Democrats Divided Over Drug Price Negotiations
Democratic lawmakers are "struggling" to keep promises made on the campaign trail to have the federal government negotiate drug prices under the Medicare prescription drug benefit, the Washington Post reports. Recent polls indicate that about 80% of Medicare Part D beneficiaries are satisfied with their plans, and the cost of the program has been lower than expected.
Democrats will have to seek reforms "without wrecking a program that has proven cheaper and more popular than anyone imagined," the Post reports (Montgomery/Lee, Washington Post, 11/26). House staffers have said that Democrats do not have a firm plan for reforming the program and have predicted that hearings will be held to consider different options (Zhang, Wall Street Journal, 11/24).
The Post reports that ideas under consideration "range from simply repealing the ban on negotiations -- which would accomplish little if [HHS] refuses to negotiate -- to creating a separate, government-run Medicare drug program with strong negotiating power" (Washington Post, 11/26).
Sen. Richard Durbin (D-Ill.) and incoming House Ways and Means Health Subcommittee Chair Pete Stark (D-Calif.) reportedly favor the creation of a government-run plan that negotiates drug prices and competes directly with private drug plans (Wall Street Journal, 11/24).
A Medicare-run plan would encourage "private plans to bargain harder for lower prices," the Los Angeles Times reports (Alonso-Zaldivar, Los Angeles Times, 11/26).
Stark also has said he favors the idea of having Medicare set a price ceiling from which private insurers could negotiate downward (Washington Post, 11/26).
"Another approach Democrats could try would be requiring drug makers to give Medicare beneficiaries their lowest price, as companies must for Medicaid," or they "could push Medicare to copy the Department of Veterans Affairs, which maintains a formulary ... of approved drugs that are a part of its veterans health program," according to the Journal (Wall Street Journal, 11/24).
Incoming Senate Finance Committee Chair Max Baucus (D-Mont.) "is cool to the idea of government negotiation" and has agreed only to hold hearings on the issue, the Post reports (Washington Post, 11/26).
According to many Republicans, giving government the power to negotiate with drug makers "could be tantamount to price controls and ... could discourage development of drugs and, ultimately, give seniors fewer drug choices," the Journal reports.
Former HHS Secretary Tommy Thompson said the program is "working better than ... I thought possible. Why change something that's working?" (Wall Street Journal, 11/24).
Pharmaceutical companies, hoping to prevent change to the Medicare law, "have been recruiting Democratic lobbyists, lining up allies in the Bush administration and Congress, and renewing ties with organizations of patients who depend on brand-name drugs," the New York Times reports.
Pharmaceutical Research and Manufacturers of America President and CEO Billy Tauzin said, "We have new political realities to attend to. We and our allies will do everything we can to defend the Medicare drug benefit, to get out the message that it is working."
The industry also is preparing for other Democratic bills that would increase regulation of drug safety, encourage the development of generic biotechnology drugs and allow prescription drug reimportation from Canada, as well as investigations of drug industry profits, direct-to-consumer advertising and off-label marketing.
PhRMA Senior Vice President Ken Johnson said, "It's all hands on deck. It's like a hurricane warning flag. You don't know where it will hit. You don't know who will be affected. But everybody has to be prepared" (Pear, New York Times, 11/24).
In related news, the AP/Baltimore Sun reports that legislation to allow the reimportation of prescription drugs from Canada "is not at the top of Democratic leadership's list of priorities" but remains a leading issue for some members.
Sens. Bill Nelson (D-Fla.) and David Vitter (R-La.), co-authors of a recent reimportation bill, will continue to press the issue. Sen. Byron Dorgan (D-N.D.), who has introduced reimportation legislation with Sen. Olympia Snowe (R-Maine), said, "The pressure is not to tell people you have to go outside this country to buy prescription drugs. The pressure is to force the pharmaceutical companies to reprice their drugs in the U.S."
Johnson of PhRMA said, "I don't think there's any question there will be renewed attempts to pass reimportation legislation in the new Congress" (AP/Baltimore Sun, 11/24).
In other news, incoming House Energy and Commerce Committee Chair John Dingell (D-Mich.) on Sunday said his panel will hold investigative hearings on a number of issues, including Medicare (New York Daily News, 11/27). Dingell said regarding Medicare, there "are lots and lots of scandals" (AP/Baltimore Sun, 11/27).
Government Accountability Office Comptroller David Walker earlier this month sent congressional leaders a list of 36 topics, including Medicare, to consider for investigation and oversight hearings. Walker said the list was meant to give Congress "a jump-start on your planning."
Walker in the letter said that most of the government's policies and programs "are based on conditions that existed decades ago" and suggested that it is now time for "a fundamental review, reprioritization and re-engineering of the base of government." Walker added, "We cannot afford to continue business as usual in Washington, given our current deficit and growing long-term fiscal challenges" (Barr, Washington Post, 11/27).
The New York Times on Monday profiled CMS Center for Beneficiary Choices Director Abby Block, who "solved many problems" encountered during the first weeks of the Medicare drug benefit. "If Congress directs Medicare to negotiate with drug companies and seek lower drug prices, pharmaceutical executives could find themselves dealing with Ms. Block, as insurers already do," the Times reports (Pear, New York Times, 11/27).
Boston Globe: The new Congress should "mandate the creation of a government drug-purchasing plan for Medicare that could compete with existing private plans and give beneficiaries a choice," a Globe editorial states. "Many Democrats campaigned in favor of granting Medicare the power to negotiate drug prices," but "that action would have just symbolic value if the bill is enacted but Medicare chooses not to use the price-bargaining authority," the editorial states. "That is why Congress should actually require the creation of at least one government drug-purchasing plan for Medicare," according to the editorial (Boston Globe, 11/27).
- Mike King, Atlanta Journal-Constitution: "Democrats understand that the mere threat of revoking the ban on drug negotiation may intimidate the pharmaceutical industry into keeping prices low -- at least for a while," King, a member of the Journal-Constitution editorial board, writes in an opinion piece. But Democrats "may need to make that threat reality if the private insurance market and the pharmaceutical industry are not up to the task of making prescription drug coverage accessible and affordable," King writes, adding, "By revoking the ban, the government would be in a better position to ensure coverage of a select group of costly brand-name drugs that might not be otherwise available, or affordable, through the private plans" (King, Atlanta Journal-Constitution, 11/27).
CBS' "Face the Nation" on Sunday included an interview with Senators-elect Sherrod Brown (D-Ohio), Bob Corker (R-Tenn.), and Claire McCaskill (D-Mo.), about several issues, including plans to allow Medicare to negotiate prescription drug prices (Borger, "Face the Nation," CBS, 11/26). Video of the segment is available online.
In addition, KQED's "Forum" on Monday in the first hour of the program is scheduled to include a discussion of proposals to allow the federal government to negotiate prescription drug prices. Guests on the program are scheduled to include Alain Enthoven, professor of public and private management at Sanford University, and Rep. Pete Stark (D-Calif.), who is expected to become chair of the House Ways and Means Subcommittee on Health (Krasny, "Forum," KQED, 11/27). Audio of the segment will be available online after the broadcast.