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DRUGS
DRUGS
PARTNERSHIP FOR A DRUG-FREE AMERICA
RACIAL/ETHNIC DRUG USE COMPARISONS
1992 "Monitoring the Future Study"
Racial/ethnic comparisons of drug use prevalence and trends among African-
Americans, Hispanics, and whites reveal clear findings contrary to most popular
stereotypes. According to the 1992 SAMHSA Household Survey, for example,
more than 76 percent of all current illicit drug users are white. Most instructive,
however, are comparisons among teens done by the Institute for Social Research
at the University of Michigan which are summarized below and detailed in the
attached tables.
African-American teens are currently the least likely to try or use every
category of illegal drugs, including alcohol and tobacco.
African-American teens' lower prevalence/usage levels are across eighth,
tenth, and twelfth grade age groups -- suggesting that these differences
almost certainly are not due to any impact of dropout rates.
The lower usage rates among African-American teens are directly correlated
with their stronger anti-drug attitudes of perceived risk/harm and social
disapproval.
The rate of decline in usage rates among African-American teens since the
mid-1980's has been greater than that of white teens.
New analyses done by Dr. David Hawkins of the University of Washington,
to be released in April 1994, suggests one of the key factors in African-
American teen resistance is parental involvement in setting "no use" as the
behavior standard and social norm.
TABLE 10
Racial/Ethnic Comparisons of Lifetime, Annual, Thirty-Day, and Daily
Prevalence of Use of Various Types of Drugs
Eighth, Tenth, and Twelfth Graders
NOTE: Percents represent averages of 1991 and 1992 dataᵃ
Marijuana
Inhalantsᵇ
Hallucinogens
LSD
Cocaine
Grade:
8th
10th
12th
8th
10th
12th
8th
10th
12th
8th
10th
12th
8th
10th
12th
Lifetime:
White
9.9
23.0
36.3
18.4
18.1
19.3
3.6
7.2
10.8
3.0
6.7
10.1
2.3
3.7
7.0
Black
7.4
16.2
23.3
10.3
8.6
6.8
0.9
0.8
1.1
0.7
0.7
0.9
1.0
1.3
2.4
Hispanic
19.0
26.9
40.7
19.6
14.1
16.6
6.1
6.0
9.3
5.3
5.2
8.4
5.9
6.7
12.1
Annual:
White
6.4
17.0
24.9
10.1
8.3
7.2
2.2
4.9
7.0
1.9
4.6
6.5
1.2
2.1
3.3
Black
4.1
7.6
11.5
4.4
3.6
2.5
0.7
0.2
0.7
0.5
0.2
0.6
0.7
0.6
1.3
Hispanic
11.9
18.9
24.7
10.4
6.4
6.1
3.8
3.6
4.7
3.3
3.2
4.1
3.1
3.7
5.3
30-Day:
White
3.3
9.0
14.1
4.7
2.9
2.4
0.8
2.0
2.5
0.7
1.9
2.2
0.5
0.7
1.3
Black
2.0
3.6
6.1
2.4
2.0
1.5
0.4
0.2
0.3
0.3
0.1
0.3
0.4
0.1
0.7
Hispanic
6.4
10.4
12.7
5.5
3.0
2.5
1.9
1.4
1.5
1.7
1.2
1.2
1.7
1.1
1.9
Daily:
White
0.2
0.9
2.1
-
-
-
-
-
-
-
-
-
--
-
-
Black
0.1
0.3
0.6
-
-
-
-
-
-
-
-
-
-
-
-
Hispanic
0.3
0.8
2.1
-
-
-
-
-
-
-
-
-
-
-
-
NOTE: The following sample sizes are based on the 1991 and 1992 surveys combined.
8th
10th
12th
Sample Sizes:
Grade
Grade
Grade
White
21900
19600
21500
Black
4200
3900
3900
Hispanic
3400
2600
2600
TABLE 10 (cont.)
