President Bush is likely to veto the Democrat-led Medicare reform bill to negotiate lower drug prices if it is passed in the House today. Since the Democrats gained control of Congress last year they have been pushing forward on a number of priorities. The Medicare reform is the fifth of a seven-point plan that House Speaker and California Democrat Nancy Polosi wants to get through the House by the end of next week.

The Medicare legislation, known as the “HR4 Bi-partisan Bill to Negotiate Lower Drug Prices”, if passed, would require the federal government, as represented by Health and Human Services Secretary Michael Leavitt, to intervene in negotiations between insurers and drug companies. The current law does not allow this. Democrats say that doing this would result in better deals, using the bulk purchasing power of Medicare which subsizes the private insurance on prescription drugs to seniors and disabled people.

Supporters of the measure say it will save the tax payer 96 million dollars over 10 years. Michigan Democrat and House Energy and Commerce Committee Chairman John Dingell said that Medicare can do better and this is a way of making sure it does. He gives examples of prices under Medicare that are nearly 80 per cent higher than those paid by other federal programs that negotiate bulk deals.

Those against it say it sounds good but will have little impact as supposedly demonstrated by government studies. Paul Ryan, a Republican Representative of Wisconsin called it a “bumper sticker” measure.

The White House Office of Management and Budget (OMB) released a statement yesterday saying that they strongly opposed the legislation and that President Bush will veto the bill if it is passed in Congress.

The Congressional Budget Office has said the legislaton would not result in savings because they do not see the government being able to apply any pressure that would reduce prices across a broad range of drugs. At a Senate Finance Committee hearing this week Senator Charles Grassley of Iowa said that prices are already competitive, as a result of plans competing with each other in any case.

Senator Pat Roberts, a Republican from Kansas was also at the hearing. He said he didn’t know how the government was supposed to negotiate other than “smothering people with the milk of human kindness” alluding to the fact that it would have insufficient leverage to be effective above the competition pressure that already exists.

Democrats point to other programs such as the Veterans Administration where large savings have been made through bulk deals. However, opposers say they can’t use that example because the range of drugs is much narrower than Medicare’s and does not include some of the more expensive treatments.

Within the Senate itself Democrats are not sure how far the legislation should go. There appears to be a rift between those Democrats who think the federal government should be forced to negotiate and those who think only that the current ban should be lifted, leaving the federal government free to choose. The former might be the party ideal but the latter may be the compromise they will be forced into because the Senate Democrat majority is much smaller than in the House.

The Medicare Drug law, that today’s bill proposes to amend, was passed in 2003 (when Congress was Republican dominated). It explicitly prohibits the federal government from negotiating with drug companies on price or to set a list of preferred drugs.

House Committee on ways and Means communication on the bill: “House Members Introduce H.R. 4, a Bi-partisan Bill to Negotiate Lower Drug Prices”.

Written by: Catharine Paddock
Writer: Medical News Today