House To Vote on Drug Price Negotiations Bill
House Democrats this week plan to seek passage of a bill (HR 4) that would require the HHS secretary to negotiate directly with pharmaceutical companies on prices for medications under the Medicare prescription drug benefit, the Miami Herald reports.
The legislation, sponsored by House Ways and Means Committee Chair Charles Rangel (D-N.Y.) and Rep. John Dingell (D-Mich.), would require the HHS secretary to report to Congress on the progress of the negotiations every six months (Pugh, Miami Herald, 1/8). In addition, the bill would not allow the HHS secretary to establish a formulary under the Medicare prescription drug benefit to help negotiate lower prices for medications.
The House likely will vote on the legislation on Friday, but the Senate "is expected to move more slowly," the Los Angeles Times reports (Alonso-Zaldivar, Los Angeles Times, 1/6).
The Senate Finance Committee on Thursday plans to hold a hearing on the legislation.
Meanwhile, Senate Majority Leader Harry Reid (D-Nev.) "has introduced a placeholder bill (S 3) that is intended only to show that Democrats want to 'provide for fair prescription drug prices for Medicare beneficiaries,'" CQ Today reports (Reichard, CQ Today, 1/5).
Some critics maintain that the provision in the bill that would not allow the HHS secretary to establish a formulary would take "away a powerful lever commonly used in such pricing negotiations," the Los Angeles Times reports.
Robert Laszewski, a consultant to health insurers and other health care companies, said, "If you don't have the power to bump a drug off the formulary, you have no negotiating clout. Any good capitalist will tell you that you can't negotiate with somebody unless there is the expectation that you may not purchase their product" (Los Angeles Times, 1/6).
Alan Garber, director of the Center for Health Policy at Stanford University, said, "To obtain drugs at low prices, a purchaser must be able to say no to covering a particular drug" (Pear, New York Times, 1/7).
An unnamed House Democratic leadership aide said that the provision is a "trade-off" because Democrats "felt we couldn't go as far" as the Department of Veterans Affairs, "where they actually take drugs off the formulary."
AARP Federal Affairs Director David Certner said of the bill, which the group supports, "It takes one tool away, but that's not the whole story here." According to Certner, under the legislation the HHS secretary would have the ability to increase copayments for medications manufactured by pharmaceutical companies that do not agree to lower prices.
Ron Pollack -- executive director of Families USA, which supports the bill -- said, "If that provision wasn't in there, the drug companies would probably be going nuts." He added that the provision "makes it politically palatable without harming the intent of giving the (administration) the obligation to bargain" (Los Angeles Times, 1/6).
In related news, a number of experts have said that savings from the legislation would not eliminate the so-called "doughnut hole" coverage gap in the Medicare prescription drug benefit. The Congressional Budget Office has estimated that the elimination of the doughnut hole would cost $450 billion over 10 years but has not estimated savings from the bill.
Brendan Daly, a spokesperson for House Speaker Nancy Pelosi (D-Calif.), said, "We're hoping to get some savings, obviously, from the price negotiation, and then we can try to use some of that to start to close the doughnut hole." Daly added, "I don't think we're going to have enough to close it entirely" (Lee, Washington Post, 1/7).
In other congressional news, lobbyists and supporters maintain that bills to expand access to mental health services might "stand a better chance of passing" in the 110th Congress, USA Today reports. Supporters seek to pass mental health parity legislation, which would require health insurers to provide the same level of coverage for treatment of mental illnesses as they offer for physical illnesses.
Sen. Pete Domenici (R-N.M.), who has introduced three previous mental health parity bills, said, "Now our prospects are the best that they've ever been."
According to USA Today, other mental health bills "on the radar" include legislation that would provide funds to help Hurricane Katrina survivors with mental illnesses and help states establish programs to allow children with serious mental illnesses to live with their families during treatment.
In addition, legislation to reauthorize the SCHIP program could include improved mental health coverage for children, according to Andrew Sperling of the National Alliance on Mental Illness (Elias, USA Today, 1/8).