Racial/Ethnic Comparisons of Lifetime, Annual, Thirty-Day, and Daily
Prevalence of Use of Various Types of Drugs
Eighth, Tenth, and Twelfth Graders
NOTE: Percents represent averages of 1991 and 1992 dataᵃ
Crack
Other Cocaineᶜ
Heroin
Other Opiates
Stimulantsᵈ
Barbituratesᵃ
Grade:
8th
10th
12th
8th
10th
12th
8th
10th
12th
8th
10th
12th
8th
10th
12th
8th
10th
12th
Lifetime:
White
1.2
1.6
2.7
2.0
3.4
6.2
1.2
1.2
1.1
-
--
7.4
11.2
14.7
16.7
-
-
6.5
Black
0.6
0.7
1.1
0.8
1.1
2.1
0.7
0.5
0.6
-
-
2.0
6.5
5.6
4.8
-
-
2.2
Hispanic
3.1
2.4
5.7
5.2
6.2
10.4
2.2
1.4
1.7
-
-
4.8
11.2
11.7
12.6
-
-
5.6
Annual:
White
0.7
0.9
1.3
0.9
1.9
3.0
0.6
0.6
0.5
-
-
4.1
6.8
9.4
8.8
-
-
3.5
Black
0.4
0.3
0.6
0.6
0.5
1.0
0.4
0.3
0.4
-
-
0.9
3.3
2.8
2.3
-
-
1.1
Hispanic
1.9
1.5
2.7
2.6
3.4
4.3
1.4
0.7
0.9
-
-
2.1
7.2
6.2
6.1
-
-
2.2
30-Day:
White
0.3
0.3
0.6
0.4
0.6
1.1
0.3
0.2
0.2
-
-
1.3
3.0
3.9
3.4
-
-
1.4
Black
0.3
0.1
0.4
0.3
0.1
0.6
0.1
0.1
0.3
-
...
0.5
1.5
1.4
0.9
-
!
0.5
Hispanic
1.0
0.5
1.1
1.4
0.9
1.5
0.7
0.2
0.6
-
-
0.7
3.6
2.8
1.6
-
!
0.7
Daily:
White
-
-
-
-
-
-
-
-
-
---
-
-
-
-
-
-
-
-
Black
-
-
-
-
-
-
-
-
-
-
-
-
-
---
-
--
-
-
Hispanic
-
-
-
-
-
-
-
-
-
-
-
....
-
-
-
-
-
-
(Table continued on next page)
TABLE 10 (cont.)
Racial/Ethnic Comparisons of Lifetime, Annual, Thirty-Day, and Daily
Prevalence of Use of Various Types of Drugs
Eighth, Tenth, and Twelfth Graders
NOTE: Percents represent averages of 1991 and 1992 dataᵃ
Tranquilizersᵈ
Alcohol
Been Drunkᵉ
5+ Drinks
Cigarettes
Smokeless Tobaccof
Steroids
Grade:
8th
10th
12th
8th
10th
12th
8th
10th
12th
8th
10th
12th
8th
10th
12th
8th
10th
12th
8th
10th
12th
Lifetime:
White
3.9
6.6
7.3
71.7
84.8
89.7
27.3
51.9
69.7
-
-
-
45.8
57.3
65.7
11.6
15.2
-
1.8
1.7
2.1
Black
2.2
2.0
2.5
64.0
78.0
80.1
21.3
36.5
36.7
-
-
-
32.3
40.9
44.4
4.6
6.3
-
1.5
1.2
0.8
Hispanic
5.6
6.9
6.5
71.9
83.6
89.9
32.5
49.5
65.9
-
-
-
51.0
54.7
64.8
6.1
8.3
-
2.2
2.0
3.2
Annual:
White
2.0
4.0
3.7
56.3
74.1
80.2
18.9
42.2
57.7
-
-
-
-
-
-
-
-
-
1.1
1.0
1.4
Black
0.9
0.9
1.3
43.4
60.6
63.6
12.0
22.6
22.9
-
-
-
-
-
-
-
-
-
0.7
0.7
0.6
Hispanic
2.7
2.9
2.4
58.1
72.0
80.3
21.7
37.4
45.9
-
-
-
-
-
-
-
-
-
1.2
1.2
1.9
30-Day:
White
0.7
1.5
1.3
26.6
44.1
56.9
7.7
21.6
34.7
-
-
-
16.2
24.1
31.8
8.3
11.4
-
0.5
0.5
0.7
Black
0.4
0.3
0.5
18.6
30.2
32.0
5.4
9.4
11.0
-
-
-
5.3
6.6
8.8
1.8
2.9
-
0.3
0.5
0.6
Hispanic
1.0
1.3
0.9
31.0
41.0
53.8
9.9
16.2
27.2
-
-
-
16.7
18.3
25.0
4.2
6.2
-
0.5
0.6
1.0
Daily:
White
-
-
-
0.5
1.3
3.6
0.1
0.3
0.8
12.7
23.2
32.1
7.7
14.5
20.5
2.0
3.8
-
-
-
-
Black
0.5
0.9
1.9
*
0.5
0.6
9.6
15.0
11.3
1.4
2.8
4.3
0.3
0.5
-
-
-
-
-
-
-
Hispanic
-
-
-
1.1
1.6
3.6
0.1
0.3
1.0
20.4
22.9
31.0
7.3
8.4
12.5
0.8
1.1
-
-
-
-
NOTE: '_' indicates data not available.
