House Passes Medicare
Drug Bill
Measure Would Require Government to Seek Lower
Prices
By Christopher Lee
Washington Post Staff Writer
Saturday,
January 13, 2007; A02
The House voted yesterday to require the government to negotiate lower
prescription drug prices for Medicare beneficiaries. But the measure faces an
uncertain future in the Senate, a veto threat from President Bush, and
considerable doubts from experts about whether it would save elderly and
disabled Americans much money.
The vote was 255 to 170, with 24 Republicans joining 231 Democrats in
approving the legislation.
The bill overturns a provision of the 2003 law pushed through by a
Republican-controlled Congress that left drug-price negotiations under the new
Medicare drug benefit to the private insurers that offer government-subsidized
drug plans for seniors in each state.
Backers of the current system, mainly Republicans, say it pits insurers
against one another in a healthy competition to negotiate the lowest prices from
drugmakers and offer seniors the most attractive monthly premiums, choice of
drugs and access to pharmacies.
But critics, mainly Democrats, say the system is a boon to drug companies
because it prohibits the government -- perhaps the one force powerful enough to
take on the pharmaceutical industry -- from using its bargaining muscle on
behalf of seniors.
"This legislation is a common-sense effort to do right by the 43 million
Americans enrolled in Medicare," said House Majority Leader Steny H. Hoyer (D-Md.). "This bill is a very important first step
in making prescription drugs more affordable."
The bill would require Health and Human Services Secretary Mike Leavitt to
pursue negotiations with drug companies and report to Congress in six
months.
Medicare "pays more than the VA pays for the same prescription
pharmaceuticals," said House Energy and Commerce Committee Chairman John D. Dingell (D-Mich.), the lead sponsor of the bill, referring
to the Department of Veterans Affairs.
"The reason is no one is able to negotiate on behalf of the citizens," he
added. "You've got a bunch of coldhearted prescription pharmaceutical people . .
. who are fixing the prices that are paid by seniors citizens. . . . It's time
that we correct this."
Leavitt and other Republicans countered that the year-old program is working,
with the Centers for Medicare and Medicaid Services (CMS) reporting overall
costs coming in billions of dollars lower than expected and average plan
premiums being lower this year than in 2006. Moreover, polls conducted last fall
by the Henry J. Kaiser Family Foundation and other nonpartisan groups found that
the overwhelming majority of seniors were satisfied with their drug plans.
"Many of us believe that competition and using free-market principles in the
long run produce better results, lower costs, higher quality and more
satisfaction among seniors. And that's exactly what we've seen with this plan,"
said House Minority Leader John A. Boehner (R-Ohio).
Republicans also pointed to separate analyses this week from the CMS and the
Congressional Budget Office that concluded that the House bill would have little
or no effect on spending.
"It's flat wrong to think the government is going to negotiate a lower price
than the competitive marketplace," said Rep. Joe L. Barton (Tex.), ranking Republican on the Energy and
Commerce Committee.
W.J. "Billy" Tauzin, president of the Pharmaceutical Research and
Manufacturers of America, said the House bill may lead to the government
limiting which medicines will be covered. "That should not be acceptable to
anyone," the former GOP congressman said.
The White House issued a statement this week saying that Bush would veto the
bill if it reached his desk. "Government interference impedes competition,
limits access to life-saving drugs, reduces convenience for beneficiaries, and
ultimately increases costs to taxpayers, beneficiaries and all American citizens
alike," the statement said.
Medicare provides health-care coverage to most elderly Americans, as well as
to about 7 million younger people with disabilities.
Although the measure moved quickly through the House, its prospects are
murkier in the Senate, where no companion bill has been introduced. Sens. Ron
Wyden (D-Ore.) and Olympia J. Snowe (R-Maine) introduced legislation this week that
calls for government price negotiations in certain instances, such as for drugs
with no competing substitutes or when the research behind a drug was funded
mostly by taxpayers.
"We do think that there is an opportunity to get some additional value for
seniors and additional value for taxpayers," Wyden said.
There is considerable pressure on lawmakers to do something. A poll last
month by Kaiser and the Harvard School of Public Health found that 85 percent of
adults surveyed -- including majorities of Republicans, Democrats and
independents -- favor allowing the government to negotiate prescription drug
prices for the Medicare program.
Senate Finance Committee Chairman Max Baucus (D-Mont.), whose committee would vet any Medicare drug
bill, said in a statement this week that he favors eliminating the ban on
government price negotiations -- a stance that increases the chances that some
kind of legislation will pass.
But he added that he opposes "heavy-handed" intervention such as price
controls. He said that wants to explore options such as expanding government
studies on drug effectiveness and increasing the scrutiny on whether insurers
are passing on the discounts they get from drug companies to consumers.
"The HHS secretary has a gold mine of data, the ability to get more data,
dozens of agencies and tens of thousands of public servants at his disposal," he
said. "That is quite a tool box with which to seek fair drug prices for seniors.
It is time to open that tool box for Medicare."
? 2007 The
Washington Post Company