctors Caucus, said its members discussed the doughnut hole issue at a June 8 meeting on the upcoming Supreme Court decision on legal challenges to the 2010 overhaul (PL 111-148, PL 111-152). The court is expected to announce its ruling by the end of the month.

“PhRMA agreed to that deal, didn’t they? Well, God bless them,” Gingrey said, referring to the Pharmaceutical Research and Manufacturers of America. “That was the risk they took and that’s fine. That problem is solved. Why do we need to do anything to solve the problem with the doughnut hole? It’s already been done.”

Texas Republican Michael C. Burgess, another member of the caucus, agreed. He said the discounts are provided by PhRMA funds and should still be available if the law goes down.

“If PhRMA wants to come cut another deal, come to our committee and talk to us. But right now I’d say a deal’s a deal,” Burgess said. “If that’s what the White House and the industry worked out to fix the problem, it’s not part of the law, I think that it’s still in effect. So the doughnut hole really is a moot point in my opinion.”

Burgess and Gingrey sit on the Energy and Commerce Committee, which would write most bills to replace the law if it were to be struck down.

An industry source pointed to the section of the health care law that established the legal framework for the Medicare coverage gap discount program. Beginning in 2011, that program requires the secretary of Health and Human Services to enter into agreements with drug manufacturers that oblige companies to provide eligible beneficiaries in the doughnut hole with a 50 percent discount on brand-name drugs.

But other lawmakers in the 21-member caucus agreed with Gingrey and Burgess that the discounts should continue even if the law disappears.

“That’s totally separate from this constitutional issue,” said Phil Roe, R-Tenn. “That’s a deal ... that big PhRMA made with Medicare and the administration.”

Over the past few weeks, Republican members of the Energy and Commerce Committee have released information on closed-door negotiations between the drug industry and the White House as part of an ongoing investigation.

In addition to the discount program, the health care law includes increases in coverage for generic drugs and — beginning in 2013 — brand-name drugs that gradually rise until 2020 to help close the doughnut hole. This year, seniors in the doughnut hole are receiving a 50 percent discount on brand-name drugs covered by drug manufacturers and a 14 percent discount on generics. The generic drug discount is subsidized by Medicare.