Democrats Reintroduce Medicare Drug Price Negotiation Legislation

Main Category: Medicare / Medicaid / SCHIP
Article Date: 25 Oct 2007 - 9:00 PDT

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Senate Majority Whip Richard Durbin (D-Ill.), along with Reps. Marion Berry (D-Ark.) and Jan Schakowsky (D-Ill.), on Tuesday reintroduced legislation that would require the federal government to negotiate prices directly with pharmaceutical companies for medications under the Medicare prescription drug benefit, CongressDaily reports. The bill would allow Medicare to establish a formulary that would give HHS leverage in negotiations. Durbin said, "Under current law, Medicare beneficiaries are stuck with confusing, costly plans designed by insurance and drug companies. What seniors deserve is an affordable, straightforward drug benefit."

According to a report released Tuesday by Consumers Union and the Medicare Rights Center, private insurers do not negotiate significant savings for Medicare beneficiaries. The report found that Medicaid saves 26% on drug spending, while the Medicare drug benefit will save 8.1% this year. Berry estimated that about $40 billion could be saved through a government-led drug negotiation program. He said that the bill would be reintroduced until it is approved.

Mohit Ghose, a spokesperson for America's Health Insurance Plans, said Medicare drug benefit costs have been below estimates the last two years and noted that private insurance plans are offering Medicare drug plans at lower-than-expected premiums. "Negotiation that is occurring is obviously producing results," Ghose said (Edney, CongressDaily, 10/24).

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