"Data from two years have been combined to increase subgroup sample sizes.
12th grade only: Data based on five questionnaire forms. N is five-sixths of N indicated.
ᶜ12th grade only: Data based on four questionnaire forms. N is four-sixths of N indicated.
d Only drug use which was not under a doctor's orders is included here.
e12th grade only: Data based on two questionnaire forms. N is two-sixths of N indicated.
8th and 10th grades only: Data based on one questionnaire form. N is one-half of N indicated.
PARTNERSHIP FOR A DRUG-FREE AMERICA
THE IMPACT OF ILLEGAL DRUGS
ON OUR MOST CRITICAL DOMESTIC PROBLEMS
I.
Drug abuse must remain one of the nation's top domestic priorities and requires
understanding, attention, and action from all levels of the public and private sectors. Millions
of our children, adolescents, young adults and adults are impaired by or addicted to illegal
drugs -- an individual and collective tragedy, and a problem of immense proportions. In
1992, nearly 23 million Americans used illegal drugs, 11.4 million used at least monthly, with
approximately 6 million addicted. Yet the real pervasiveness of this problem is not
immediately apparent through just the numbers or direct impact on the lives of the users and
addicts. Illegal drugs are also inextricably involved, and a significant factor, in most of our
other social issues. Aggressive action to reduce drug use and addiction is necessary to real
improvement in these other ills and the overall quality of life in America.
Drugs are a direct factor in nearly half of all homicides and violent crimes, and are
overwhelming our law enforcement, criminal justice and correctional systems. Drug dealing
has helped make our cities unsafe, and normal family and community life nearly impossible
in many urban areas.
Drugs account for the majority of the acceleration in the spread of the AIDS virus --
IV needle sharing, sexual transmission to and among women who are their sex partners, and
in pediatric AIDS among children who are born to these women.
Drugs are a health hazard, implicated as major risk factors in numerous other infectious
diseases like tuberculosis, and in trauma, mental illness, and other physiological conditions.
This also results in thousands of drug-exposed infants, higher morbidity rates, significantly
higher healthcare costs, and an over-extended healthcare system.
Drugs are a primary factor in at least half of family violence and one-third of child
abuse incidents, destroying families and throwing our child welfare system into crisis.
Violence and injury that is often related to drug abuse are responsible for three-quarters of
adolescent deaths.
Drugs in and around schools help create a climate that is destructive to teaching and
learning, and are a factor in between one-third and one-half of our alarmingly high dropout
rates. This also inhibits our ability to improve the education and training of the future
workforce.
Drugs are a primary factor among the majority of the homeless population, particularly
the "new homeless" who are increasingly young women and their children. This is placing an
enormous burden on our urban social systems.
Drugs within the workforce and workplace -- two-thirds of drug users are employed --
have a significant human and financial impact on our economic productivity, global
competitiveness, and safety on the job.
II.
Real progress has been achieved in drug abuse prevention and in understanding what
works. However, current and planned resource allocation, national leadership, and public
focus are insufficient to maintain that progress and threaten future success.
Since the mid-1980's there has been significant improvements in social attitudes towards
illegal drugs, and a dramatic decrease in the number of new triers and non-addicted users.
Importantly, however, most recent trends among young teens indicate an erosion in their key
anti-drug attitudes of risk and disapproval, resulting in higher usage rates of marijuana, LSD,
cocaine, and inhalants.
Although fewer young people are falling into addiction, what evidence we have on
addicted use and the approximately 6 million addicts suggests little progress in treating or
reducing their numbers or usage habits.
III. Prevention and treatment are effective and cost-efficient strategies for reducing illegal
drug use and addiction, and their impact on our other social problems. There is increasingly
broad consensus about what has been learned and what must now be done -- a national and
bipartisan call to action -- recognizing that each of us has a role to play in the solutions and
all of us have a stake in the outcome.
Maintaining the prevention process of denormalization is basic to long-term success. It
is critical to recognize that drug use is at its core the result of the demand we as individuals
and society create for these substances. Increasing the attitudes of perceived risk and social
disapproval is essential to preventing trial and reducing non-addicted use. The essence of
denormalization is establishing and reinforcing non-use as the behavioral standard and social
norm. The focal point of this process is at the community level -- changes in individual
attitudes and behavior supported by community consensus against drugs. More resources
need to be directed and coordinated to local public/private prevention partnerships. A
combination of effective in-school education and broad community involvement, including
parents, employers, media, law enforcement and healthcare professionals, have been shown to
significantly reduce adolescent drug use.
