Leavitt Reiterates Opposition to Drug Price Negotiations

HHS Secretary Mike Leavitt on Monday reiterated the Bush administration's opposition to legislation that would authorize the federal government to negotiate with pharmaceutical companies under the Medicare prescription drug benefit, the AP/Washington Post reports.

Leavitt said, "The idea of the government negotiating drug prices really isn't about the government negotiating drug prices. It's a surrogate for a much larger issue, which is really government-run health care" (Freking, AP/Washington Post, 11/14). He continued, "To negotiate drug prices or anything else, you have to have leverage."

Leavitt added, "Leverage in the context of drugs is the ability to withdraw access to that drug, hence encouraging people to lower their price. If the government's the one doing that, you have government-run health care" (Reichard, CQ HealthBeat, 11/13).

House Minority Leader Nancy Pelosi (D-Calif.), who is expected to become House speaker, has said that Democrats will quickly act to pass legislation authorizing Medicare to negotiate with pharmaceutical companies under the drug benefit.

Pelosi spokesperson Brendan Daly said, "We want to work with Republicans on health care as well as other issues, but misleading rhetoric about 'government-run health care' does not help. ... Democrats are proposing common-sense improvements to the complex Bush prescription drug program."

Pelosi said, "Requiring the federal government to negotiate on behalf of seniors would generate significant savings, savings which could be used to close the gap in coverage -- or 'doughnut hole' -- that threatens millions of Medicare beneficiaries this year" (AP/Washington Post, 11/14).

Leavitt also said that the Bush administration's health care goals could be implemented without congressional action.

The administration's plan would require health care providers that do business with the federal government to measure quality of care and to adopt health care information technology systems that meet federal interoperability standards. The plan also would require providers that conduct business with the government to organize claims in a way that allows comparison of quality of treatment for "episodes of care." In addition, insurers would be required to develop incentives for consumers to choose higher-quality plans and for providers to improve quality of care.

Leavitt said he plans to meet with representatives of 250 major employers at a conference on Friday to discuss ways to implement the plan (CQ HealthBeat, 11/13).

In related news, Sen. Hillary Rodham Clinton (D-N.Y.) on Monday in comments to the Association for a Better New York said that Democrats in the 110th Congress will focus on improving quality and affordability in the U.S. health care system. "Health care is coming back," Rodham Clinton said, adding, "It may be a bad dream for some" (Fouhy, AP/Seattle Post-Intelligencer, 11/13).

Leavitt "says he does not want the power to negotiate drug prices for Medicare beneficiaries, but Democrats should give it to him anyway," a New York Times editorial states. The "most appeal[ing]" approach to negotiation would be one that directs Leavitt "to set up one or more government-operated drug plans to compete with the private plans," the editorial states.

According to the editorial, this "could be started while the new Congress holds hearings to examine broader possibilities." The editorial notes that some experts have expressed concerns that "the government would not press manufacturers hard, because of the lobbying clout of the pharmaceutical industry and of Medicare beneficiaries seeking access to the newest (and most expensive) medicines."

However, according to the editorial, "[r]ight now, private plans are not doing all that well at obtaining discounts for their clients." Although Bush "might be inclined to veto any bill that tried to insert the government into prices negotiations, ... if presented with a bill to set up government-operated drug plans to go head to head with the private plans, he would have to explain why he is afraid of a real market competition," the Times concludes (New York Times, 11/14).