WASHINGTON – A group of Democrats and other supporters are calling for a law that would allow government officials to negotiate for lower Medicare drug prices.
According to Sen. Debbie Stabenow (D-Mich.) at a press conference on April 4, the bill could save the government as much as $30 billion if prices for Medicare prescription drugs were negotiated at the same rate given the Veterans Administration and if the program were managed by the government rather than private companies.
The Campaign for America’s Future, the Center for Economic and Policy Research and the American Association of Retired Persons are part of a grassroots campaign sponsored by the Change America Now coalition to get the bill passed.
The coalition has released a report detailing a method for possible savings.
Toby Chaudhuri, communications director for Campaign for America’s Future, said, “Drug companies currently have a monopoly on the market, but Medicare’s collective bargaining power can help level the playing field.”
The Senate Republican Policy Committee, in a paper issued Jan. 19, said private competition and competitive private drug price negotiation have fueled the success of Medicare Part D. “But Democrats’ proposals are threatening to remove the linchpin of the program by forcing the federal government to interfere in the private negotiation process,” the committee said.
According to a Republican Congressional staffer, Republicans see price negotiation as best accomplished through private sector experts, such as the health plans that are now negotiating for Part D drugs.
Medicare Part D has been successful in its first year, and it is too early to make any changes, the staffer said.
Dean Baker, co-director of the Center for Economic and Policy Research, argued that the Medicare Prescription Drug program has saved money not because it is efficient, but because FDA is approving drugs at a slower rate, fewer seniors have enrolled in Medicare Part D than expected, and incorrect calculations were used to anticipate the rate of spending.
“Lower costs in Medicare Part D doesn’t mean the reasons are good,” he said.
The House passed its version of the bill in January and the Senate Finance Committee plans to consider it after spring recess.
Stabenow and supporters are counting on several Republican votes to ease the tight margin expected to pass a bill in the Senate. These include Senators Norm Coleman (R-Minn.), Gordon Smith (R-Ore.), John Sununu (R-N.H.), George Voinovich (R-Ohio), Olympia Snowe (R-Maine), Susan Collins (R-Maine) and Arlen Specter (R-Pa.).
President Bush plans to veto the bill if it passes, but Stabenow said she is determined to move a bill through.
“This president will have to decide whose side he stands on: That of seniors or the drug companies,” she said.