Greater availability, effectiveness, and access to treatment are critical to reducing the
impact of drugs on the nation. When prevention fails and the decision to use or not use drugs
is replaced by the disease of addiction, it is critical to recognize that addiction is a treatable
disease. It is estimated that the current system can treat less than one-fifth of the total
addicted population. Most critical is the lack of treatment availability for "disordered" drug
abusers, many of these within our criminal justice system. Also critically needed is more
treatment for HIV infected, pregnant and homeless drug abusers. Current treatment needs
require improvements in quality as well as quantity. More and earlier intervention is needed
by families, the judicial system, and employers to drive people into treatment.
PARTNERSHIP FOR A DRUG-FREE AMERICA
THE WRONG MESSAGE OF
LEGALIZING ILLICIT DRUGS
Any policy discussion that includes consideration of legalizing illicit drugs reflects either a
complete misunderstanding or ignorance of the key factors that affect trial and use of these
substances. Legalization sends the societal message of public approval, eroding the anti-drug
attitudes of our youth and encouraging them to try and use illegal drugs. What we need is
the reverse - establishing the unequivocal message that our public behavior standard and
social norm is "no use," continuously reinforced through the attitudes of harm/risk and social
disapproval that are proven inhibitors to our youth trying and using these substances.
First, it is critical to recognize that drug abuse is, at its core, the result of the demand we as
individuals and society create for these drugs. Prior to drug use becoming the disease of
addiction, all drug trial and use is the result of decisions/choices we make to use or not use.
The primary determinant in these decisions are the attitudes of 1) perceived harm/risk and
2) social disapproval. This is true across ethnicity, demography and geography. All progress
in reducing drug use and, ultimately, addiction, is the result of increasing anti-drug attitudes
in order to change the behavior.
The message of legalization is precisely antithetical to everything we've learned about
preventing the demand for illegal drugs. The epidemic of illegal drug use over the past three
decades was the result of these substances, their use, and their users becoming "normalized"
perceived as benign and an accepted part of normal social behavior. Normalization has led to
nearly 80 million Americans having tried illegal drugs. Because we did not understand the
impairment and harm that results from using illegal drugs, we passively and actively moved
away from the behavior standard and social norm of no-use.
The reverse process of "denormalization" that began with the death of Len Bias in 1986 has
resulted in a decline of more than 50% in the number of Americans using illicit drugs. This
fact is not well known, and probably is responsible for the much of the sense of hopelessness
and helplessness that often surrounds the issue of drug abuse. As a nation, we began to
recognize the harmfulness of drug use, and we began to re-establish the social norm of no-
use. All the declines in trial and non-addicted use of illicit drugs are directly correlated with
the increase in the attitudes of perceived harm/risk and social disapproval.
Importantly, however, most recent trends among young teens indicate an erosion in their key
anti-drug attitudes of risk and disapproval, resulting in higher usage rates of marijuana, LSD,
cocaine and inhalants. Further confusion in the behavior standard and social norm of no use,
especially consideration of legalizing (read "normalizing") illicit drugs will, surely accelerate
this disturbing trend and put us back into the drug epidemic of the 1970's and early 1980's.
12/8/93
11-08-93
10:55AM
FROM B. U. MEDICAL CENTER
TO 12126971031
F003
1993 REPORT TO THE NATION
CHAPTER I
What Are Community Coalitions Against Substance Abuse?
Almost 2,200 groups lead or sponsor community coalitions fighting substance abuse
throughout the nation. In fact, coalitions from every state responded to the Join
Together survey. (See Figure B.)
The survey reveals common characteristics
FIGURE B
WHERE CAN You FIND COMMUNITY COALITIONS?
among community coalitions that distinguish
them from other groups concerned with sub-
stance abuse. These characteristics include their
broad membership base, their leadership, and
their budgets. In addition, community coalitions
tend to address a wide variety of issues identified
by the community, commonly referred to as sys-
temwide change, rather than focusing their work
on a single area, and these groups are more likely
to focus on changing community environments
than on addressing individual needs.
Who Participates in Coalitions?
Current Membership: Membership is an
important measure of a coalition's legitimacy.
A coalition with sustained participation by its
members is probably doing a good job. On the other hand, a coalition that is not meet-
ing its goals quickly loses support from groups and individuals. Broad participation is
Over 100
also essential to carrying out programs that involve multiple agencies.
81-100
The membership of almost all coalitions include local schools (90%), law enforcement
61-80
agencies (85%), and alcohol and drug prevention agencies (76%). More than half the
41-60
coalitions named other major local institutions, such as direct service agencies that help
people with alcohol and drug problems, as playing a role in their work. Seventy percent
21-40
of respondents said treatment providers participate and more than 50% of coalitions
Under 21
include governmental health and human service agencies. Figure C on the next page
shows the percent of groups involved in coalitions.
