Friday, April 13, 2007

Capitol Hill Watch

Senate Committee Approves Legislation That Would Allow Federal Government To Negotiate Medicare Prescription Drug Prices

      The Senate Finance Committee on Thursday voted 13-8 to approve legislation sponsored by committee Chair Max Baucus (D-Mont.) that would allow the government to negotiate prices with pharmaceutical companies under the Medicare prescription drug benefit, AP/Long Island Newsday reports (Freking, AP/Long Island Newsday, 4/12). The House in January passed a bill (HR 4) that would require the HHS secretary to negotiate prices directly with pharmaceutical companies under the drug benefit and report to Congress in six months. The Senate legislation would lift the ban barring the HHS secretary from negotiating drug prices. Under the Senate bill, congressional agencies such as the Congressional Budget Office would be given access to information about rebates and discounts that drug plans are negotiating with drug manufacturers. The agencies would use the data to inform Congress on how the drug plans are performing with regard to decreasing costs. The bill also includes a provision that would require the HHS secretary to compile a list of research and studies that compare the effectiveness of drugs and medical devices, which could be used by insurers to decide which drugs to cover (Kaiser Daily Health Policy Report, 4/12). Two Republican committee members -- Sens. Olympia Snowe (Maine) and Gordon Smith (Ore.) -- joined the committee's 11 Democrats in approving the legislation (AP/Long Island Newsday, 4/12). The full Senate is expected to consider the bill during the second half of next week, and Democratic leaders are making an effort to secure enough votes to overcome an expected filibuster attempt (Kivlan, CongressDaily, 4/12). According to the Wall Street Journal, some Democratic senators are hoping that Sens. Norm Coleman (R-Minn.) and Ben Nelson (D-Neb.) can be persuaded to support the bill. However, Nelson said, "It may be too early to make that type of adjustment" to Medicare (Wall Street Journal, 4/13).

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Sen. Kent Conrad (D-N.D.) said that the bill would give the federal government the power to achieve lower prescription drug prices. "When you're negotiating on behalf of 43 million people, that's leverage," Conrad said. However, committee ranking member Chuck Grassley (R-Iowa) said that the Medicare drug benefit already is lowering drug prices. "This bill does nothing more than keep alive a political pandering approach Democratic leaders have committed against Medicare beneficiaries and the public on the issue," Grassley said (AP/Long Island Newsday, 4/12). Earlier in the day, HHS Secretary Mike Leavitt said, "There's no evidence if government interferes with the market it would lower costs," adding, "The system is working" (Carey, CQ HealthBeat, 4/12).

American Public Media's "Marketplace Morning Report" on Friday reported on the committee vote. The segment includes comments from Richard Frank, a professor of health economics at Harvard University (Loeb, " Marketplace Morning Report," American Public Media, 4/13). Audio and a transcript of the segment are available online.