Senate Bill To Authorize Medicare Prescription Drug Price Negotiation Has Votes Required To Pass
Sen. Ron Wyden (D-Ore.) on Tuesday said he has garnered enough votes in the Senate to pass legislation that would authorize the HHS secretary to negotiate lower drug prices for Medicare directly with pharmaceutical companies, the AP/Las Vegas Sun reports.
Wyden and Sen. Olympia Snowe (R-Maine) co-sponsored an amendment in March that would have changed the 2003 Medicare law to give the HHS secretary such power, but the legislation failed by two votes during Senate budget deliberations in March. The Medicare law specifically prohibits federal officials from intervening in negotiations between Medicare beneficiaries and hospitals, pharmaceutical companies, wholesalers and suppliers.
Wyden on Tuesday did not identify the senators who might have changed their votes since March but said the legislation now has sufficient support. He added, "We're looking for the right vehicle to get this important provision into law and get some cost-containment into the Medicare benefit" (Daly, AP/Las Vegas Sun, 9/27).
Sen. Richard Durbin (D-Ill.) said he does not plan to attach the provision to legislation that would provide assistance for hurricane relief efforts because doing so could slow the package down (CQ HealthBeat, 9/27).
According to the AP/Sun, "Even if the measure passes the Senate, it is unlikely to become law" because it faces strong opposition from the Bush administration, Republican leaders and the pharmaceutical industry (AP/Las Vegas Sun, 9/27). Critics of the plan say it would force prescription drug pricing down to the point at which it could eliminate incentives for pharmaceutical companies to develop new drugs.
Ken Johnson, a senior vice president at the Pharmaceutical Research and Manufacturers of America, said that giving the HHS secretary authorization to negotiate directly with pharmaceutical companies "won't lower drug costs," adding, "The system was set up so that robust competition among private companies would drive prices down. More competition equals lower prices -- it is simple economics."
The Pharmaceutical Care Management Association added that the plan would result in a large cost-shift to the private sector.
Wyden made his announcement at a Tuesday briefing by Families USA to release a report comparing drug prices negotiated by the Department of Veterans Affairs with those available under the Medicare prescription drug discount card program (CQ HealthBeat, 9/27).
According to the report, the average price for a year's supply of a prescription drug was $220 higher for people using the Medicare drug discount card than for members of a VA health plan. The report also found that Medicare beneficiaries using the Medicare discount drug cards paid more for 49 of the 50 most frequently used drugs by senior citizens than they would have through the VA drug plan. The discount cards have been used for about 18 months and will be replaced on Jan. 1, 2006, when the Medicare prescription drug benefit takes effect (California Healthline, 9/27).
According to the Boston Globe, the report "has reignited debate" over whether the new Medicare drug benefit "favors big pharmaceutical companies."
Families USA Executive Director Ron Pollack said, "The reason we compared the drug cards with the VA is it's the best example of what can be achieved when a public agency negotiates to get cheaper pricing. It's that kind of negotiation that the pharmaceutical lobby and others who profit from the current, Balkanized system object to." He added that even with discounted prices through Medicare negotiations, the pharmaceutical industry would remain "one of the most profitable" in the U.S.
PhRMA responded that Pollack is using "scare tactics" to undermine the new Medicare drug benefit. "It's a shameless publicity stunt," Johnson said. Pollack said he is not trying to undermine the new benefit but to make sure it is "cost effective." He said, "In the next few weeks, we'll issue a new analysis that looks at the prices secured through these private plans and how they stack up to the VA prices."
CMS spokesperson Gary Karr said that authorizing the HHS secretary to negotiate with pharmaceutical companies would not necessarily result in lower prices.
Meanwhile, David Kreling, a professor of pharmacy marketing and economics at the University of Wisconsin-Madison, said Families USA's comparison of Medicare drug card program and the VA's drug purchasing strategy might not be "appropriate." He said, "The VA gets some very, very special pricing because they're a special class of customers. They are very much below market rates. If such prices were extended to a large group of patients, that's not a sustainable proposition" (Krasner, Boston Globe, 9/28).
Additional information on the Medicare drug benefit is available online.