N=2196, 1992-1993
Potential Membership: The survey reveals that not all institutions that are members
of community coalitions take an active role in the coalition's work. (See the ratings
coalition leaders give major institutions in Chapter 4.) Even active participation by
some business people or clergy does not mean that the entire business or religious
community has been mobilized. Nevertheless, it does mean that key footholds have
been established.
11-08-93 10:55AM
FROM B. U. MEDICAL CENTER
TO 12126971031
P004
1993 REPORT TO THE NATION
FIGURE c
PARTICIPATION IN
%
COALITIONS
Schools
90
Law enforcement
85
Prevention providers
76
over 75%
Parents
72
Volunteers
71
Treatment providers
70
Local government
67
Youth
64
Private business
63
over 50%
Government - human services
02
Courts/probation
61
Religious organizations
61
Government - health services
56
Recovering people
55
Other concerned citizens
54
Private health services
48
Private human services
43
Universities
42
Mass media
41
Child protective services
40
Affected populations
38
over 30%
Recreation departments
36
Civic/fraternal organizations
34
Housing
31
Citizen action groups
29
Public assisstance
19
Employment services
17
Organized labor
14
Alcohol beverage control
13
over 10%
Transportation
9
Alcohol industry
8
Other
8
N=2196, 1992-93
25
50
75
100%
While many key groups actively participate in coalitions' efforts to reduce substance
abuse problems, there are a number of institutions that are not yet doing their part in a
majority of communities. (Figure D shows which groups increased their participation in
coalitions from 1992 to 1993.) The survey shows that each coalition needs to identify the
groups that are missing from its membership and then develop ways to involve them in
the coalition's efforts. Meeting this challenge requires coalition members to find some
mutual benefit to attract additional organizations to participate.
The following are specific groups many coalitions still need as part of their membership
base:
Media: Increasing public awareness about substance abuse and possible communitywide
solutions is key to any coalition's comprehensive strategy. News, advertising, and
programming policies strongly affect a community's capacity to address substance abuse
issues. The survey revealed that local media leaders and organizations participate in fewer
than half (41%) of the nation's coalitions. When these key groups are present, coalitions
11-08-93
10:55AM
FROM B. U. MEDICAL CENTER
TO 12126971031
P005
1993 REPORT TO THE NATION
%
FIGURE D
Citizen action groups 32
GROUPS THAT
Other 21
INCREASED
Organized labor 14
PARTICIPATION
Employment services 13
Alcohol industry 13
Housing 13
Alcohol beverage control 13
Recreation departments 12
Affected populations 12
Private human services 11
Civic/fraternal organizations 10
Youth 10
Private health services 10
Other concerned citizens 10
Universities 9
Recovering people 9
Public assisstance 9
Parents 9
Child protective services 8
Religious organizations 8
Mass media 8
Transportation 7
Government human services 7
Courts/probation 7
Private business 7
Volunteers 6
Treatment providers 6
Prevention providers 5
Government health services 5
Local government 4
Law enforcement 4
Schools 3
N=1069, followed 1992 and 1993
10
20
30%
have a much easier time developing and implementing
effective public awareness programs.
How THE MEDIA INCREASED
ONE GROUP'S EFFECTIVENESS
Child Protection Agencies: A hotly contested issue
in many communities is whether parents in treatment
S
trong media support has helped the Fighting Back coalition
should retain custody of their children. Because the
in Santa Barbara, CA, to be successful. The chairman of the
threat of losing custody of a child discourages many
coalition is the publisher of the Santa Barbara News Press. And
parents from seeking treatment, public agencies and
the general manager of the television station is an active
community coalitions need to provide the resources
member of the group. With their help, the group launched a
and support to help parents with substance abuse
media campaign to educate residents about alcohol problems.
problems obtain treatment without concern of a cus-
The media's commitment resulted in weekly television and
tody battle. However, because child protective service
newspaper features about growing alcohol abuse and directed
agencies participate in fewer than half the coalitions,
residents to sources of help. This sustained media coverage has
their absence from the coalition table makes it more
lasted over two years and would not have been possible
difficult to work out a local solution to this issue.
without this media leadership in the coalition,
of
d
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P002
1993 REPORT TO THE NATION
FIGURE A
SURVEY RESPONDENTS
RESPONDENTS BY YEAR
Responded only
Responded only
Responded
TOTAL
in 1992
in 1993
in 1992 and 1993
Lead a coalition
515 (28%)
612 (41%)
1069 (48%)
2196 (40%)
Participate in a coalition
867 (47%)
557 (38%)
819 (37%)
2243 (40%)
Do not lead or
participate in a coalition
460 (25%)
304 (21%)
326 (15%)
1090 (20%)
TOTAL 1842
1473
2214
5529
includes 2,196 respondents that answered our survey by May of 1993. (See Figure A.)
