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Industry clout reflected in vote

WASHINGTON - Senators rebuffed an attempt to squeeze more money from the drug industry Thursday after two Democrats warned it would undermine the fragile political coalition pushing a sweeping health care overhaul.

The Senate Finance Committee voted 13-10 to reject an amendment that would have required the industry to rebate $106 billion over 10 years to the government for medications used by low-income Medicare beneficiaries. Three Democrats, Bob Menendez of New Jersey, Tom Carper of Delaware, and Chairman Max Baucus joined Republicans in voting against the proposal.

Minutes earlier, Menendez and Carper warned that approval of the amendment could undermine support for the overall legislation. Not only are pharmaceutical companies major employers in their states, but the industry is also a leading backer of overhauling the health care system this year. The vote reflected the industry's clout.

The author of the amendment, Sen. Bill Nelson, D-Fla., had wanted to use the money to close the coverage gap in the Medicare prescription benefit - long a policy goal for Democrats. But would have been on top of $80 billion in reduced fees the industry already agreed to in a deal with the White House and Finance Chairman Max Baucus. Senators said the White House lobbied against Nelson's amendment.

Carper said after the vote that the drug companies had not said they would have abandoned the deal if the amendment passed. But he added: 'I know I would ... I'd say, 'Take a hike.'"

Menendez told senators during debate that Nelson's amendment 'may very well undermine the essence of this agreement' and 'put us in a position that makes it very difficult to move forward.'

As senators began their third day of slow-moving deliberations, benefits for seniors on Medicare - and their costs - emerged as a flashpoint.

The committee voted 13-10 along party lines to reject an amendment by Sen. Orrin Hatch, R-Utah, that would have delayed coverage for the uninsured if a million or more people who now have insurance wound up having to pay higher premiums as a result of the legislation.

Hatch said his amendment was intended to protect seniors who signed up for private insurance plans through Medicare and could lose some benefits as a result of cuts to the commercial plans. About 10 million seniors are now signed up through the private plans, about one-fourth of Medicare recipients. The 'Medicare Advantage' plans can offer enhanced benefits because the government pays them more than it costs to care for seniors in traditional Medicare.

More amendments on the issue are expected, including a Democratic alternative from Nelson that would shield seniors currently in private plans from the cuts.

With polls showing seniors are skeptical about Obama's call for legislation, Democrats said the bill included numerous provisions to enhance benefits under Medicare, and Baucus said it would improve the solvency of the financially strained Medicare trust fund.