Class Action Suits Have Weakened State Regulation, ACLI Tells Congress

The availability of class action litigation, Leahy says, allows ordinary people to band together to take on powerful corporations or even their own government.

"I am hesitant to restrict legal rights and remedies in an era of corporate irresponsibility and executive misconduct," he says.

As for payments to lawyers, Leahy says defense lawyers tend to be paid by the hour, and well paid.

Plaintiffs lawyers, on the other hand, tend to work without pay for the possibility of obtaining a portion of the proceeds, if successful, he says.

"To those who think it is good politics to attack the plaintiffs lawyers who risk much so that their clients may obtain a measure of justice, I hope they will think again," Leahy says.

In other news, the Senate failed to pass legislation establishing a prescription drug benefit for Medicare recipients, but did approve a bill aimed at increasing the availability of generic drugs.

The failed Medicare drug effort came as an amendment to S. 812, the generic drug bill.

Under the amendment, which garnered only 49 of the 60 votes needed to be attached to S. 812, a $400 billion program would have been established to subsidize precription drug costs to Medicare beneficiaries who pay a $25 annual enrollment fee.

The amendment would have provided comprehensive coverage for all drug purchases for beneficiaries with incomes up to 150% of the poverty line and for those with "catastrophic" costs, defined as more than $4,000 in out-of-pocket spending.

The demise of the amendment makes it unlikely that Congress will establish a Medicare drug benefit this year.

The underlying bill, S. 812, however, was approved by a 78-21 vote, despite controversial language added during consideration of the bill on drug reimportation.

Under S. 812, the Food and Drug Administration would have greater flexibility in approving generic alternatives to brand name drugs.

The reimportation amendment requires drug manufacturers to charge U.S. customers no more than they charge in foreign countries.

The National Association of Health Underwriters, Arlington, Va., while praising the increased availability of generics, blasted the drug reimportation language.

"This is blatant price control," says Janet Trautwein, vice president of government affairs.

"NAHU has never supported price controls in any area because they have a consistent history; they dont work," she says.

Trautwein says countries that control prices have some less expensive medications, but they also have a lower variety of medications.

Indeed, she says, lower cost generics are often not readily available in countries with price controls, which could push overall drug costs higher.

The House is expected to consider S. 812 in September.

Reproduced from National Underwriter Life & Health/Financial Services Edition, August 5, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.