Join Together decided to focus only on this segment of lead agencies because these are
the groups that carry out coalitions' activities throughout their communities. Any
references in the report to the full 5,500 respondents are clearly indicated. See the
Appendix for information about how the survey was conducted.
O
Clinton Presidential Records
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PARTNERSHIP FOR A DRUG-FREE AMERICA
JAMES E. BURKE
Drugs
The Problem is Demand
HAVE BEEN WORKING on the ille-
I
gal drug problem for the last four and a
half years. It's a very complex problem,
and depending upon how you look at it, you
come out with a different set of answers. I
admit having a bias: I have believed from the
beginning and believe now more than ever
that this is basically a marketing problem. It
is driven by demand not by supply. That's an
overstatement to be sure, but I believe the most
important thing we can do is to move toward
changing attitudes and in turn changing
behavior, so that we can dry up the demand.¹
I am going to give you a fairly hopeful pre-
sentation. I think I can demonstrate to you
that we do know what works; we know why
it works; and we know what to do to accel-
erate the process of turning off illegal drugs
THE PROCESS
that has, blessedly, already begun.
OF TURNING
The worst metaphor we ever created was
OFF ILLEGAL
"The War Against Drugs." The reason it's a
DRUGS HAS.
bad metaphor is it gets everybody's head turned
BLESSEDLY.
in the wrong direction. It turns drugs into a
law and order and an interdiction problem,
ALREADY
and while those are very important aspects
BEGUN.
of the problem, the really important part of
this problem is demand.
Good News and Bad News
What do I mean when I say America is turn-
ing off drugs? The NIDA (National Institute
on Drug Abuse) 1991 household survey (see
Figure 1) shows that 75 million Americans
have used illicit drugs-which is an under-
count, probably by 5 million. That means 80
I Europe and Asia don't share the same kind of problem
that we have here, but the U.S. Drug Enforcement Agency
believes the supply lines are changing-and changing
quite dramatically-to the Far East as well as to Europe. I
don't know enough to be sure, but I think it is possible
that those of you from Europe and East Asia may be at the
same place this country was in the late '70s.
1993 WASHINGTON MEETING
THE TRILATERAL COMMISSION
25
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SERVICES
DEPARTMENT OF HEALTH & HUMAN SERVICES
Health Care Financing Administration
/
The Administrator
Washington, D.C. 20201
APR 21 1994
The Honorable Bill K. Brewster
House of Representatives
Washington, D.C. 20515
Dear Mr. Brewster:
I am responding to your letter to Mrs. Clinton regarding payment
to pharmacists under the proposed Medicare outpatient
prescription drug benefit contained in the Health Security Act
(HSA). You raised issues in your letter regarding (1) the data
utilized to calculate the 90th percentile of actual charges,
payment limit, (2) the inclusion of a definition of actual
charges and (3) the extension of the Omnibus Budget
Reconciliation Act of 1990's moratorium on reductions in payment
to pharmacists.
In regard to your first issue of the 90th percentile payment
limit, we currently are reexamining this policy. As you may be
aware, this provision was part of the payment methodology under
the Medicare Catastrophic Coverage Act (MCCA) of 1988. However,
unlike MCCA, the drug benefit proposed under HSA would require
manufacturers to pay rebates to Medicare. Thus, the 90th
percentile payment limit may not be necessary for cost
containment purposes under HSA.
Regardless of the merits of the 90th percentile payment limit,
the alternative update policy you propose would impact the
calculation of all payment limits, including the calculation of
estimated acquisition costs. Your proposal would provide updates
on a daily basis, while the HSA would update payment limits every
6 months.
As you may be aware, although Medicare providers face price
increases from suppliers throughout the year, Medicare rates are
updated on an annual basis. Thus, we believe that the 6 month
update policy proposed in HSA is a significant accommodation to
pharmacists. Updates on a schedule more frequent than proposed
would have implications for Medicare beyond pharmacists. In
addition, we believe it would be administratively difficult to
update national limits on a daily basis given the anticipated
volume of one billion prescriptions per year and the use of
multiple carriers to process claims.
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Finally, it is not clear that such a policy is necessary to
protect pharmacists from significant price increases. We
believe that the proposed rebate program would significantly
constrain the level of price increases from manufacturers to
pharmacists. To the extent that manufacturers increase their
prices beyond the rate of inflation, as indicated by the Consumer
Price Index, they would have to rebate to Medicare the resulting
marginal revenues derived from sales to Medicare beneficiaries.
