Free vaccine entering health care system

August 16, 1993|By New York Times News Service

WASHINGTON -- Over strenuous objections of some drug companies, the federal government is establishing a program that is designed to guarantee free vaccine for millions of children who are poor or uninsured.

Under the program, which Congress created as part of the budget bill and the president signed into law Tuesday, the government will buy the vaccine at discount prices from drug manufacturers and distribute it at no charge to doctors who choose to participate.

The doctors, in turn, will not charge patients for the vaccine. Though they may charge a fee for administering it, they cannot turn away a child whose parents are unable to pay.

For procedural reasons having to do with Senate rules, a key appropriation for the new program had to be dropped from the budget bill and now awaits enactment when Congress reconvenes early next month.

But that provision -- making federal money available to clinics so they can hire additional staff, extend their hours of operation and identify children who need to be immunized -- has bipartisan support in Congress and is sure to be enacted when Congress returns.

Drug companies have argued that parental negligence, not the cost of vaccine, is the main reason for the nation's low immunization rate. In the past, they point out, even though free vaccine was available to some children in some states, their parents did not always take them to be immunized. It is for that reason that there is bipartisan support for programs to identify children who need the shots.

The program is a scaled-down version of one proposed by President Clinton, who wanted the federal government to buy and distribute all childhood vaccine in the United States. Instead, the program will serve children who are enrolled in Medicaid and are uninsured or who get their shots at community health centers.

Nevertheless, it represents a new entitlement program for children that goes far beyond Medicaid, the federal-state program serving about half of the nation's poor people.

It will make vaccine available to children who meet certain eligibility criteria, including many whose families have too much income to qualify for Medicaid benefits. Ten million children under 18 years old have no health insurance even though, in most cases, their parents work.

It is not clear how the government will prevent cheating by parents who assert that their children are uninsured.

At a time when Congress is trying to curb the growth of other benefit programs, such as Medicare for the elderly, the Congressional Budget Office estimates that the immunization program will cost the federal government $585 million over five years.

Both supporters and critics of the new program say that, in many ways, it reflects the goals of the national health care plan being devised by the Clinton administration. It significantly expands the role of the federal government in an effort to guarantee universal access to an important health care service while controlling its cost.

"The vaccine initiative was the cornerstone of health care reform," says Isabelle Claxton, a lobbyist in the Washington office of Merck & Co., which makes vaccine against measles, mumps and rubella, among other diseases.

Executives at many drug companies, including Merck, are upset by the government's effort to control the costs of vaccine. The secretary of Health and Human Services will negotiate prices with vaccine manufacturers, but the new law limits what the government can pay to the current price of a vaccine purchased under federal contract, adjusted for inflation.

Mr. Clinton has harshly criticized drug companies for raising vaccine prices, though companies say the price of many vaccines sold to the government has increased more slowly than the overall Consumer Price Index in recent years.

Dr. R. Gordon Douglas, president of the vaccine division of Merck & Co., told Congress that "we intend to raise our prices to the full extent permitted" by the law.

The company says the increases are justified because the government will buy more of its vaccine at a discount, leaving less for sale at full price in the private market.

To prevent private insurers from shifting costs to the federal government, the new law says that private health plans may not reduce coverage of childhood vaccines below the level in effect on May 1 of this year.

Although Congress scaled back Mr. Clinton's proposal to have the government distribute all childhood vaccines, states can take advantage of the federal contracts to make them more widely available. Using their own money, states can buy as much vaccine as they want at the reduced prices and distribute it, if they wish, to all children in the state, regardless of family income.

"The commitment to provide vaccine against preventable childhood diseases must be constant and certain," a congressional report says.

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