In regard to your second issue on actual charges, we do not
believe it is necessary to include a statutory definition of
actual charges under the proposed Medicare drug benefit. Unlike
some third-party payors, Medicare's carriers uniformly interpret
the term "actual charges" when determining payments to physicians
and suppliers. The carriers do not calculate actual charges,
instead the carrier simply recognizes the actual charge as the
amount a physician or supplier actually bills the beneficiary for
a particular service or supply.
As to the OBRA 90 moratorium, an extension of the provision
raises both policy and budget implications.
States have reported that the moratorium requires them to pay
pharmacists a fixed payment amount despite the fact that
ingredient costs for certain prescription drugs have been
dramatically reduced due to changing market conditions. For
example, when generic products become available, ingredient
costs for the brand name drug may decrease significantly.
Because of the moratorium, state Medicaid programs would be
required to pay the pharmacist the higher ingredient cost
established at the time the moratorium became effective.
As you are aware an extension of the moratorium was not
proposed in the President's budget and the Medicaid baseline
includes some slight savings from the expiration of the
moratorium.
Clearly the weight one would put on the various policy
considerations related to the moratorium would have to be
evaluated in the context of the many aspects of a comprehensive
health care reform package.
I hope this information has been helpful. I look forward to
continuing to work with you as the President's health care reform
proposal moves through Congress.
Sincerely,
Sma Bmaclell cellel
Bruce C. Vladeck
Administrator
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BILL K. BREWSTER
12.3
DISTRICT OFFICES:
39 DISTRICT
232 POST Cares BUILDURE
DELAMONE
P.O. Box 1607
ways AND MEANS
age, OK 74820
COMMITTEE
(188) 426-1989
101 wser Main ETHLET
WASHINGTON OFFICE
MEMBIL or 73401
1727 House OFFICE BURBING
(603) 126-6300
WASHINGTON. be 20816-3003
(208) 223-4548
Congress of the United States
118 CARL ALOUNT FEDERAL BUILDING
MASLESTER. or 94501
Douse of Representatives
1918) 423-9881
123 W. TM AVENUE, NUM zus
STILLIVATER or 74074
lawbington, DC 20515-3803
(405) 742-1400
February 10, 1994
Mrs. Hillary Redham Clinten
Office of the First Lady
1600 Pennsylvania Avenue, N.W.
Washington, D.C. 20500
Dear Mrs. Clinton:
AB a member of the Ways and Means Committee, which will play an
active role in health care reform, I am writing to seek
clarification on several sections of the Health security Act
pertaining to the pharmacy services benefit; particularly the
proposed Medicare Outpatient Prescription Drug Benefit and the
existing OBRA '90 moratorium on reducing pharmacy reimbursement
that is due to expire on December 31, 1994.
second Previous Payment Period
A concern with the current Health Security Act language in both 5.
1757 and Hr. 3600. is that a payment limit to pharmacy providers
for govered outpatient drugs under Medicare unnecessarily uses data
12 to 18 months old to calculate the reimbursement rate for the
drug dispensed. As you know, the prices of prescription drugs can
increase significantly during 12-18 months, which will result in
substantially underpaying the pharmacy. Since drug pricing date
is routinely updated daily, I suggest the use of data no more than
30 days old, which was supported by Senator Pryor in the
Prescription Drug Prudent Purchasing Act of 1990.
The legislative language can be found in Title II, Subtitle À of
both bills, Specifically, it reads:
"In the case of a covered outpatient drug that is s multiple source
drug which had e restrictive prescription, or that is s single
source drug, the payment limit for a calculation period is equal
to-
(i)
the 90th percentile of the actual charges (computed on
the geographic basis specified by the Secretary) for
the drug product for the second previous payment
calculation period'
Page 362 (C), Payment Calvulation Period
"The term payment calculation period' means the 6-month period
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VV2
beginning with January of each year and the 6-month period
beginning with July of each year."
The language should be changed to state:
In the case of a covered outpatient drug that is s multiple source
drug which has a restrictive prescription, 05 that is a single
source drug, the payment limit for 8 calculation period is equal
to-
(i) the 90th percentile of the actual charges (computed on s
geographical basis specified by the secretary) for the drug product
for the payment calculation period.
page 361 (c) payment Calculation Period
The tarm Hearment calculation period" means the RELSO 30-days REior
to the dispensing AF the prescription.
Reimbursement rates should reflect a rolling 20-dey price.
Electronic claims management systems available and rully
operational today, and called for in the Medicare outpationt
Prescription Drug Benefit, can be used to calculate the proper
reimbursement to the pharmacy providers using very recent data.
The following are three examples of the difference in the drug
product price that would be used in making a reimbursement
determination under the current language " compared to the
proposed version:
Drug Dispensed in
Reimbursement
Reimbursement
December 1903
Determination Based
Determination
on Product Costs of
Under New
Drug in July 1993
Language
Tagament
8 77.90
$ 85.25
Nythrin
$103.80
$113.23
Kevacor
$110,51
$119.79
Definition at Astual charge
Again. in the language of ehe Health Security Act relating to the
Medicare Outpatient Prescription Drug Benefit, the product
reimbursement formula makes reference to the "actual charges" for
the prescription (aee citation earlier in this letter). while the
term actual charges may be one frequently used in health care
contracts, it has become a source of serious contention to
community rotail pharmacies and the third party programs 1n which
they participate. payers, with increasing and troubling frequency
are assigning to this seemingly solf explanatory term new and
creative meanings which materially impact the payment to the
dispensing pharmacy.
To preempt any potential disagreement on the definition of this
cerm under the Medicare program, I respectfully ask your
consideration of the inclusion of a definition of "aotual charge".
I propose the following:
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Dage 361 (D) Actual Charge
The term actual charge shall mean the usual and sustomary price
for a prescription that includes cost of goods, dispensing fee,
and an administrative charge to provide pharmacy gervices. These
charges may vary depending on Volume, and cognitive and
administrative services performed.
OBRA '90 Meratorium
Secondly, and equally important, is the pharmacy profession's need
to seek an extension OI the OBRA '90 moratorium on further
reduction in pharmacy reimbursement until a health care reform
package is passed and implemented. OBRA '90 (Public Law No. 103-
55 as amended) under the section entitled, "Treatment of Pharmacy
Limite" states:
During the period beginning on January I, 1991 and ending on
December 32, 1994 (A) . state may not reduce the payment limits
established by a regulation under this title or any limitation
described in paragraph (3) with respect to the ingredient oost of
a covered outpatient drug or the dispensing fee for such 2 drug
below the limits in effect as or January 1. 1991.
Congress included the moratorium on reducing pharmacy Medicaid
reimbursement in OBRA'90 to proteot community retail pharmacies
from further inequitable payment outs indiscriminately made by
either HCFA or the individual states. In response to the continued
increase in prescription drug prices, the two previous
Administrations through HOPA and many state Medicaid agencies had
previously implemented cuts to reduce community retail pharmacy
reimbursement without any consideration of whether the resulting
reimbursement was even adequate to cover the pharmacies' costs,
During the extensive debate on prescription drug prices that
preceded OBRA 190, Congress acknowledged that it was not community
retail pharmacy that was driving up prescription prices and
included the moratorium to protect pharmacy until December 30,
1994. Congress also required in OBRA '90 that HCFA perform & study
on the adequacy of pharmacy Medicaid reimbursement, which could be
used, if necessary, to formulate a new and more equitable Medicaid
pharmacy reimbursement mathodology. HCFA has indicated to us that
the report to Congress on the results of the study are not expected
to be available until March, 1994 at the earliest.
In light of the impending results of the OBRA '90 study on ine
adequacy of community retail pharmacy Medicaid reimbursement, I an
requesting your support in amending the Health Security Act to
extend the moratorium through the establishment of the approved
state plans, at which time Medicaid prescription programs transfer
to the jurisdiction of health elliances. This extension of
existing law would allow for a reasonable transition from the
current Medicaid programs into 8 reformed health care system. Ie
will also allow time for interested parties to review and react to
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the HCFA study results and the report to Congress.
Your response on these issues will be greatly appreciated as we
mutually seek to meet our goal of meaningful health care reform.
sincerely,
Bill K. Brewster
Bill K. Brewster
Member of Congress
BB/in
CC: Ira Magaziner
Chris Jennings
Clinton Presidential Records
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marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a publication.
Publications have not been scanned in their entirety for the purpose
of digitization. To see the full publication please search online or
visit the Clinton Presidential Library's Research Room.
OCUS
News for Lilly Associates Worldwide
Vol. 3 No. 2 March 1995
Lilly Development Centre
at Mont-Saint-Guibert
Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a publication.
Publications have not been scanned in their entirety for the purpose
of digitization. To see the full publication please search online or
visit the Clinton Presidential Library's Research Room.
CLOSER TO THE CUSTOMER
S
D
L
E
S
T
1
I
V
H
L
ELI LILLY AND COMPANY
1994 ANNUAL REPORT TO Shareholders
Lilly